The Founding Economists: Alexander Hamilton and Albert Gallatin

Table of Contents

The Secretaries and their Critics
Hamilton as Secretary of the Treasury
The Whiskey Rebellion
Gallatin in Congress
Gallatin as Secretary of the Treasury
Differences and Similarities
National Development
Taxes and Debt
The Bank of the United States
Renewal of the Bank of the United States
Manufacturing, Tariff and Trade
The Embargo
Military Expenditures
Democracy

The Secretaries and their Critics

Alexander Hamilton’s image has long appeared on the $10 bill. Albert Gallatin’s image appeared on briefly on the $500 bill during the Civil War before quickly disappearing from America’s currency. Although his 13-year stint as secretary of the Treasury was the longest in the nation’s history, Gallatin generally has disappeared from public view as well. Gallatin doesn’t generate much historical notice – even from biographers of his rival Hamilton. In recounting Gallatin’s role in the Whiskey Rebellion of 1794, distinguished historian Ron Chernow dismissed Gallatin: “A tall, skinny man with a narrow face and hooked nose, Gallatin was a notoriously slovenly character.”¹

Gallatin was worse abused by Abigail Adams who described him as “that specious, subtle, spare Cassius, that imported foreigner.”² If the second First Lady had her way, Gallatin would have been deported under the Alien and Sedition Acts – which some thought had been designed specially to get rid of the troublesome Swiss-American. As for Hamilton, Abigail complained “that man would become a second Bonaparty if he was possessed of equal power!"³ She wrote her husband in late 1796: “I have often said to you, H. is a man ambitious as Julius Caesar. A subtle intriguer, his abilities would make him dangerous if he was to espouse a wrong side. His thirst for fame is insatiable. I have ever kept my Eye upon him.”⁴ After news of Hamilton’s affair with Maria Reynolds became public in 1797, Abigail wrote her husband: “Oh, I have read his heart in his wicked eyes. The very devil is in them. They are lasciviousness itself.”⁵

Alexander Hamilton was indeed ambitious. Albert Gallatin professed not to be. “Ambition, love of power, I never felt it,” Gallatin wrote to his wife. Hamilton was born to military command. Gallatin shied from it. Gallatin said of the brief experience he had leading some militia in the American Revolution: “As I never met the enemy, I have not the slightest claim to military service.”⁶ In 1781, Hamilton personally led the charge on British defenses at Yorktown that effectively ended the Revolutionary War. Hamilton’s experience in the Revolution with militia was more extensive and less favorable; he developed a lifelong prejudice in favor of a standing army.

John Adams, never a Hamilton fan, called him the “bastard brat of a Scots peddler.” On another occasion, President Adams said: “I remember the young bastard when he entered the army.”⁷ Even after Hamilton’s death, Adams wrote: “Although I read with tranquility and suffered to pass without animadversion in silent contempt the base insinuations of vanity and a hundred lies besides published in a pamphlet against me by an insolent coxcomb who rarely dined in good company, where there was good wine, without getting silly and vaporing about his administration like a young girl about her brilliants and trinkets, yet I lose all patience when I think of a bastard brat of a Scottish pedlar daring to threaten to undeceive the world in their judgment of Washington by writing an history of his battles and campaigns. This creature was in a delirium of ambition; he had been blown up with vanity by the tories, had fixed his eyes on the highest station in American, and he hated every man, young or old, who stood in his way or could in any manner eclipse his laurels or rival his pretensions.”⁸

Indeed, one thing that Gallatin and Hamilton had in common was that they were both despised by President Adams and his wife. They were despised for very different reasons. In the wake of the 1797 XYZ affair in which American diplomats had be rebuffed by the French, Gallatin led the Republican demand that the XYZ dispatches be shared with Congress. Historian David McCullough wrote of the XYZ Affair: “In the House, Gallatin had urged that the dispatches not be published, certain that they would dash any surviving hope of a settlement with France – which it appears, was exactly the fear that troubled the President.” When they were, even Republicans were shocked by their contents. When they were leaked to the newspapers, Americans were shocked as well. Hamilton, though he urged relative moderation, argued that America must prepare for war with France and positioned himself to be the effective leader of the nation’s military buildup. In the fall of 1799, Hamilton emotionally confronted President Adams and unsuccessfully tried to block the dispatch of peace envoys to Paris. The meeting was a disaster and effectively ended any civil relationship between the two Federalists. McCullough wrote: “Led by Gallatin, the Republicans mounted vigorous resistance and nothing passed by large majorities. The ‘Executive Party,’ Gallatin argued, was creating the crisis [with France] only to ‘increase their power and to bind us by the treble chain of fiscal, legal and military despotism.’”⁹ In June 1800, Secretary of State Timothy Pickering wrote after a meeting with Adams that the President had declared “he would sooner serve as Vice-President under [Jefferson], or even as Minister resident at the Hague, than be indebted for his election to such a being as Hamilton;’ whom in the same sentence he called a bastard and as much an alien as Gallatin.”¹⁰

Nevertheless, Adams’ son and future president, John Quincy Adams, admitted that Hamilton “had within him to a great degree that which subdues the minds of other men, perhaps the first of all qualities for the commander of an army.”¹¹ On another occasion, John Quincy Adams said of Gallatin that “in his character one of the most extraordinary combinations of stubbornness and flexibility that I ever met.”¹²

John Adams and Thomas Jefferson disagreed on many things during the 1790s, but they agreed on their disdain for Hamilton. Like Adams’ wife, Jefferson referred to Hamilton as “our Buonaparte.” Jefferson generally mobilized others to attack Hamilton in public but his animosity was such that he privately doubted even Hamilton’s courage and dedication in the face of the yellow fever epidemic that ravaged Philadelphia in the summer of 1793. Safely at his Monticello home, Jefferson unfairly wrote: “Hamilton is ill of the fever as is said, he had two physicians out at his house the night before last. [H]is family think him in danger, & he puts himself so by his excessive alarm. He had been miserable several days before from a firm persuasion he should catch it, a man as timid as he is on the water, as timid on horseback, as timid in sickness, would be a phenomenon if courage of which he has the reputation in military occasions were genuine. His friends, who have not seen him, suspect it is only an autumnal fever he has.”¹³ Hamilton was indeed deathly ill.

Hamilton’s extraordinary talents encouraged animosity. Historian Richard Brookhiser wrote: “Hamilton was a know-it-all who (even worse) often did know it all. Madison, beneath a layer of intense shyness, was equally headstrong, while Jefferson had the deep deviousness that is given only to the pure of heart. Hamilton abused his new enemies in anonymous essays in the papers; Jefferson, who was too cagey to write anything for publication himself, kept a journalistic hatchetman on the State Department payroll.”¹⁴ Hamilton, Jefferson and Adams were all part of the first Washington administration. Secretary of State Jefferson was more vitriolic than Vice President Adams in his condemnation of Treasury Secretary Hamilton. Only long after Hamilton’s death in 1804 was Jefferson capable of a more dispassionate analysis: “Hamilton was, indeed, of a singular character. Of acute understanding, disinterested, honest, and honorable in all private transactions, amiable in society, and duly valuing virtue in private life, yet so bewitched and perverted by the British example as to be under thorough conviction that corruption was essential to the government of a nation.”¹⁵ Hamilton biographer Ron Chernow observed that by the time that Hamilton left the Treasury post, “he was so controversial, so divisive, that the mere mention of his name could trigger debates. Adored by his followers, he was seen as cocky, conceited and swaggering by his enemies.”¹⁶ Hamilton biographer John C. Miller wrote: “For sheer unpopularity, no other member of the administration could compete with the Secretary of the Treasury; his political theories, his financial policies and his objectives all made him anathema to those who did not share his vision of the American future. ‘Seldom,’ said John Marshall, ‘has any minister excited in a higher or more extensive degree than colonel Hamilton, the opposite passions of love and hate,’ and of the two, hate sometimes seemed to be the stronger. Even those who made a merit of Hamilton’s ability to make enemies sometimes lamented that he did not have more friends, particularly in the South.”¹⁷ Jefferson and Hamilton seemed to revel in accusing each other of the basest of motives. Hamilton wrote President Washington that he was aware “that I have been the object of uniform opposition from Mr. Jefferson....I have long seen a party formed in the legislature under his auspices bent on my subversion...which, in its consequences would subvert the government.”¹⁸

Congressman Gallatin took a different position on foreign policy and was attacked for different reasons. “During the spring and summer of 1798, Gallatin led the Republican fight for peace. The defense buildup was unnecessary, he charged, except for the economic well-being of a few Eastern seaboard centers. The burden of paying for bringing this prosperity to the Federalist cities, he added, would fall upon the nation’s farmers, a practice his foes had pursued since the whiskey tax days of the Washington-Hamilton administration. Consequently, he had fought both the augmentation of the navy and the creation of the provincial army,” noted historian John Ferling. Gallatin did so both as a congressman and later as secretary of the Treasury. President Adams’ party wanted war; Adams himself wanted peace. But Adams disliked both men and when he wanted to diminish Hamilton’s claims to military leadership, he suggested that immigrant Hamilton had not been in America much longer than immigrant Gallatin.¹⁹ However, noted biographer Raymond Walters, Jr., as the War of 1812 approached, Gallatin, who “opposed war preparations and expenses; now that they were inevitable, he argued that they must be provided for. He reminded his fellow Democratic-Republicans from the West that it behooved them to provide for war preparations because, if hostilities broke out with France, their access to the Mississippi and New Orleans would undoubtedly be cut off.”²⁰ Like Hamilton, Gallatin was fundamentally a realist.

As immigrants to the colonies, Gallatin and Hamilton shared a common handicap – neither had the connections that helped other Founders. Madison biographer William Lee Miller observed that Hamilton “had no family connections to give him his start, and no family plantation to provide his support. He had no Montpelier, Monticello, or Mount Vernon. He was not related to the Boylstons (John Adams’s mother) or the Quincys or the Randolphs (Thomas Jefferson’s mother).”²¹ Even the foreign-born Hamilton denounced Gallatin’s birth in 1801, writing: “Who rules the councils of our own ill-fated, unhappy country? A foreigner!”²² Although Gallatin had been born to wealth in Geneva, it was he who was more socially awkward than Hamilton, born into poverty. Gallatin told his wife that he experiences “awkwardness in mixed companies which will forever prevent a man from becoming a party in the society where he mixes.”²³ Historian John Steele Gordon wrote of Hamilton’s entry into New York aristocracy: “Although Hamilton married the daughter of Philip Schuyler, one of the richest members of New York’s ‘Knickerbocker Aristocracy,’ he never fully belonged to it himself. While he could be charming, especially with women, he was too driven, too ambitious for fame and glory, too unable to suffer fools gladly, to be completed accepted by the men. They recognized his brilliance, utilized his intellectual and financial skills, but they never forgot where Hamilton came from or the conditions of his birth.”²⁴ Despite the handicap of their births, Hamilton was named the nation’s first Treasury secretary at 34 in 1789 and Gallatin became the nation’s fourth Treasury at 40 in 1801.

There was a persistent strain of disdain that cropped in the criticism of Gallatin and Hamilton – despite the fact that their understanding of economics and administration far surpassed their contemporaries. In the late 1790s, President John Adams saw little difference in the foreign birth of the two men. When in 1798 Hamilton was under consideration as the number two general in a reconstituted American army, Adams strongly resisted George Washington’s pressure to make the appointment: Adams wrote: “He is not a native of the United States, but a foreigner and, I believe, has not resided longer, at least not much longer, in North America than Albert Gallatin.”²⁵ Adams later described Hamilton as “the most restless, impatient, artful, indefatigable, and unprincipled intriguer in the United States, if not the world.”²⁶ Like Hamilton, Gallatin was abused by those who should have been their allies. The criticism was unfair – especially when the two men were acting to implement the objectives of the popular presidents they served. In 1806, Secretary of the Treasury Gallatin wrote his sister-in-law: “To be abused and misunderstood by political friends of wroth is not pleasant, but the great question in all those things is: Did you perform your duty, and did you, as far as you were able, promote the public good? For, worldly as you think me, rest assured that, however I may prize public opinion, it is not there that I see for a reward.”²⁷

Both Hamilton and Gallatin attracted more than their share of critics from within their own parties. Hamilton biographer Louis M. Hacker wrote: “The charges against Hamilton ran the whole gamut from truth to falsity. His hand was too obviously revealed in all the departments of government; and this was so. He was not respectful enough of Congress’ prerogatives; and this was equally the case. He sought to subordinate the legislative function and the authority of the states before the leadership of the Executive; again, his opponents were right.” Hacker added: “But, it was also being said, he was consistently the friend of a speculative interest, he unduly favored commerce and finance at the expense of agriculture, he himself was personally involved in questionable practices. He was subverting democracy; he was preparing the way for a monarchy. These charges were both unkind and untrue.”²⁸

Gallatin lacked Hamilton’s ego but not his determination. Gallatin the aristocrat was a committed democrat, but he was also a principled partisan. Historian Gordon S. Wood noted: “Although not native to America, Gallatin had absorbed the eighteenth-century enlightened fear of high taxes, standing armies, and bloated executive authority as thoroughly as Jefferson or any other radical Whig.”²⁹ Gallatin’s first critics were Federalists like Hamilton, but he progressively attracted a range of opponents in the Republican Party as well. “Few persons served the United States as well as Gallatin, but his French accent and Continental ways inspired distrust in many Americans,” wrote Jefferson biographer Alf J. Mapp, Jr.. The situation worsened during the Jefferson administration from 1801 to 1809, but hit its peak after James Madison took over the White House, “Gallatin, had never been very popular with the party’s rank and file, or even some of its leaders for that matter. Jefferson had always strongly defended him in his administration. Now Madison defended him too, but the new President was not the popular hero that his predecessor was.”³⁰

Both Hamilton’s and Gallatin’s birth origin continued the subject of criticism after they joined the Cabinet. “Some went so far as to call him a ‘venal Swiss,’ but the most common taunt against this native of Geneva was that he could not speak the English language intelligibly, and that he was French in spirit as well as accent,” wrote Jefferson biographer Dumas Malone. “Judging from the portrait of him by Gilbert Stuart, made in this period, he had a distinct French look, with his prominent nose and the black hair on each of side of his conspicuous bald spot. This look was not now as great a disadvantage as it had been while he was marshaling the harassed Republicans in House of Representatives during the half-war with France, but his features lent themselves to caricature. The assertion by the friendly National Intelligencer that he was no more a foreigner than Hamilton was met with disdain by the Federalist press.”³¹ It was to Hamilton’s advantage – although fluent in French – that he had been born in the English-speaking West Indies.

Despite their accomplishments, both men struggled. Historian James D. Grant noted: “Gallatin’s was an eminent, honorable and productive life, though not always a happy one. The death of his first wife cut short a ‘deliriously happy one. The death of his first wife cut short a ‘deliriously happy’ marriage after just five months. He married again, but three of the Gallatin daughters died in infancy. Public life, too, brought its share of disappointment. For all his years in America, Gallatin never lost his heavy French accent, nor, his political enemies charged, his fancy, Frenchified ways of thinking.”³² Criticism of Gallatin was relatively restrained – compared to that of Hamilton. John Quincy Adams, who was secretary of state when Gallatin was U.S. Minister to France, wrote that “Gallatin is a man of first-rate talents, conscious and vain of them...tortuous in his paths, born in Europe, disguising and yet betraying a supercilious prejudice of Europeans superiority of intellect, and holding principles pliable to circumstances, occasionally mistaking the left- for the right-handed wisdom.”³³ The younger Adams and Gallatin were both strong-willed men who had clashed as U.S. representatives negotiating an end to the War of 1812. Gallatin himself observed of Adams that “he wants to a deplorable degree that most essential quality, a sound and correct judgment...although he may be useful when controuled and checked by others, he ought never to be trusted with a place where unrestrained his errors might be fatal to the country.”³⁴

Both Hamilton and Gallatin were strong men – intellectually, morally, politically. But they could be rigid. Historian Thomas Fleming noted of Alexander Hamilton: “The treasury secretary was portrayed as a would-be despot, ready to assert his power in every imaginable way – in Congress, the courts, the voting booth and the bedroom.”³⁵ Hamilton biographer John C. Miller wrote: “Some of Hamilton’s friends found him too inflexible in his ideas: Gouverneur Morris, for example, traced most of Hamilton’s difficulties to ‘the pertinacious adherence to opinions he had once formed.’ It is true that Hamilton’s convictions were strongly held and that he seldom changed his mind; but, at the same time, he was capable of moving slowly and patiently toward his objective, and he possessed a sense of timing that, at least in the early and most constructive period of his career, did not play him false. And yet it remained true that while Hamilton was capable of compromise, he could not conciliate: it was not for him to hold a party together by bridging differences between divergent groups or sections. By temperament as well as by the intensity with which he sought to realize his objectives, Hamilton was best fitted to be the leader of a small group of devoted followers.” Miller wrote: “As a political leader, Hamilton conducted himself like a general of an army: instead of dealing directly with the rank and file, he operated through hand-picked subordinates; he was primarily a policy maker and a leader of leaders.”³⁶ Historian Jay Winik wrote of Hamilton:“Though fascinated by power, the use of power, or the misuse of power, he nonetheless was never one for the give-and-take of politics or compromise – he sought to remake the government in overarching sweeps or by sheer force of his ideas.”³⁷

Nothing reflected the difference between Hamilton and Gallatin more than their relationships with Virginia’s Thomas Jefferson and New York’s Aaron Burr. Hamilton detested both but after the presidential election of 1800 resulted in an electoral tie between the two Republicans, Hamilton backed Jefferson in the House of Representatives as the more principled of the two. Gallatin was torn and maintained his friendship with Burr. Historian Roger G. Kennedy wrote: “Gallatin was surely admirable, a loving and lovable man. He shared a rare affection for Jefferson with James Madison. (It is one thing to esteem such a man, quite another to be fond of him.) And so long as they lived, both Burr and Jefferson retained a genuine affection for Gallatin. When Jefferson was eighty, he wrote Gallatin,’I shall love you forever, and rejoice in your rejoicing, and sympathize with your evils. God bless you and have you ever in his holy keeping!’”³⁸

Hamilton and Gallatin were also defined by their very different relationships with George Washington. Historian Ron Chernow wrote: “As a member of Washington’s family, Hamilton had stumbled upon the crowning enterprise of his life: the creation of a powerful new country. By dint of his youth, foreign birth, and cosmopolitan outlook, he was spared prewar entanglements in provincial state politics, making him a natural spokesman for a new American nationalism.”³⁹ Chernow wrote: “By dint of the superlative letters he had drafted and his military acumen, Alexander Hamilton had risen to become Washington’s de facto chief of staff.”⁴⁰ Although they clashed and Hamilton resigned his post in early 1781, Washington maintained his affection for his young aide. Both Alexander Hamilton and his mentor, George Washington, were strong-willed and hot-tempered. “Both men had a passion for order,” according to Richard Brookhiser, who has written books about both men. “Hamilton could bring order out of masses of information; Washington appreciated it. Both men also had practical temperaments. Washington wanted things done right; Hamilton was confident that he could do them right. His entry into Washington’s ‘family’ was the beginning of a twenty-two-year- relationship, the most important of his career.”⁴¹

Gallatin was not liked by George Washington, nor was he in awe of America’s first president. Young Gallatin met Washington when the general visited his western Pennsylvania properties in the autumn of 1784. The General travelled near Gallatin’s home in Georges Creek, Pennsylvania to survey a new road across the Appalachian mountains and sought the ideas of local residents “Gallatin attended, as he had been surveying lands in the region. They gathered in a one-room log cabin which served as the office and dwelling of the local land agent. Washington sat down at a pine table, and all the others stood around him, except for those who sat on the sole bed in the room. Washington questioned all the men, and as Gallatin listened to their explanations he quickly identified the appropriate location for the road. He interrupted Washington’s inquiries to say that it was obvious enough that this was the right route for the road that Washington wanted to build. Washington gave him a cold, hard stare in remonstrance for this breach of decorum,” wrote Gallatin biographer Nicholas Dungan.⁴²

“Gallatin’s political career began in 1784, when he gave up the only bed in his log cabin in the Appalachian Mountains to George Washington, who was seeking routes across the Alleghenies,” noted historian Roger G. Kennedy. “Gallatin, though willing to relinquish his cot to an older man – and a general – erred in telling the great man how simple it was to find portages.”⁴³ Washington biographer Douglas Southall Freeman noted: “Gallatin himself left no written account of the incident, though he often was quoted as saying Washington always seemed to him the most ‘inaccessible’ man he ever had known.”⁴⁴

Over a dozen years later in 1797, Gallatin wrote his wife about a Philadelphia dinner a few weeks before President Washington left office: “He looked, I thought, more than usually grave, cool, and reserved. Mrs. W. inquired about you, so that you may suppose yourself still in the good graces of our most gracious queen, who, by the by, continues to be a very good-natured and amiable woman. Not so her husband, in your husband’s humble opinion; but that between you and me, for I hate treason, and you know that it would be less sacrilegious to carry arms against our country than to refuse singing to the tune of the best and greatest of men....”⁴⁵

Both Gallatin and Hamilton had large visions for America. Historian John Ferling wrote: “A continentalist, as he had styled himself, Hamilton dreamed of an expansive United States that someday would grow to be rich, powerful, and secure, and he yearned for a substantive role in bringing his dream to fruition. In this vision his grandiose ambition and Nationalist passion meshed.”⁴⁶ Historian Leonard D. White wrote: “ Both men had a national point of view and could work without the limitations of state loyalties that influenced most of their contemporaries. Both men had a taste capacity for planning and skill in administrative invention.”⁴⁷ Historian Forrest McDonald wrote: “Hamilton’s views about how the United States could be made great have been as misunderstood as his views of man and society. He was and has been regarded as the patron saint in America of nationalism, capitalism, and conservatism. The first two descriptions, if properly defined are reasonably accurate characterizations of what he was about, the third considerably less so.” McDonald wrote that “Hamilton distrusted authority that was exclusively lodged anywhere in particular: ‘Give all power to the many,’ said he, and ‘they will oppress the few. Give all power to the few, they will oppress the many.’”⁴⁸

Both men made themselves indispensable as governmental administrators in a country that lacked such a class of leaders. Hamilton biographer Ron Chernow noted: “Whether through luck, premeditation, or a knack for making things happen, Hamilton continued to demonstrate his unique flair for materializing at every major turning point in the early history of the republic.”⁴⁹ Biographer Forrest McDonald wrote that Hamilton’s “true genius...was for running things, for organizing and regularizing human activity and establishing procedures whereby work could most effectively be done.”⁵⁰

During the Revolutionary War, Hamilton convinced a key supporter of his worth. Hamilton’s future father-in-law wrote his daughter: “Participate afresh in the satisfaction I experience from the connection you have made with my beloved Hamilton. He affords me happiness too exquisite for expression. I daily experience the pleasure of hearing encomiums on his virtue and abilities from those who are capable of distinguishing between real and pretended merit. He is considered, as he certainly is, the ornament of his country.”⁵¹ Hamilton biographer John C. Miller noted: “Instead of recommending that his child read Lord Chesterfield’s letters to his son, General Schuyler urged him to model himself upon Alexander Hamilton, ‘the ornament of his country.’”⁵² New York Governor George Clinton, no political ally, called Hamilton the “little Great Man.”⁵³ Massachusetts Senator Daniel Webster waxed mythological about Hamilton, writing that “the whole country perceived with delight, and the world saw with admiration. He smote the rock of the national resources, and abundant streams gushed forth. He touched the dead corpse of the public credit, and it sprung upon its feet. 'The fabled birth of Minerva from the brain of Jove was hardly more sudden or more perfect than the financial system of the United States as it burst forth from the conception of Alexander Hamilton."⁵⁴

Gallatin also attracted strong admirers. Jeffersonian William Duane wrote that Gallatin was "a man of most singular sagacity and penetration; he could read the very thoughts of men in their faces and develop their designs; a man of few words, made no promises but to real favorites [who] ever sought to enhance his own interest, power, and aggrandisement by the most insatiate avarice on the very vitals of the unsuspecting nation."⁵⁵ One obvious reason for contemporary antagonism to Gallatin and Hamilton was simple jealousy. They clearly possessed a grasp of economics that eluded even brilliant colleagues like Adams and Jefferson. William Lee Miller wrote that “Hamilton was one of those students – from the point of view of professors an awkward presence – who are smarter not only than their fellow students but also than their professors.”⁵⁶ He was the same kind of adult.

Hamilton’s early commercial career in the Caribbean prepared him to develop a commercial America. Historians Stanley Elkins & Eric McKitrick wrote: ‘The young Hamilton, despite his lack of fortune, was peculiarly situated to absorb the values, standards, habits of mind, and cosmopolitan outlook of the world of commerce under the most favorable possible circumstances.” They wrote: “Among the most striking traits of Hamilton’s personality was one that flashes forth in the earliest glimpses we have of him, fleeting through they are. This was an intense need to lay hold of whatever operation he had any connection with, either to run it himself or to instruct others how it ought to be done.”⁵⁷ Historian Claude G. Bowers wrote that Secretary of the Treasury Hamilton was “best qualified for that species of business, and on that account would be preferred by those who know him personally.”⁵⁸

Another reason for contemporary jealousy of the two men was their relationships with their primary mentors – Washington for Hamilton and Jefferson/Madison for Gallatin. Both Hamilton and Gallatin worked closely with James Madison during part of their political careers. Hamilton’s association began a decade earlier than Gallatin’s when Hamilton and Madison served in Congress. Madison had joined the Continental Congress in 1780 – two years before Hamilton. But they quickly became collaborators. Hamilton’s first ally in financial reform of the Articles of Confederation was later to become one of his most confirmed opponents during the Washington administration. In the Continental Congress in 1783, wrote Chernow, “Hamilton joined Madison in a campaign to introduce a federal impost – a 5 percent duty on all imports – that would finally grant Congress autonomy in money matters. For Hamilton, the overriding goal was to institute a federal power of taxation.”⁵⁹ Hamilton was deeply hurt by Madison’s opposition to his policies: “When I accepted the Office, I now hold, it was under a full persuasion, that from similarity of thinking, conspiring with personal goodwill, I should have the firm support of Mr. Madison, in the general course of my administration,” Hamilton wrote in 1792. “Aware of the intrinsic difficulties of the situation and of the powers of Mr. Madison, I do not believe I should have accepted [appointment as Treasury secretary] under a different supposition.”

I have mentioned the similarity of thinking between that Gentleman and myself. This was relative not merely to the general principles of National Policy and Government but to the leading points which were likely to constitute questions in the administration of the finances. I mean (1) the expedience of funding the debt (2) the inexpediency of discrimination between original and present holders (3) The expediency of assuming the state Debts.”⁶⁰

In the mid-1790s, Gallatin joined Madison as a partisan collaborator in Congress, eventually succeeding as the Republican leader when Madison retired and leading the fight against federal taxes. Eventually, as secretary of the Treasury, Gallatin would find his own reasons to be frustrated with Madison but he would never turn on the Virginian. Both Gallatin and Hamilton were more firmly rooted in the real world than Madison and Jefferson – who lived in a more theoretical existence, frequently sealed away in the libraries of their Virginia hilltop homes. Hamilton wrote: “The truth is, in human affairs there is no good, pure and unmixed, every advantage has two sides; and wisdom consists in availing themselves of the good, and guarding as much as possible against the bad.”⁶¹

Biographer Ron Chernow noted: “Hamilton always displayed an unusual capacity for impressing older, influential men.”⁶² Hamilton had a talent for friendship – especially with rich and influential people. Historian John Ferling wrote: “Throughout his life, Hamilton had a facility for enlisting the aid of older, powerful benefactors. Whereas [Nicholas] Cruger paid for his education, John Jay, who had learned of Hamilton through his essays, agreed to use his influence in 1776 to secure the young man’s appointment as captain of an artillery company. Recent research has demonstrated that Captain Hamilton saw no military action in the Battle of New York or subsequent engagements that autumn, but he was with the Continental army as it reeled in retreat across New Jersey, and in December and January he was part of the fighting at Trenton and Princeton. On March 1, 1777, he received the opportunity of a lifetime. He was appointed as an aide-de-camp to General Washington.”⁶³

Washington had a gift for developing useful collaborations – with Madison as well as Hamilton. “Hamilton had come to him at the age of about twenty as a military aide so brilliant that he rapidly became, in effect, chief of staff,” wrote Washington biographer James Thomas Flexner. “All the more defiantly proud because of his illegitimate birth, this immigrant from the West Indies had rebuffed Washington’s advances of friendship, preferring, as he wrote, ‘to stand rather on a footing of military confidence than of private attachment. After Washington had repeatedly demonstrated his unwillingness to lose his invaluable aide by giving him some more conspicuous assignment, Hamilton picked a quarrel and resigned his staff post in anger. Washington forgave, and belatedly rewarded the fiery youth with a glamorous opportunity at Yorktown. Yet the two men remained on no more than distantly friendly terms until brought again into close collaboration by the cabinet appointment.”⁶⁴ Historian John Ferling wrote that Washington admired Hamilton because he “had watched Hamilton bring to bear both his rich assortment of talents and his arsenal of malice. Some were aghast at what they glimpsed in Hamilton. Washington was drawn closer to Hamilton by what he saw, as if he were observing a mirror image of himself, or perhaps as if he were looking at the man he wished he could have been. Washington knew that Hamilton was a good bet to get his recommendations approved, even if he had to resort to Machiavellian schemes.”⁶⁵ Alexander Hamilton would have no warmer admirer than George Washington. When war threatened with France in 1798, Washington insisted that Hamilton be his top military aide in a reconstituted army. Washington wrote President John Adams in September regarding Hamilton: “By some he is considered an ambitious man, and therefore a dangerous one. That he is ambitious, I shall readily grant, but it is of that laudable kind which prompts a man to excell in whatever he takes in hand. He is enterprising, quick in his perceptions, and his judgment intuitively great, qualities essential to a military character.”⁶⁶ When Hamilton’s affair with Maria Reynolds became a public scandal in 1797, Washington never referred to it publicly. Instead he sent a letter to Hamilton: “Not for any intrinsic value the thing possesses, but as a token of my sincere regard and friendship for you and as a remembrance of me, I pray you to accept a wine cooler of four bottles....I pray you to present my best wishes, in which Mrs. Washington joins me, to Mrs. Hamilton and the family, and that you would be persuaded that with every sentiment of the highest regard, I remain your sincere friend and affectionate honorable servant.”⁶⁷ Hamilton biographer Ron Chernow noted: “The letter was eloquent for what it did not say. It confirmed that Washington thought Hamilton was being persecuted and that he wanted to express solidarity with him. The wine cooler would always be treasured by Eliza Hamilton. That she cherished this gift so much tells us something about her view of the Maria Reynolds scandal.”⁶⁸

Hamilton had a weakness for male grace under fire and female weakness in distress. He had an exaggerated sense of gallantry. He begged Washington to spare the life of British spy John Andre in 1780. Hamilton developed a strong relationship with a fellow young military officer, South Carolinian John Laurens, who was a zealous advocate for employing black soldiers and preparing for the emancipation of slaves. Historian Ron Chernow wrote that Hamilton “was more of a solitary crusader without Laurens, lacking an intimate lifelong ally such as Madison and Jefferson found in each other.” Had Laurens not been killed at the very end of the Revolutionary War, Hamilton might have developed the kind of partnership with him that Jefferson had with Madison.⁶⁹ Like Laurens, Hamilton would be a strong opponent of slavery.

Hamilton had no warmer foe – inside or outside the Cabinet – than Thomas Jefferson. In a letter to President Washington, Jefferson wrote that Hamilton’s history was “a tissue of machinations against the liberty of the country.”⁷⁰ Gallatin had no warmer admirer than Jefferson, who understood the depth of Gallatin’s loyalty to him and his country. When Gallatin was the subject of newspaper attacks in 1806, Jefferson wrote Gallatin: “I cannot, therefore, be satisfied till I declare to you explicitly that my affection and confidence in you are nothing impaired, and that they cannot be impaired by means so unworthy the notice of candid and honorable minds. I make the declaration that no doubts or jealousies, which often beget the facts they fear, may find a moment’s harbor in either of our minds.” The President closed the letter by writing: “Accept my affectionate salutations and assurances of my constant and unalterable respect and attachment.”⁷¹

In the 1790s, Jefferson quickly understood Gallatin’s importance for opposition to the Federalist policies. In March 1796, Jefferson wrote Madison hoping that “our Gallatin would undertake to reduce this chaos to order and present us with a clear view of our finances.”⁷² In 1809, when Gallatin was considering leaving the Cabinet, former President Jefferson wrote him: “My opinion always was that none of us ever occupied stronger ground in the esteem of Congress than yourself, and I am satisfied there is no one who does not feel your aid to be still as important for the future as it has been for the past.”⁷³ Jefferson added: “I should certainly consider any earlier day of your retirement as the most inauspicious day our new government has ever known.”⁷⁴ Gallatin responded: “To have acquired and preserved your friendship and confidence is more than sufficient to console me for some late personal mortifications, though I will not affect to conceal that these, coming from an unexpected quarter, and being as I thought unmerited, wounded my feelings more deeply than I had at first been aware of.”⁷⁵ In 1823, three years before his death, Jefferson wrote Gallatin: “A visit from you to this place would indeed be a day of jubilee, but your age and distance forbid the hope. Be this as it will, I shall love you forever, and rejoice in your rejoicings and sympathize in your ails. God bless and have you ever in His holy keeping.”7⁶

Like Hamilton, Gallatin showed a pronounced ability to impress his elders. When he stayed in Richmond in the 1780s, he acquired many powerful Virginia advocates. Decades later, Gallatin later wrote: “I was received with that old proverbial Virginia hospitality to which I know no parallel anywhere within the circle of my travels. It was not hospitality only that was shown me. I do not know how it came to pass, but everyone with whom I became acquainted appeared to take an interest in the young stranger. I was only the interpreter of a gentleman, the agent of a foreign house that had a large claim for advances to the State; and this made me well known to all the officers of government and some of the prominent members of the legislature. It gave me the first opportunity of showing some symptoms of talent, even as a speaker, of which I was not myself aware. Everyone encouraged me and was disposed to promote my success in life. To name all those from whom I received offers of service would be to name all the most distinguished residents at that time at Richmond. I will only mention two: John Marshall, who, though but a young lawyer in 1783, was almost at the head of the bar in 1786, offered to take me into his office without a fee and assured me that I would become a distinguished lawyer. Patrick Henry advised me to go to the West, where I might study law if I chose, but predicted that I was intended for a statesman and told me that this was the career which should be my aim.”⁷⁷

Once in office, Gallatin like Hamilton showed a talent for prodigious work. Regarding his early work in the Pennsylvania legislature, Gallatin wrote: “I acquired an extraordinary influence in that body, the more remarkable, as I was always in a party minority. I was indebted for it to my great industry, and to the facility with which I under understand & carry on the current business The labouring oar was left almost exclusively to me. In the session of 1791-1792, I was put on 35 Committees, prepared all the reports and drew all their bills.”⁷⁸ Gallatin biographer Nicholas Dungan wrote: “From his first experience as an elected official....Gallatin was impressed by, and inclined toward, the type of harmonious compromise that could get the public business done.”⁷⁹ Historian Thomas K. McCraw wrote: “Gallatin’s special talent, a rare one much like Alexander Hamilton’s lay less in political horse-trading and back-slapping than in spending prodigious amounts of time framing careful legislation that stood a good chance of passage and, once enacted, of being administered efficiently. His major successes had to do with finance: tax plans to reduce the state’s debt; the chartering of the Bank of Pennsylvania, with several branches....and a general program of frugality overseen by the Committee on Ways and Means. Each of these measures foreshadowed Gallatin’s later policies as a congressman and as secretary of the treasury.”⁸⁰ Dungan wrote: “Gallatin’s work in the Pennsylvania legislature presaged multiple elements of his future career: his specialization in finance, his insistence on the reduction of the public debt and the repayment of all monies due, his preference for a central bank that safeguarded public funds from the whim of the legislature, his parliamentary role as secretary or scribe, his interest in education, and his belief in the importance of infrastructure, then known as internal improvements. Gallatin’s preference also emerged to act ‘in strict justice, without the slightest regard to party feelings of popular prejudices.’”⁸¹

Historian Nathan Schachner wrote of Hamilton: “To the end of his life he believed in the principles of tariffs and protection and tried to make the United States as self-sufficient as possible.”⁸² In contrast, Gallatin was a free trader. One man who took particular offense at Gallatin’s position on trade was Kentucky Senator Henry Clay, for whom high tariffs were an integral part of his American system – much of which Gallatin supported. Clay had first hand experience with Gallatin as speaker of the House and later as a fellow peace commissioner working to end the War of 1812. At an 1831 conference on trade and tariffs, Gallatin had taken a moderate stance – arguing that high tariffs were injurious to residents of both the North and the South. Clay counter-attacked: “Go home to your native Europe and there inculcate upon her sovereigns your Utopian doctrines of free trade and when you have prevailed upon them to unseal their ports and freely admit the produce of Pennsylvania, and other States, come back, and we shall be prepared to become converts, and to adopt your faith.”⁸³ A more objective picture of Gallatin’s talents and vision came from Richard Rush, who served as U.S. minister to London when Gallatin was minister in France: “A keen observer of men, and possessing a knowledge of books, which his knowledge of the world has taught him how to read, his stores of conversation are abundant and ever at command....In his flow of anecdote and reflections I had an intellectual repast.”⁸⁴

Gallatin was more immune to abuse than the thin-skinned Hamilton, for whom any criticism was an excuse to take up pen or pistol. Gallatin more naturally avoided confrontation. In February 1798, Gallatin wrote his wife that “I have been so long used to personal abuse from party that I hardly knew I had lately received any till your letter informed me that you had felt on the occasion.”⁸⁵ In 1809, Gallatin wrote a Swiss-American friend about the criticism and abuse they faced in their jobs: “At what time or in what country did you ever hear that men assumed the privilege of being more honest than the mass of society in which they lived, without being hated and persecuted? unless they chose to remain in perfect obscurity and to let others and the world take their own course, and in that case they can never have been heard of. All we can do here is to fulfil our duty, without looking at the consequences so far as relates to ourselves. If the love and esteem of others or general popularity follow, so much the better. But it is with these as with all other temporal blessings, such as wealth, health, &c., not to be despised, to be honestly attempted, but never to be considered as under our control or as objects to which a single particle of integrity, a single feeling of conscience should be sacrificed. I need not add that I preach better than I practise.”⁸⁶ Gallatin’s integrity sometimes ran afoul of those who lacked his principles.

In the face of the public and politicians, Hamilton and Gallatin were risk-takers. Gallatin’s willingness to venture into turbulent domestic and international waters got him into trouble. So did Hamilton’s. And in their understanding of the nation’s finances, they were similar though often opposed. Hamilton and Gallatin wanted to create a sound fiscal foundation for the new nation. Historian Joseph J. Ellis observed that Treasury Secretary Gallatin “was a short, balding and hawk-nosed, but his unimpressive appearance and lingering Genevan accent belied intellectual powers second to none among the rising generation of Republican leaders. Gallatin was only forty, and he was the one man in America capable of going toe-to-toe with Hamilton in debate over fiscal policy and comfortably holding his own.”⁸⁷

Both men were also very hard workers. The French diplomat Charles Maurice de Talleyrand came to know Hamilton during Talleyrand’s exile in America. Talleyrand observed the erstwhile Treasury secretary after he returned to private business in New York: “I have beheld one of the wonders of the world. I have seen a man who has made the fortune of a nation laboring all night to support his family."⁸⁸ One of Gallatin’s political opponents recounted the tale of a stagecoach passing the Gallatin home on Capitol Hill. A passenger asked who lived in the spacious home. The stagecoach driver responded: “Lives? Lives? Why, nobody lives there.” When the passenger noted that there was a light in the mansion’s window, the driver responded: “Oh, yes, the Secretary of the Treasury breathes there.”⁸⁹ When the British sacked Washington in 1814, one of the homes destroyed along with the White House was the house where Gallatin had lived before departing for diplomatic posts in Europe.

After his death in 1804, Alexander Hamilton languished for most of the 19th century in the shadows of his rival, Thomas Jefferson. Hamilton was eclipsed in reputation but not in policy. Long before Jefferson’s death in 1826, Hamilton’s policies and vision triumphed over Jefferson’s. Historian Stephen F. Knott noted: “The popular image of Hamilton as an un-American monarchist was solidified during the Jacksonian era in part because American politics, at least presidential politics, was dominated by men (Andrew Jackson, Martin Van Buren, John Tyler, James Polk) who were inclined, in most instances, to champion the Jeffersonian platform of states’ rights, agrarianism, expansion of suffrage, and strict constitutional interpretation and to oppose internal improvements and government intervention in the economy.”⁹⁰ Writing of the Republican victory by James Monroe of 1816, historian Garry Willis wrote: “John Randolph had a point when he said that they won by losing their souls. Jefferson had opposed the bank of the United States, public debt, a navy, a standing army, American manufacturing, federally funded improvement of the interior, the role of a world power, military glory, an extensive foreign ministry, loose construction of the Constitution, and subordination of the states to the federal government. All those things were firmly back in place in the aftermath of the war. Madison’s program for 1816 included a protective tariff for manufacturing interests, a permanent army staff, new ships for the navy, and internal improvements...”⁹¹ By the end of the 19th century, Hamilton biographer Henry Cabot Lodge could write: “We look in vain for a man who, in an equal space of time, has produced such direct and lasting effects upon our institutions and history.”⁹²

Henry Adams, great-grandson of John and Abigail Adams, took a more dispassionate look at the Hamilton and Gallatin than did his forebears: “Washington and Jefferson doubtless stand pre-eminent as the representatives of what is best in our national character or its aspirations, but Washington depended mainly upon Hamilton, and without Gallatin Mr. Jefferson would have been helpless. The mere financial duties of the Treasury, serious as they are, were the least of the burdens these men had to carry; their keenest anxieties were not connected most nearly with their own department, but resulted from that effort to control the whole machinery and policy of government which is necessarily forced upon the holder of the purse.”⁹³ Adams noted:

>Without question, Hamilton’s inventiveness in public finance in the early 1790s was necessary to the new American government. However, Americans tended to fear what they did not understand and Hamilton’s economic system was beyond the grasp of even many in government. Alexander Balinky wrote: “Hamilton wished to increase the power and scope of the central government and was quite willing to use the instrumentality of public credit to finance that object. Gallatin, beginning with an antipathy toward both public and private indebtedness, opposed it because it made possible the very expansion in the power of the government which he was committed to reduce.”⁹⁵ Hamilton was responding to the pressing needs of the government – with a view not only of immediate necessities but also of future opportunities.

Hamilton was a born combatant and some of his fellow Founders rose to fight him. “Among the well-intentioned men who were woefully backward in finance, if forward-looking in politics, were Hamilton’s three most savage critics of the 1790s: Jefferson, Madison and Adams. These founders adhered to a static, archaic worldview that scorned banks, credit, and stock markets. From this perspective, Hamilton was the progressive figure of the era, his critics the conservatives,” wrote Ron Chernow. Chernow argued that Hamilton’s opponents “considered banking and other financial activities as so much infernal trickery.”⁹⁶ But even as firm an opponent as Jefferson could grudgingly admit the worth of his adversary. Jefferson wrote Madison: “Hamilton is really a colossus to the anti-republican party. Without numbers, he is an host within himself.”⁹⁷

Albert Gallatin’s historical eclipse by the stars of Thomas Jefferson and James Madison, the two presidents he loyally served as secretary of the Treasury, lasted longer than Hamilton’s. However, as the Cambridge History of English and American Literature concluded: “The only other American statesman who can even remotely be compared to Hamilton is Gallatin, who even proved himself the superior of Hamilton as a technical financier.”⁹⁸ Hamilton and Gallatin were the two indispensable men of American finance. Henry Adams observed of Gallatin’s role:

No one has ever seriously questioned his supereminence among American financiers. No one who has any familiarity with the affairs of our government has failed to be struck with the evidences of his pervading activity and his administrative skill. His methods were simple, direct, and always economical. He had little respect for mere financial devices, and he labored painfully to simplify every operation and to render intelligible every detail of business. It may be doubted whether he ever made a mistake in any of his undertakings, and whether any work done by him has ever been found inefficient; but it is useless to catalogue these undertakings. His system was not one of detached ideas or of parti-colored design. As their scheme existed in the minds of Mr. Jefferson, Mr. Gallatin, and Mr. Madison, it was broad as society itself, and aimed at providing for and guiding the moral and material development of a new era, – a fresh race of men. It was not a mere departmental reform or a mere treasury administration that Mr. Gallatin undertook; it was a theory of democratic government which he and his associates attempted to reduce to practice. They failed, and although their failure was due partly to accident, it was due chiefly to the fact that they put too high an estimate upon human nature. They failed as Hamilton and his associates, with a different ideal and equally positive theories, had failed before them.⁹⁹

There is a symmetry to the reputations of Gallatin and Hamilton. Gallatin was defined by working for Presidents Jefferson and Madison – while Hamilton was defined by working against these two men before they became President. It may well be concluded that the only two men who truly understood the government finances of the United States during this period were Gallatin and Hamilton. Both also added an important if not always infallible political perspective to the Cabinet. While Hamilton and Jefferson sparred repeatedly in George Washington’s Cabinet, the Jefferson Cabinet in which Gallatin served from 1801 to 1809 was much more harmonious. Gallatin biographer Henry Adams wrote: “During eight years the country was governed by these three men – Jefferson, Madison and Gallatin – among whom Gallatin not only represented the whole political influence of the great Middle States, not only held and effectively wielded the power of the purse, but also was avowedly charged with the task of carrying into effect the main principles on which the party sought and attained power.”¹⁰⁰

The Madison cabinet in which Gallatin later served was a broken vessel from the outset. Jefferson’s ill-considered trade embargo policy insured the new administration would have serious difficulties. As Henry Adams observed of Gallatin’s service in the first Madison Administration beginning in 1809: “As usual, the task of creating and carrying through Congress the Executive policy fell upon Mr. Gallatin, and as usual, bowing to the necessities of the situation, he set himself to invent some scheme that would have a chance of uniting a majority in its support and of giving government solid ground to stand upon. The task was more than difficult, it was impossible. Since the war-policy broke down and the embargo was abandoned, no solid ground was left; Mr. Gallatin, however, had this riddle to solve, and his solution was not wanting ingenuity.”¹⁰¹

In 1809, Gallatin was barred from the office he and Madison sought for him – secretary of State – by a cabal of opponents in the Senate. Their intrigue and the weakness of the man, Robert Smith, they installed as secretary of state crippled the Madison Administration from the outset. Gallatin biographer Nicholas Dungan wrote: “For years, Gallatin had antagonized the Smiths. Early in the first Jefferson administration, he had written to the president to criticize Secretary of the Navy Robert Smith’s management of the Navy Department. ‘I cannot discover any approach towards reform in that department,’ he said, and he was especially annoyed at Robert Smith’s habit of coming to the Treasury with last-minute demands for immediate cash.”¹⁰² Henry Adams wrote of Smith that “although too dull a man to have any distinct scheme of his own or any depth of intrigue; although obliged to let the President write his official papers and Mr. Gallatin control both his foreign and his domestic policy, he nevertheless used the liberty thus obtained to talk with unreserved freedom both to Federalists and discontented Republicans about the characters of his associates and the contents of his despatches.”¹⁰³ Smith had some reason to dislike Gallatin since the Navy Department was usually the prime target of Gallatin’s drive for budget cuts during the Jefferson administration. Historian Alexander Balinky wrote: “Smith [was] unwilling to yield to the pressure for economy. Smith was even less willing to manage the affairs of the navy in such a way as to avoid giving Gallatin cause for his charges of inefficiency and mismanagement.” Balinky added: “Gallatin’s position on the question of naval expenditures antagonized not only those in the Naval Department, but the Federalists (as well as some republicans) in Congress as well. He was accused of wanting to starve the navy out of existence, of trying to run both the Treasury and the navy Department and of showing no understanding of the peril into which was putting national security.”¹⁰⁴ Virginian John Randolph, who was sometimes irresponsible in his condemnation of Jefferson and Madison, wrote in 1811 that the Madison “Cabinet presents a novel spectacle in the political world; divided against itself, and the most deadly animosity raging between its principal members, what can come of it but confusion, mischief and ruin?”¹⁰⁵

Partly to defend themselves, Gallatin and Hamilton left a strong literary as well as political legacy. Without question, the short-lived Hamilton was more prolific than the long-lived Gallatin. Historians Stanley Elkins & Eric McKitrick wrote: “Amid all his regular duties at headquarters he somehow found time not only to read extensively but to compose a series of what can only be called state papers, substantial little treatises that dealt with nothing less than the health of a future American nation. In this category were a seven-thousand-word letter to James Duane in 1780 with a plan for overcoming the ‘want of power in Congress,’ a longer one to Robert Morris in 1781 outlining a complete system of national finance, and a series of six essays entitled The Continentalist, published in the New York Packet in 1781 and 1782, giving a whole set of political and economic prescriptions for imparting strength and energy to the Confederation.”¹⁰⁶

The “state papers” Hamilton and Gallatin authored helped define American finance for the rest of the nation’s decision-makers. Hamilton composed three great state papers while Secretary of the Treasury. Gallatin wrote three before he joined the Jefferson Cabinet. Gallatin biographer Nicholas Dungan noted that in the 1800 “congressional session, Gallatin pursued his financial specialization, speaking out against increased government debt.”¹⁰⁷ In July 1800, Gallatin published a major paper, Views of the Public Debt, Receipts and Expenditures of the United States. In what amounted to a political position paper for the Jefferson campaign, Gallatin questioned the financial figures provided by the Adams administration – arguing that the federal debt had increased rather than decreased. The paper set the stage for Jefferson’s election and the potential reversal of the financial policies Hamilton had devised for the nation in the first Washington Administration.

But Gallatin and Hamilton were more than thinkers. They did not hide in rural retreats like Jefferson, Madison, and even Adams did when times were tough. They did not even run from the heat and epidemics of the nation’s capital when they could easily have escaped. When other government leaders ran or rode away, they stayed at their posts – devising policy, seeking congressional approval and potential allies for solutions to the nation’s domestic and foreign problems. In September 1793, both Gallatin and Hamilton fell ill in Philadelphia with the symptoms of the yellow fever that swept the city and killed thousands of residents. “All of Hamilton’s literary work belonged to some special occasion, was in response to a particular need of the time,” wrote biographer Broadus Mitchell. “This does not mean that his reasoning was opportunist, that his arguments were tracts. His several objects were connected, each aided the next. He buttressed his advocacies with appeal to the past and future as well as to the present.”¹⁰⁸ Hamilton biographer Henry Cabot Lodge concluded that “the best evidence is in the results. There was no public credit. Hamilton created it. There was no circulating medium, no financial machinery; he supplied them. Business was languishing, and business revived under the treasury measures. There was no government, no system with life in it, only a paper constitution. Hamilton exercised the powers granted by the Constitution, pointed out those which lay hidden in its dry clauses, and gave vitality to the lifeless instrument. He drew out the resources of the country, he exercised the powers of the Constitution, he gave courage to the people, he laid the foundations of national government, – and this was the meaning and result of the financial policy.”¹⁰⁹

Hamilton as Secretary of the Treasury

Hamilton was not George Washington’s first choice for Secretary of the Treasury in 1789. Washington initially approached Pennsylvania’s Robert Morris, who directed the America’s finances during the Revolutionary War and helped finance Gallatin’s early land purchases. But Morris declined to take the post, arguing that “you will be no loser by my declining the secretaryship of the treasury, for I can recommend to you a far cleverer fellow than I am for your minister of finance in the person of your former aide-de-camp, Colonel Hamilton.” When President Washington responded that he was unaware of Hamilton’s financial acumen, Morris said: “He knows everything, sir. To a mind like his nothing comes amiss.”¹¹⁰

“Because the financial situation had been most powerful impetus to the establishment of the new government, the most important of the new executive departments was certain to be the Treasury,” wrote historian John Steele Gordon wrote. “It soon had forty employees to the State Department’s mere five. And its tasks were as clear as they were monumental.” Gordon noted that Hamilton’s youthful background in commerce gave him a different and much more urban perspective than the other founders. “He had grown up, almost literally, in a counting house and lived most of his life in what had already long been the most cosmopolitan and commercial-minded city in the country.”¹¹¹ Political scientist Jack Rakove wrote: “At the Treasury Hamilton expected to play the ministerial role he outlined in an intriguing aside in Federalist No. 35. ‘Nationalists in general, even under governments of the more popular kind, usually commit the administration of their finances to single men or to boards composed of a few individuals,’ he wrote, trusting ‘Inquisitive and enlightened Statesmen’ to determine ‘the objects proper for revenue’ before submitting their refined plans to ‘the sovereign or Legislature’ for approval.”¹¹² John C. Hamilton wrote of his father after he left the elder Hamilton Cabinet: “Frequent as were Hamilton's forensic efforts and notwithstanding his engagements as advising counsel, his interest in public affairs was predominant. He felt that he belonged to the nation.”¹¹³

“The knowledge that Washington intended Hamilton for the Treasury soon became an open secret and doubtless had much to do with the opposition in Congress to granting the secretary too much power,” Hamilton biographer Nathan Schachner wrote. “The opponents of strong government feared his views and his undoubted abilities, and wished to hamstring him from the start.”¹¹⁴ On September 12, 1789, President Washington officially nominated Hamilton as Secretary of the Treasury. It was a role for which Hamilton had long been preparing. In his biography of Washington, Chief Justice John Marshall wrote of Hamilton: “To talents of the highest order, he united a patient industry, not always the companion of genius, which fitted him in a peculiar manner for the difficulties to be encountered by the man who should be placed at the head of the American finances.”¹¹⁵ Historians Stanley Elkins & Eric McKitrick observed: “Hamilton’s long letter to Robert Morris written from headquarters in 1781 was in effect the first of his state papers on political economy and finance. One of the books he is known to have borrowed for assistance in preparing it was the Essays of David Hume. By 1786 or so, his emerging ideas on public credit and the particulars of funding had been given an added infusion of specificity by a study of Jacques Necker’s writings on that subject, and no doubt by the works of various other authorities as well. His synthesis of all of them was more or less complete by the time he took office, and his own grand vision was fully before him as he began to draft the first of Treasury reports in 1789.”¹¹⁶

Hmailton’s reports as Treasury secretary have drawn almost as much attention as his financial reforms themselves. Historian Esmond Wright observed: “The three great state papers of Alexander Hamilton were his reports on Publick Credit (January, 1790), on A National Bank (December, 1790) and on Manufactures (December, 1791). The first of these did not cause but further widened differences already apparent between Federalists and Antifederalists, between what [William] Maclay called the party, on the one hand, of the speculators and the courtiers (‘the party of interest’), and, on the other, ‘the party of principle.’ But Hamilton, if a courtier, had his own principles in abundance, even if the most avowed of them was the advancement of their author.”¹¹⁷ H istorian Gordon S. Wood noted: “These [public] reports, powerfully written and argued, are the source of most of Hamilton’s greatness as a statesman.”¹¹⁸

“Hamilton’s fiscal planning, at once bold and judicious, is the more remarkable when we remember the difficulties under which he worked,” wrote biographer Broadus Mitchell. “The department of the Treasury must be organized, officers chosen, an accounting system established. This would have presented problems in any case, but all must be accomplished amidst the detritus of the board of Treasury of the Confederation. William Duer, the first Assistant Secretary, was a holdover from the previous period of accumulated confusion. Though his reputation at the time was high, he proved a poor choice. With his enterprising temper, he may have contributed to the sweep of Hamilton’s proposals, and his knowledge of previous mistakes may have been serviceable. But his bad judgment included misconduct in office which, if generally known at the time, would have compromised the integrity of the Treasury in its critical beginnings.”¹¹⁹ Duer’s bad judgment after leaving office was worse.

The Treasury Department constituted the center of the new government in New York City and later Philadelphia. Jefferson biographer Claude G. Bowers wrote of Hamilton, “With the startling effect of a magician at his tricks he created the machinery of his complicated department, selected his assistants with discrimination, trained them with meticulous care in their duties, outlined his plans for revenue immediately required, and sat down with joy to the preparation of his ‘Report on the Public Credit,’ which was to proclaim the public faith and establish the Nation’s credit.”¹²⁰ Hamilton produced his report in January 1790, just four months after taking office. He had experienced the lack of public and business support for the national government – both during and after the Revolution. Hamilton clearly wanted to align the interests of the nation’s wealthy citizens with that of the government. In his report, Hamilton argued: “If all the public creditors receive their dues from one source, distributed with an equal hand, their interest will be the same. And having the same interests, they will unite in the support of the fiscal arrangements of the government – as these, too, can be made with more convenience where there is no competition. These circumstances combined will insure to the revenue laws a more ready and more satisfactory execution.”¹²¹ There was a unity to Hamilton’s thinking. Hamilton wrote that “Credit is an entire thing. Every part of its has the nicest sympathy with every other part. Wound one limb and the whole tree shrinks and decays.”¹²² President Washington gave his young subordinate both latitude and support. Historian Gordon S. Wood wrote: “Although the two men had similar realistic assumptions about human nature and shared a common outlook on the future of the United States, it was actually Washington’s sensitive appreciation of his surrogate son’s brilliance together with his careful handling of Hamilton’s extremely high-strung and arrogant nature that ultimately made their very successful collaboration possible.” Hamilton could be condescending, even with George Washington. Wood wrote: “Confronted with such ignorance of banking and finance, Hamilton in his state papers sometimes assumed the exasperated tone of the sophisticated Wall Street lawyer explaining the intricacies of banks and credit to country bumpkins.”¹²³

Hamilton’s personality provoked jealousy and fear in other politicians in the new government. When Hamilton indicated he wanted to present his report in person to the House of Representatives, Congressman Elbridge Gerry proposed that Hamilton be directed to make his report “in writing.” Most congressmen, even though allied with Hamilton, favored this approach. Hamilton biographer Nathan Schachner wrote: “The consequences were far-reaching. The whole course of government in the United States was set in a definite mold. Thereafter no cabinet member ever appeared in congress personally to explain and defend his proposals, and that interacting influence characterizes the British form of government never became a part of the American scene.”¹²⁴

Much to Madison’s and Jefferson’s chagrin, Hamilton’s economic model was heavily dependent on the British example. Historian Gordon S. Wood wrote: “To those steeped in this radical Whig ideology, Hamilton’s system threatened to re-create the kind of government and society that many Americans thought they had destroyed in 1776. Such a hierarchical society, based on patronage connections and artificial privilege and supported by a bloated executive bureaucracy and a standing army, would in time, the Republicans believed, destroy the integrity and independence of the republican citizenry. Hamilton’s federal program, including the funding of Revolutionary debt, assuming the state debts, adopting excise taxes, establishing a standing army, and creating a national bank, seemed to be reminiscent of what Sir Robert Walpole and other ministers had done in England earlier in the century. Hamilton appeared to be using his new economic system to create a swelling phalanx of what Jefferson called ‘stock-jobbers and king-jobbers’ in order to corrupt Congress and build up executive power at the expense of the people in the way eighteenth-century British ministers had done.”¹²⁵ Ron Chernow wrote: “Legislators recalled that British tax abuses had spawned the Revolution and that chancellors of the exchequer had directed huge armies of customs collectors to levy onerous duties. To guard against such concentrated power, Elbridge Gerry wanted to invest the Treasury leadership in a board, not an individual. It was Madison who insisted that a single secretary, equipped with all necessary powers, should superintend the department.”¹²⁶ Biographer Forrest McDonald wrote: “Like the enlightened despot Charles Frederic of Baden, Hamilton proposed to make his countrymen into ‘free, opulent, and law-abiding citizens, whether they liked it or not’; like the Prussian philosopher G.C. Lamprecht, who drew up a social blueprint for another benevolent despot, his master Frederic the Great, Hamilton set for himself ‘the task of making the citizens in every regard more well-behaved, healthier, wiser, richer, and more secure.’ Specifically, he proposed to use his administration of the public finances as an instrument for forging the American people into a prosperous, happy, and respected nation.”¹²⁷ Historian E. James Ferguson wrote: “Congress, except for a small minority, was thoroughly receptive to the Secretary’s ideas on funding (if not on assumption).”¹²⁸

What was needed by the new government was vision and organization. Hamilton supplied both. “From the first Hamilton proved himself an excellent administrator,” wrote historian Broadus Mitchell. “A decade before, he had urged the importance of resting responsibility for chief departments on competent individual heads. In the event he had made himself answerable to his plan. Inevitably, in conducting the office which had the largest staff and the greatest amount of business, slips happened. Though critics in Congress had hawk eyes for any inadvertence, much dereliction in the Treasury, the instances were so few that we may readily count them.”¹²⁹

Hamilton was not only a born administrator. He was a born legislator as well. Biographer Broadus Mitchell wrote: “Hamilton always prized the part that excellent administration could play in making legislation acceptable. His stress on efficient public housekeeping was novel in his day, for men preferred to argued about political rights and oppressions, and did not descend to consider convenient compliance with law. Hamilton’s perception that many solutions lay in just procedures of enforcement anticipated a vast development of our policy. The enlarged role of the executive, as compared with the legislative and judicial functions, has produced a whole new area, administrative law, unsuspected by our forefathers.” Mitchell argued: “In all of Hamilton’s Treasury proposals, political purpose was mixed with fiscal design. This was no disingenuous use of familiar means to ulterior ends. Especially at the outset of the nation, economic health was necessary to political strength, and vice versa.”¹³⁰

One of Hamilton’s disappointments was the break between himself and James Madison, with whom Hamilton had cooperated at Annapolis in 1786 to call the Constitutional Convention of 1787 and after that convention to write the Federalist Papers. Historian Gordon S. Wood wrote: “When Hamilton became secretary of the treasury, he had every reason to believe that this cooperation between himself and Madison, the Federalist leader in the House of Representatives, would continue.”¹³¹ Nathan Schachner noted that Hamilton “did what he rarely ever did – he asked for advice.”¹³² Hamilton wrote Congressman Madison: “May I ask of your friendship to put on paper and send me your thoughts on such subjects as may have occurred to you, for an addition to our revenue, and also as to any modifications of the public debt, which could be made consistent with good faith – the interest of the public and of the creditors.”¹³³ Madison’s reply was vague, writing: “It might be a soothing circumstance to those least favorably disposed, if by some operation the debt could be lessened by purchases made on public account; and particularly if any impression could be made on it by means of the Western lands.”¹³⁴ Hamilton biographer John C. Miller wrote: “Nothing except the defection of President Washington could have given Hamilton a more unpleasant jolt. When he learned of Madison’s decision, he exclaimed that it could not be true – he had already cleared his report with Madison and the Virginian had promised his support. So acute was his dismay that Hamilton declared that he if he had known Madison was to oppose him, he would not have accepted the post of Secretary of the Treasury.”

In actuality, Hamilton had at no time received positive assurance of Madison’s aid; rather, he inferred such support from what he knew of the Virginian’s views and from his silence while Hamilton was drawing up the Report on Public Credit. In November, 1789, Hamilton had solicited Madison’s views regarding the financial problems confronting the country. In reply, Madison had suggested, among other things, the imposition of a direct federal land tax. Knowing that Madison had previously favored the assumption of state debts and the funding of the national debt, Hamilton had assumed that since his friend did not touch upon these matters in his letter of November, 1789, his attitude remained unchanged.”¹³⁵

Fittingly, Washington’s financial genius did not get along with Pennsylvania’s emerging economic genius. In 1793, state legislator Albert Gallatin was chosen to take one of Pennsylvania’s two seats in the Senate. Gallatin biographer Nicholas Dungan wrote: “Simply because of Gallatin’s preeminence in the lower house, and because he was a fair-minded but convincing champion of the interest of the western part of Pennsylvania, this combined assembly, even though it had a Federalist majority, elected Gallatin a U.S. senator by a vote of forty-five to thirty-seven on February 28, 1793, in Philadelphia. Gallatin himself said of this election, ‘It was my constant assiduity to business and the assistance derived from it by many members, which enabled the republican party in the Legislature, then a minority on a joint ballot to elect me and no other but me of that party, Senator of the United States. This choice made in February of 1793 was contrary to my wishes and opinion.’”¹³⁶ When Gallatin took a seat in the United States Senate in December1793, his first act was to ask for a comprehensive report on Hamilton’s operations as Secretary of the Treasury. “This made him an overnight wunderkind among the Secretary’s friends and foes alike,” wrote historian C. Daniel Vencill.¹³⁷ Biographer Henry Adams noted: “The appearance of Mr. Gallatin in the Senate, with already a high reputation as a financier, boded ill for the comfort of the Treasury, and it is difficult to see how a leader of the opposition under the circumstances could possibly have performed his duty without giving trouble. One of Mr. Gallatin’s financial axioms was that the Treasury should be made to account specifically for every appropriation; a rule undoubtedly correct, but very difficult to apply.”¹³⁸ Gallatin biographer Nicholas Dungan wrote that “on January 8,1794, he introduced a motion in the Senate, in keeping with his views on sound financial management, calling for detailed reports in four broad categories for every year since 1789: (1) outstanding domestic debt divided into six categories, (2) domestic debt that had been redeemed, again under specific categories, (3) foreign debt, similarly broken down into categories, and (4) actual receipts and expenditures for each branch of the government, the comparison of expenditures to appropriations, and a statement of the balances remaining in each Treasury account.” Dungan wrote that Gallatin “supported an appropriations system whereby monies made available to the executive branch by Congress should be designated for a specific purpose and spent only for that purpose, rather than allocated to the head of the department for general use.”¹³⁹

Treasury Secretary Hamilton was not pleased by these requests. Historian Forrest McDonald wrote: “These resolutions resulted in series of demands for reports on trivial matters, consumed an inordinate amount of Hamilton’s time, hampered the operations of the Treasury, and precluded the systematic investigation that Hamilton desired. In submitting the reports as they were demanded, Hamilton made no effort to conceal his irritation.”¹⁴⁰ Gallatin was “the only member of the opposition capable of coping with Hamilton in the field of finance,” noted Claude G. Bowers.¹⁴¹ Hamilton biographer John C. Miller wrote: “By holding the Secretary to strict accountability, Gallatin hoped to correct what he held to be the ‘flagrant vice’ of Hamilton’s administration – ‘the total disregard of laws, and application of public moneys by the Department to objects for which they were not appropriated.’”¹⁴² Secretary Hamilton complained to the Senate that Treasury Department work was “interrupted in their due course by unexpected, desultory, and distressing calls for lengthy and complicated statements, sometimes with a view to general information, sometimes for the explanation of points which certain leading facts, witnessed by the provisions of the laws and by information previously communicated, might have explained without these statements, or which were of a nature that did not seem to demand a laborious, critical and suspicious investigation, unless the officer was understood to have forfeited his title to a reasonable and common degree of confidence.”¹⁴³

Hamilton had other problems more vexatious than Gallatin’s inquiries. Biographer Norman Schachner wrote: “On February 27, 1793, William B. Giles, representative from Virginia and a close friend of Jefferson and Madison, moved a series of resolutions in the House that was the most direct public attack yet made on the integrity of the Secretary of the Treasury and his official acts in office. The resolutions, nine in number, minced no words. They charged Hamilton with specific violation of an Act of Congress, dated August 4, 1790, in applying portions of appropriated funds to purposes not authorized by law. They charged Hamilton with deliberately deviating from the instructions of the President of the United States in transfer of moneys raised by loans in Europe to the United States, and in failing to provide Congress with official information in his acts in connection therewith.^”144 Jefferson biographer Christopher Hitchens wrote: “It was believed by the Virginians that Hamilton’s rapid transfers of money and accounts must conceal something disgraceful, but in all cases the Treasury secretary outclassed his critics by furnished true statements in conformity with near impossible deadlines.”¹⁴⁵

Gallatin, meanwhile, had his own pressing problems. Historian Harry Ammon wrote: “Determined to destroy this momentary Republican advantage, the Federalists moved to unseat Gallatin on the technicality that he was not eligible since he had not been an American citizen for the nine-year period required by law. Although Gallatin’s qualifications had been challenged earlier in the session, action had been postponed until the Federalists felt certain of victory. [James] Monroe, [John] Taylor and Aaron Burr conducted a ten-day fight on Gallatin’s behalf, losing by a vote of fourteen to twelve.”¹⁴⁶ Gallatin became close to Burr and would remain so long after others abandoned the New York politician. Historian Garry Wills wrote of the New York senator’s assistance: “Burr had not only given a lawyerly speech in his favor, but supplied him with legal documents and arguments about the date of his naturalization.”¹⁴⁷

Federalist allies of Hamilton effectively quashed the Treasury investigations when they ousted Gallatin from his Pennsylvania seat on the dubious grounds that he had not yet met the minimum requirements of citizenship to be elected to the Senate. Gallatin had expected the difficulty and raised it himself when he was elected by the Pennsylvania legislature. Henry Adams wrote: “The doubt which Mr. Gallatin had expressed in caucus as to his eligibility to the Senate was highly indiscreet; had he held his tongue, the idea could hardly have occurred to anyone, for he was completely identified with America, and he had been a resident since a time antecedent to both the Federal Constitutions...”¹⁴⁸ Over two months before the final vote, Gallatin wrote his wife: “As I used no intrigue in order to be elected, as I was indeed so rather against my own inclination, and as I was undoubtedly fairly elected, since the members voted viva voce, I will be liable to none of those reflections which sometimes fall upon a man whose election is set aside, and my feelings cannot be much hurt by an unfavorable decision, since having been elected is an equal proof of the confidence the Legislature of Pennsylvania reposed in me, and not being qualified, if it is so decided, cannot be imputed to me as a fault.”¹⁴⁹ Historian Thomas K. McCraw noted: “Battling hard to keep his seat, Gallatin was able to put forward only a feeble argument: that he had briefly served in the Revolutionary War during 1780 while he lived in Maine as a twenty-one-year-old, and he deserved citizenship from that date. He had gone out on one patrol, but, as he admitted years later, ‘As I never met the enemy, I have not the slightest claim to military service.”¹⁵⁰ Unfortunately for Gallatin, two legislators testified overhearing Gallatin state when he had been nominated that “it is out of the question, I have not been a citizen long enough to entitle me to serve in that station."¹⁵¹

The Federalists’ 14-12 victory over Gallatin at the end of February 1794 was a temporary triumph. “One more vote would have secured it, as the Vice-President would have voted in my favor; but heaven and earth were moved in order to gain that point by the party who were determined to preserve their influence and majority in the Senate,” ex-Senator Gallatin wrote a friend.¹⁵² Gallatin soon was elected to both the Pennsylvania legislature and the national Congress. By the time Congressman Gallatin took his seat in Congress in December 1795, Secretary Hamilton was gone from the Treasury Department. Hamilton’s controversial policies remained in place. But for the next two decades, Gallatin was to mirror Hamilton’s accomplishments and his seminal reports on the nation’s finances and economy.

The Whiskey Rebellion

Although they rejected Gallatin’s election to the Senate, the Federalists did not quash anti-Administration feelings of Gallatin’s neighbors. Western Pennsylvania farmers needed a way to transport barley and wheat to eastern markets. They found that converting their grains to whiskey was the most efficient way to market their crops and conduct commerce. The federal excise taxes on whiskey that Alexander Hamilton had enacted hit them hard – disproportionately hard, they felt. But, the government’s fiscal problems were equally hard. Historian E. James Ferguson wrote that “the Federalists were aware of a deep-seated aversion to direct federal taxes. Until the new government was more firmly established, they knew that taxation must be confined to duties on imports and possibly an excise on liquor. Even among Federalists there as a notion that direct taxes, if levied, should incorporate elements of the requisition system” used under the Articles of Confederation.¹⁵³ Instead, a direct approach was chosen. “Hamilton was caught on the horns of a dilemma,” noted biographer Ron Chernow. To prop up the federal government, he had to restore public credit. To restore public credit, he had to institute unpopular taxes, and this ‘gave a handle to its enemies to attack’ the federal government, he later conceded.”¹⁵⁴ As a Pennsylvania legislator in 1791, Gallatin had strenuously opposed the whiskey tax. Hamilton supplied Congress with a Report on Spirits, Foreign and domestic on March 6, 1792.¹⁵⁵ Historian John Ferling observed: “The whiskey bill was defeated three times in the House of Representatives before it finally passed.” Ferling wrote: “Alternatives had existed to the whiskey tax. Revenue could have been raised by selling western lands, or Hamilton might have urged a land tax, a levy on houses and commercial buildings, or a head tax.”¹⁵⁶

In the summer of 1791, opposition to federal excise taxes had begun fermenting in western Pennsylvania, where Gallatin had his political base. According to biographer L.B. Kuppenheimer, “Gallatin viewed the excise tax as exemplary of the kind of erosion that would eat away at individual freedom, so essential to his concept of republican democracy. In arguments presented on the floor of the Pennsylvania Assembly, Gallatin expressed his fear that such an indirect tax was discriminatory and ‘that a direct tax (was) better suited to a republican government than an excise: the one is an equal tax, the other a very unequal one, and will bear hard upon the honest and industrious citizen, whilst the wealthy and conniving part of the community will evade the payment by various strategems.’”¹⁵⁷ Gallatin biographer Nicholas Dungan noted: “”Gallatin defended the western farmers’ point of view in the legislature, and during the summer recesses of 1791 and 1792, when he returned to western Pennsylvania, he also acted as clerk at protest meetings against the excise tax in Brownsville and Pittsburgh. Although he neither originated nor vigorously supported these protests, and although they were not criminal, the words used were violent in their tone. He did not protest loudly against them.”¹⁵⁸

“Westerners in nearly all states containing trans-Appalachian settlements had long been leery of a whiskey tax,” wrote historian Thomas K. McCraw. “Pennsylvania itself had levied such a tax, only to repeal it after rancorous opposition from the western counties. The idea of a federal tax on whiskey struck Westerners as little short of outrageous. Trans-Appalachian residents of Pennsylvania and very other affected state tended to be suspicious of any federal authority at all over their working lives.”¹⁵⁹ Historian Forrest McDonald wrote: “Along with counterparts and kinsmen in the Carolinas and Kentucky, the Scotch-Irish in western Pennsylvania had resisted the 1791 excise tax on whiskey from the beginning – though home distilleries were exempt from the tax, though the tax was modest (about 7 ½ cents a gallon) and though, as Hamilton pointed out, the federal government paid out four or five times as much to them (for whiskey purchased as army rations) as it collected in taxes from them. In 1792 they became so violent in their treatment of revenue officers that Hamilton was afraid that force would be necessary to bring them into compliance with the law. A presidential proclamation, however, coupled with patience, persuasion, and a moderation of the collection and enforcement procedures, gradually pacified the area and brought most of the distillers into compliance with the law. In the spring of 1794, only 37 of the 1,200 or so distillers in the area were delinquent.”¹⁶⁰

“In the West, whisky was not only a potable but a form of manufacture and a medium of exchange,” observed Hamilton biographer John C. Miller. “It was estimated that half the farmers of western Pennsylvania had a still ‘out back’ which they tended with loving care. In some parts of the country, travelers beheld on every side smoke curling from the stillhouses – certainly a cheering sight to the parched and footsore. At the country stores, a gallon of whisky bought a definite amount of feed and dry goods. Even the salaries of ministers were sometimes paid on ‘Monongahela rye’ – a liquid that could hardly be described as sacramental, but which certainly conveyed some idea of hell-fire.”¹⁶¹ One of the few things that operated at a profit was a distillery. Joel Achenbach noted: “A horse could carry two kegs of 8 gallons each. The spirits were worth 50 cents a gallon the western side of the Alleghenies and a dollar a gallon on the eastern – and yet the tax was the same per gallon on both sides of the mountains. Sometimes the pack horses would return with iron or salt. Every farm had a still. The westerners had opposed the excise tax for three years and were prone to tarring and feathering the tax collectors who dared try to enforce it.”¹⁶² Historian Forrest McDonald argued, however, that “contrary to another myth, they distilled little if any whiskey as a ‘cash crop’ to be sold in the east. Rather, they distilled it in prodigious quantities and drank almost all of it themselves.”¹⁶³

“During the debate over the Constitution the Anti-Federalists has warned that granting the federal government the power to levy such internal taxes would result in hordes of excise men and military enforcement,” wrote historian Gordon S. Wood. “Indeed, so hated were excise taxes that the first Congress in 1790 voted down Hamilton’s bill. But after a renewed effort in 1791, with physicians endorsing the tax on the grounds that it would cut down on Americans’ excessive drinking of hard liquor, the excise finally passed. Even Madison admitted that he saw no other way of raising the needed revenue.”¹⁶⁴ Economic historian Charles Sellers wrote: “In attempting to exact from the citizenry not only greater revenues but greater acquiescence in centralized authority, Alexander Hamilton designed his whiskey tax to make the weight of federal power palpable to interest farmers who otherwise fell outside its scope.”¹⁶⁵ Wood wrote that “in 1794 the government proposed new excise taxes on snuff and sugar that aroused a renewed interest in the whiskey tax. In February the president reissued a proclamation expressing the government’s determination to enforce the law in the West. The national government was increasingly fearful that settlers in Kentucky and western Pennsylvania were on the verge of breaking up the Union – perhaps with the aid and encouragement of British officials in Canada. Hamilton thought leniency toward the tax evaders had gone on long enough, and he concluded that ‘there was no choice but to try the efficiency of the laws in prosecuting with vigour delinquents and Offenders.’”¹⁶⁶ For Hamilton the issue was as much about civil order as it was about tax collection.

Hamilton almost certainly invited a confrontation over the tax. Historian James Roger Sharp wrote: “After the passage of the excise law, it quickly became apparent that the tax would be fiercely resisted. Almost immediately tax collectors were tarred, feathered, and terrorized with threats of greater physical abuse. Even citizens who were sympathetic with or merely only in favor of complying with the law were sometimes treated to coats of tar and feathers. In a few cases barns were burned and houses pulled down.” Hamilton was prepared for opposition. Sharp wrote that the “stalemate was abruptly broken when the government decided to enforce the excise more energetically in Pennsylvania, both Washington and Hamilton agreeing that while there was noncompliance and opposition in the Carolinas and Kentucky as well, it would be easier and less costly to exert federal power in western Pennsylvania than in remoter regions. Pennsylvania, they determined, should be made a test case for federal enforcement and once the insurgency was quelled there, other resistance would be intimidated into submission.”¹⁶⁷ On August 10, 1792, Hamilton wrote Washington that “it affords me much satisfaction to observe that your mind has anticipated the decision to enforce the Law; in case a refractory spirit should continue to render the ordinary & more desirable means ineffectual. My most deliberate reflections have led me to conclude, that the time for acting with decision is at hand.”¹⁶⁸

Hamilton prepared a proclamation for President Washington to issue. “Washington suddenly became cautious. Now that he was being forced into positive, open action, the implications troubled him,” wrote biographer Norman Schachner. “Before he went ahead he wanted a united cabinet in back of him. Hamilton saw to it that Knox and Randolph endorsed the proclamation. But they were without much weight; Washington considered it to be essential that Jefferson countersign it.” The proclamation was sent to Jefferson’s Virginia home, but in the meanwhile the agitation in western Pennsylvania virtually ceased.

By the summer of 1794, the anti-tax agitation had matured and boiled over in the Whiskey Rebellion. By then Gallatin had been away from western Pennsylvania for a year and a half and was out of touch with the depth of the agitation. In July Gallatin attended protest meetings and attempted again to temper the agitation – placing him occasionally in anomalous positions which he later admitted was “my only political sin.”¹⁶⁹ Jefferson biographer Claude G. Bowers wrote of western Pennsylvanians: “No people in America received so little benefit from the Government, and none were hit so hard by the Excise Law. Perhaps these pioneers who thought themselves abused were ignorant, but there was an intellectual giant among them who knew they were abused. This was Albert Gallatin.”¹⁷⁰ Gallatin was invited to attend one protest meeting that July at Redstone Old Fort in the summer of 1794. The meeting endorsed a resolution that the excise tax was “unequal in its operation, immoral in its efforts, dangerous to liberty, and especially, oppressive and injurious to the inhabitants of the western country.” Gallatin, then a state representative, duly presented the resolution to the Pennsylvania State Legislature when he attended that August. Biographer Raymond Walters, Jr. wrote: “To Gallatin the excise seemed to threaten the liberty of Americans because enforcement would require increasing policy powers almost indefinitely. Moreover, there was a real danger ‘that this excise will in degrees be extended to other articles of consumption, until everything we eat, drink, or wear’ would be ‘subjected to heavy duties and the obnoxious inspection of a host of officers.’”¹⁷¹

Hamilton took a very different view. Hamilton biographer John C. Miller wrote: “Hamilton did not account it an evil that one of the effects of the excise was to squeeze the small distillers out of business and to concentrate the industry in a few larger units. In his opinion, the industry suffered from too much dispersion of labor and capital, stemming from the fact that it was carried on in households rather than in factories. The small operator who, aided by wife and children, operated his still on a part-time basis offended Hamilton’s organizational sense and made the collection of the excise more difficult. For these reasons, he would not have been sorry to see the small distillers driven to the wall – the place, indeed, where they were being pushed.”¹⁷²

The immediate cause of revolt, noted historian James Roger Sharp, was that “a federal marshal appeared in western Pennsylvania with writs ordering some sixty distillers into court. Committing a major tactical error and adding considerably to the already tense situation, the marshal served his writs in the company of the unpopular federal excise inspector for the region, General John Neville. After a series of rumors and threats, an armed mob broke into Neville’s fortified home in July 1794.”¹⁷³ Opposition was turning to insurrection. Hamilton biographer John C. Miller wrote: “Early in August 1794, a meeting of armed men was held at Braddock’s Field and preparations were made to attack Pittsburgh; the assault was averted only when the citizens, realizing that they could not withstand the attackers, marched out to join them.”¹⁷⁴ Forrest McDonald wrote: “Documentary evidence of the insurrection was placed in the hands of Associate Justice James Wilson, who supplied the necessary certification on August 4. Meanwhile, on August 2 Washington convened the cabinet in a meeting with top officers of Pennsylvania. State officials were loath to act, despite the president’s declaration that he intended to move forcibly against the rebels, and after the meeting Washington asked the cabinet members for written opinions on the most efficacious way to proceed.”¹⁷⁵

Meanwhile, Gallatin attended another protest meeting of western Pennsylvania politicians at a Pittsburgh inn. After they met with federal representatives, another meeting was held at Redstone Old Fort at which Gallatin pushed forcefully for a negotiated settlement over the opposition of rebel leader David Bradford. A secret vote approved Gallatin’s position by a 34-23 margin. Among the resolutions adopted was one that stated “in future we will consider [excise officers] unworthy of our friendship; have no intercourse with them; withdraw from them any assistance...and upon all occasions treat them to the contempt they deserve.”¹⁷⁶ At a meeting at Parkinson’s Ferry on August 14, Gallatin spoke out against radical resolutions and reactions: “What reason have we to suppose that hostile attempts will be made against our rights?” asked Gallatin. “And why therefore be prepared to resist them? Riots have taken place which may be the subject of judicial cognizance, but we are not to suppose hostility on the part of the general government; the exertions of government on the citizens in support of the laws are coercion and not hostility; it is not understood that a regular army is coming, and militia of the United States cannot be supposed hostile to the Western country.”¹⁷⁷ Gallatin prevailed in his efforts to get any resolutions postponed and the authority to negotiate with federal authorities was placed with a committee, of which Gallatin was a leader.

Amidst his more radical neighbors, Gallatin was a moderating voice at such meetings. At a meeting on August 28, Gallatin supported an agreement proposed by representative of President Washington. Historian Richard Norton Smith wrote: “Gallatin ridiculed the idea that western Pennsylvania could exist either as an independent nation or as a vassal state of Britain or Spain.”¹⁷⁸ Gallatin biographer Henry Adams wrote: “Throughout this meeting, Mr. Gallatin was in personal danger and knew it. Any irresponsible drunken frontiersman held the lives of his opponents in his hand; a word from Bradford, the old personal enemy of Gallatin, would have sent scores of bullets at his rivals. Doubtless Mr. Gallatin believed David Bradford to be an ‘empty drum,’ deficient in courage as in understanding,’ and on that belief he risked his whole venture; but it was a critical experiment, not so much for the western country, which now had little to fear from violence, but for the obnoxious leader who, by common consent, was held by friends and enemies responsible for the submission of the people to the law.”¹⁷⁹ Back in eastern Pennsylvania, administration officials were not aware of Gallatin’s efforts. Historian Jay Winik wrote: “Washington was unwilling to take his chances. He had long worried that with ‘the mere touch of a feather’ Westerners might be driven from the Union; at this stage, he fretted about that and more.”¹⁸⁰ Winik wrote: “anxious but not panicky, Washington convened a tumultuous eight-hour marathon session of his cabinet. He was by no means the last president to be in such a dilemma – assessing just when all diplomatic options had been exhausted – but he was the first. Having tried negotiation, Washington saw little alternative to his next measure, rattling his saber.”¹⁸¹ Historian Nathan Schachner wrote: “Washington viewed the spreading agitation with deep distress. He asked Hamilton for his opinion on the course of action the government should take. Hamilton responded promptly. It was an opportunity, he thought, once and for all to show the strength of the national government. Once before, the opportunity had arisen and weak-kneed councils had let it slip. He was determined this time not to let it slip again. The alleged rebels were attacking the two things dearest to his heart – the financial system he had constructed, in which the excise taxes played an integral role; and the majesty and solidity of the central government. In addition, the rioters were members of what he called the Jacobian Party – lovers of France, followers of Jefferson, setters-up of liberty poles, and despised democrats.”¹⁸² Hamilton persuaded President Washington to call out militia from Maryland, New Jersey, Pennsylvania and Virginia. “Hamilton was hungry for glory and feeling even more than usually combative that summer,” wrote historian Richard Norton Smith. “With [Secretary of War] Henry Knox away from the capital trying to save his overextended Maine investments from ruin, the secretary of the treasury was free to enact his favorite fantasy, that of the avenging man on horseback.”¹⁸³ Historian Louis M. Hacker took a more sympathetic view of Hamilton’s actions: “Risking great unpopularity, for troops were necessary, Hamilton called upon Washington to use every means possible ‘to suppress the insurrection and support the civil authority.’ The very existence of government itself was at stake. The whole Cabinet, except for [Edmund] Randolph, agreed; and Washington proceeded to call upon the governors of Pennsylvania, New Jersey, Maryland, and Virginia for militia.”¹⁸⁴

Hamilton saw the potential to set a model for a strong national government. Biographer Forrest McDonald wrote: “Hamilton thought it would be fruitless to send commissioners to treat with the rebels until the militia force was assembled, but his opinion was not shared by the others, and Bradford set out immediately.”¹⁸⁵ Flexner wrote: “On September 24, Washington’s commissioners reported that, in their opinion, the majority of the citizens in western Pennsylvania were in favor of submission, but that they were intimidated by a violent minority. In any case, there was no possibility of enforcing the law without extrajudicial help.”¹⁸⁶ Peace commissioners and peace advocates like Gallatin nevertheless effectively had ended the crisis before the army arrived. Despite the evaporation of the rebellion, Hamilton ordered the militia forward through the autumn rains to its destination – where they searched in vain for rebels. Hamilton biographer John C. Miller wrote: “Hamiltonian ‘energy’ was seldom mere action: usually it was accompanied by a vigorous effort to win the support of public opinion – sometimes, however, after the event. In this instance, Hamilton published in the newspaper, under the signature ‘An American,’ a defense of the government’s policies; and he drew up a report, likewise printed in the newspapers, recounting the efforts of the government to settle the dispute by peaceful means.”¹⁸⁷

Treasury Secretary Hamilton very much wanted to stamp out this rebellion – which was already fading away under Gallatin’s guidance after just six weeks – and then stamp on its leaders Historian James Roger Sharp wrote: “The apparent institutionalization of violence as a mode of opposing the tax and the government’s inability to collect the excise, not just in Pennsylvania but in Kentucky and the Carolinas as well, convinced Hamilton that a strong federal response was needed, and he recommended to the president that ‘vigorous and decisive measures’ be taken to convince the ‘well disposed part of the community’ that the executive was not ‘wanting in decision and vigor.’” Sharp wrote: “Hamilton’s enthusiasm for the coercive action was scarcely contained. The show of strength and will by the federal government, he believed, would ultimately mean ‘that the insurrection will do us a great deal of good and add to the solidity of every thing in this country.”¹⁸⁸ Schachner wrote that “Hamilton was not too anxious for a peaceful settlement of the alleged ‘rebellion.’ Here was the chance to test the strength of the nation, as opposed to the respective states, and he would not willingly let the chance slip.”¹⁸⁹

Hamilton had acted in effect as secretary of war during the crisis. Secretary of War Henry Knox was pursuing speculative interests in Maine so the road to military leadership was open to Hamilton. Biographer Forrest McDonald wrote: “The expedition had precisely the effect that Hamilton had hoped for and expected. In the face of the federal government’s awesome display of strength and will, the insurrection vanished. Not a shot was fired in anger, yet two thousand rebels fled the area.”¹⁹⁰ Hamilton wanted more than flight. Hamilton biographer John C. Miller wrote: “In part, the army was composed of gentlemen volunteers, ‘high-toned Federalists’ to a man, in whose eyes the insurgents merited hanging without the formality of a trial. To make matters worse for any Westerners so unfortunate as to fall into their hands, they were inclined to regard anyone who drank whisky as an insurgent. One corps of Philadelphia gentlemen drew up a list of suspected rebels whom they proposed to put to death, and on the march to Carlisle two citizens were killed by the army. But Hamilton and Washington, after they joined the army, put an end to such acts of violence: ‘It is a very precious and important idea,’ the Secretary said, ‘that those who are called out in support & defence of the laws should not give occasion or even pretext to impute to them infractions of the laws.’”¹⁹¹

Hamilton had accompanied the march of militia which President Washington had assembled to put down the rebellion. He felt it was his duty, writing Washington, “In a government like ours, it cannot but have a good effect for the person who is understood to be the adviser or proposer of a measure, which involves danger to his fellow citizens to partake in that danger; while not to do it might have a bad effect. I therefore request your permission for the purpose.”¹⁹² Critics saw less laudable reasons for the glory-hungry Hamilton to accompany the army. “By some it is whispered that he is with the army without invitation and by many it is shrewdly suspected his conduct is a first step towards a deep laid scheme, not for the promotion of the country’s prosperity, but the advancement of his private interests,” wrote Philadelphia newspaper editor Benjamin Franklin Bache, a Jeffersonian sympathizer.¹⁹³

By the time the federal soldiers arrived in western Pennsylvania in November, open rebellion had dissipated, but Hamilton sought to identify, arrest and punish its ringleaders. One of those about whom Hamilton sought specific information was a man he called a “Swiss incendiary.”¹⁹⁴ Biographer Henry Adams noted that “the feeling of the army ran highest against the last offending parties. Mr. Gallatin was one of the most obnoxious on the ground that he had been a prominent leader of opposition to the excise law and responsible for the violence resulting from that opposition. In this there was nothing surprising; Gallatin was unknown to the great mass of the troops, and the victorious party in politics cannot be expected to do entire justice to its opponents.”¹⁹⁵ Unhappily for the Treasury secretary, because Gallatin had acted to resolve the dispute, there was nothing with which to charge the western Pennsylvania politician. Gallatin was not among those arrested, but his reelection to the Assembly and his election to Congress that fall were challenged because his section of Pennsylvania was supposedly still in a state of insurrection. Gallatin challenged that notion but offered to resign if new elections were immediately held for the Western Pennsylvania representatives in question. Unfortunately for the Federalists, the controversy only succeeded in increasing Gallatin’s visibility and popularity.

Hamilton’s zeal contributed to Gallatin’s notoriety and growing political credibility. Hamilton biographer John C. Miller wrote: “Hamilton had hoped to capture ‘a sufficient number of proper persons for examples,’ but of the 150 men brought in by the army few could qualify for this distinction. In obedience to Washington’s orders, the army remained in strict subordination to the civil authorities. Suspects were not hailed before a military tribunal and no man was condemned without due process of law. Nevertheless, under the common-law right enjoyed by every citizen to seize a traitor, Hamilton sent out scouting parties to round up suspects, who, in some cases, were brought before him for preliminary examination. While he did not succeed in ferreting out many traitors by these methods, his ‘inquisitorial’ activities provided his political enemies with a rich vein of propaganda.”¹⁹⁶

Hamilton’s antagonism to Gallatin had inadvertently helped make him into a rising Republican star. “Gallatin’s effort on behalf of his neighbors were rewarded when they elected him on October 14, 1794, their representative to both the state Assembly and the national Congress,” wrote biographer L.B. Kuppenheimer. Gallatin wrote his wife in early December: “You want me to leave politics, but I guess I need not take much pains to attain that object, for politics seem disposed to leave me. A very serious attempt is made to deprive me of my seat in next Congress. The intention is to try to induce the Legislature of this State either to vacate the seats of the members for the counties of Alleghany and Washington, or to pass a law to declare the whole election both for Congress and Assembly in that district to be null and void, and to appoint another day for holding the same. If they fail in that they will pursue the thing before Congress. A petition was accordingly presented to the Legislature last Friday, signed by thirty-four persons, calling themselves peaceable inhabitants of Washington County, and requesting the Assembly to declare the district to have been in a state of insurrection at the time of the election, and to vacate the same.”¹⁹⁷

Gallatin’s mediation in the Whiskey Rebellion “made him a marked man by the Federalists,” wrote Gallatin biographer L. B. Kuppenheimer. “Once again, they tried to have his election overturned, this time for having participated in what they argued was an insurrection. Although the Assembly voided the election of October 14, Gallatin and all but one of the expelled westerners were reelected in a special election held February 4, 1795. On December 7, 1795, Gallatin took his seat in the Fourth Congress of the United States without further trouble.”¹⁹⁸ Roger G. Kennedy noted: “Gallatin was so closely linked to the Whiskey Rebellion in western Pennsylvania that, as late as 1813, after his own reconciliation with Jefferson, John Adams persisted in calling the rebellion ‘Gallatin’s Insurrection,’ and Uriah Tracy of Connecticut rose in Congress to remind his colleagues that Gallatin’s Revolutionary service had been most obscure and that in peace he had been all to free with French-accented criticism of George Washington the President.”¹⁹⁹

“Gallatin’s role in the Whiskey Rebellion...revealed his activist nature as well as illustrated two other characteristics that distinguished him throughout his life: Courage to take a stand, even at the risk of hurting himself politically; and a willingness to change or modify a position if he believed that in so doing he would better serve the overarching goal of preserving liberty, regardless of the criticism it invited,” observed biographer L.B. Kuppenheimer.²⁰⁰ The incident did not reveal the best about Hamilton, who according to biographer Raymond Walters, Jr., “sneered in the New York Minerva at Gallatin’s foreign birth and circulated misleading innuendoes and outright falsehoods about his part in the Whiskey Rebellion.”²⁰¹ Of the expedition, Hamilton wrote: “A large army has cooled the courage of those madmen & the only question seems to be how to guard best against the return of the phrenzy...Twas very important there should be no mistake in the management of the affair.”²⁰² Historian Thomas K. McCraw wrote: “Gallatin always regarded the incident as an gross overreaction by the federal government. It confirmed his worst suspicions about Hamilton, whom he came to think of as a tool of wealthy Easterners unconcerned with the West.”²⁰³

Washington’s leadership before, during,v and after the crisis has been controversial. Like others, Washington understood the lessons of Shay’s Rebellion in 1786 – which had helped drive the decisions of the Constitutional Convention of 1787. Historian Forrest McDonald wrote: “Washington’s handling of the episode was skillful. The guiding principle was, as Hamilton put in another context, ‘Whenever the government appears in arms it ought to appear like a Hercules,’ for the respect it thus inspires is likely to prevent the necessity for bloodshed.”²⁰⁴ Historian Jay Winik wrote: “This historic episode was as much a defining crossroad for the United States as the Constitutional Convention, the debate over the Bill of Rights, or the election of George Washington. Hoping for the best, the Founding Fathers had left the question of America’s perpetuity to posterity; but now, with the poisonous French Revolution raging, with Republicans seething and the Federalists vengeful, with Whiskey Rebels openly flirting with armed rebellion, and with the enduring tension between the spirt of 1776 and the accommodations of 1787 that would not go away, the country could readily have veered in one direction or another.”²⁰⁵

Still, Washington was choosing sides – with Hamilton over Jefferson and the Democrat-Republican societies allied with Jefferson. “Washington’s public and private statements thus exhibited an inclination to connect indiscriminately the various modes of opposition to his administration,” wrote historian James Roger Sharp. “As such, the whiskey insurrectionists’ armed rebellion was viewed as merely a violent manifestation of the equally ‘subversive’ ideas of the Democratic-Republican societies. Even his fellow Virginian, James Madison, who had led the opposition in Congress to a number of administration proposals, did not escape suspicion. To the embattled chief executive, the whiskey rebels, the Democratic-Republican societies, as well as Madison and his Congressional allies, all by different means and degrees of intensity, seemed to be challenging the government’s authority, weakening its ability to govern, and therefore, threatening the stability of the republic.”²⁰⁶ Historian John C. Miller noted: “The President’s denunciation of the Democratic Societies produced an uproar in Congress far beyond anything either he or Hamilton had anticipated. Washington had struck dangerously near the root of freedom of speech and freedom of assembly; the Democratic Societies had contravened no existing law, and in the absence of proof that they had instigated the rebellion it appeared that they were being condemned because they had had expressed opinions offensive to the administration. Although this kind of repression was sanctioned by the example of the British government...the Republicans marshaled their forces in Congress with the intent of administering a rebuke to the President.”²⁰⁷

The whiskey insurrection took place against the background of the French Revolution and the support of many Americans for the revolution and the French. Historian Lance Banning wrote: “Serving, as he always did, on the committee to prepare the House of Representatives’ reply to Washington’s address, Madison preferred to pass silently over the president’s denunciation of the popular associations. His draft of a reply expressed the legislators’ grief ‘that any part of our fellow citizens should have shown themselves capable of an insurrection’ – the deep regret of good republicans that enemies of liberty might turn this ‘flagrant’ violation of the ‘public order’ into ‘a calumny against it’ – then hurried on to note the members’ gratification that the ‘great body’ of the people had demonstrated to the world their firm attachment to the ‘luminous and vital principle...that the will of the majority shall prevail.’ Federalists, however, were determined to employ the president’s prestige to devastate the growing opposition to their measures. (‘The game,’ said Madison, ‘was to connect the democratic societies with the odium of the insurrection – to connect the Republicans in Congress with those societies – [and] to put the President ostensibly at the head of the other party, in opposition to both.’) Therefore, even at the cost of public disagreement with the great commander, Madison resisted efforts to insert an echo of the president’s remarks into the House reply.” ²⁰⁸

Taking a strong stand against the Whiskey Rebellion – and against the Jeffersonian sympathizers with the French Revolution, Washington had clearly broken with Jefferson and Madison. Hamilton biographer Forrest McDonald wrote: “For more than three years Washington had attempted to steer an intermediate course between the positions held by Jefferson and Hamilton, and the effort had rendered the administration virtually impotent. When he embraced Hamilton anew in the summer of 1794, he became genuinely Hamiltonian president – and Hamilton became, truly, the prime minister.”²⁰⁹ Hamilton, however, would remain in office only a few months longer.

Gallatin in Congress

Albert Gallatin’s elevation to Congress in 1795 was propitious for the anti-Hamilton faction aligned with Thomas Jefferson and James Madison. The Jeffersonians needed someone who could decipher the economic programs of Treasury Secretary Alexander Hamilton – who had left office ten months before Gallatin took his seat. Neither Madison nor Jefferson was up to the task. Jefferson claimed that not even Hamilton understood “their condition himself, nor was able to give a clear view of the excess of our debts beyond our credits, nor whether we were diminishing or increasing the debt.”²¹⁰ It would be fair to say that most Republicans didn’t understand much about finance and many Federalists understood almost as little about popular politics. “Gallatin is a real Treasure,” James Madison wrote to Thomas Jefferson in early 1796. “He is sound in his principles, accurate in his calculations and indefatigable in his researches.”²¹¹ Historian L.B. Kuppenheimer wrote: “To the Republicans, as antifederalists were now called, Hamilton was attempting to subvert the very basis of the Constitution: the balance of power among the executive, legislative, and judicial branches of government. There was now an urgent need for someone who had enough understanding of the financial issues involved to expose the Hamilton program for what the Republicans believed it to be, a plan to exclude the majority of the people from effectively shaping governmental policies.”²¹²

Gallatin biographer Henry Adams, whose great-grandparents despised Gallatin, wrote that Gallatin’s career “was without a parallel in our history. That a young foreigner, speaking with a foreign accent, laboring under all the odium of the western insurrection, surrounded by friendly rivals like Madison, John Nicholas, W. B. Giles, John Randolph, and Edward Livingston; confronted by opponents like Fisher Ames, Judge Sewall, Harrison Gray Otis, Roger Griswold, James A. Bayard, R. G. Harper, W. L. Smith, of South Carolina, Samuel Dana of Connecticut, and even John Marshall, – that such a man under such circumstances should have at once seized the leadership of his party, and retained it with firmer and firmer grasp down to the last moment of his service; that he should have done this by the sheer force of his ability and character, without ostentation and without the tricks of popularity; that he should have had his leadership without a dispute, and should have held it without a contest, made a curious combination of triumphs.”²¹³

Gallatin’s new role, however, actually did not come without criticism. Given the Swiss immigrant’s generally subdued nature, the vehemence of anti-Gallatin feeling that developed is surprising. Unlike Hamilton, Gallatin was never a master of invective. But as the leading, non-Federalist financial authority, he drew fiery Federalist criticism. Historian John Ferling noted: “The Federalists hated his brilliance, his foreignness, his politics, his religion. Abigail Adams was one of his most fervent detractors. Full of sulky malevolence toward this foe of her husband, she referred to him simply as ‘the Jesuit Gallatin.’”²¹⁴ But Gallatin became a magnet for criticism. And for Gallatin’s later failure to reject all of Hamilton’s program, Gallatin drew Republican criticism as well. Nevertheless, Congressman Gallatin persevered and was a whirlwind of activity (much as Alexander Hamilton was). Gallatin was not cowed in his attempt to untangle the operations of the Treasury Department. His differences with Hamilton’s program were political and philosophical, not personal. Gallatin never shared the viciousness of Jefferson’s other attack dogs inside and outside of Congress. Gallatin became the father of congressional oversight of the budget. Historian L. B. Kuppenheimer wrote: “Only ten days after being sworn in, he proposed the reactivation of the select Committee on Ways and Means as a standing or permanent committee. Though not intended as a Republican tactic to oppose the administration, Gallatin’s effort reflect his profound conviction that the only way Congress could fulfill its constitutional mandate as a check to the executive was through the exercise of its authority over the nation’s finances.”²¹⁵ It is just one of Gallatin’s reforms that has had a lasting impact on American democracy. Gallatin biographer Nicholas Dungan wrote: “Gallatin was a stickler for financial oversight and intensely uncomfortable with [Hamilton’s] system, which gave considerable leeway to the president and the secretary of the Treasury.....Gallatin...supported an appropriations system whereby monies made available to the executive branch by Congress should be designated for a specific purpose and spent only for that purpose, rather than allocated to the head of the department for general use.”²¹⁶

“As a member of Congress in 1796 he questioned Hamilton’s policy, and during Adams’s entire administration was a perpetual thorn in the sides of Hamilton’s successors in the department,” wrote Gallatin biographer John Austin Stevens.²¹⁷ Gallatin published his financial conclusions in A Sketch of the Finances of the United States in November 1796. Stevens noted: “No such exhaustive examination had been made of the state of the American finances. The one cardinal principle which he laid down was the extinguishment of debt. He severely criticised Hamilton’s methods of funding, and outlined those which he himself later applied. He charged upon Hamilton direct violations of law in the application of money, borrowed as principal, to the payment of interest on that principal.” Gallatin also criticized the spending priority and accounting methods of the Washington Administration. However, noted L.B. Kuppenheimer, “Gallatin avoided any suggestion of dishonesty or malevolent motives on the part of the Treasury or Hamilton personally.”²¹⁸

Gallatin was a firm believer in governmental accountability and transparency. Historian Alexander Balinky wrote: “one of the positive reforms that Gallatin...initiated was the introduction of an annual report to be submitted to Congress by the Secretary of the Treasury. The first such document was the ‘State of Finances’ report dated December 18, 1801, which blueprinted the financial policy to be followed in 1802 and subsequent years of Republican administration. Jefferson, who had made a plea for clarity in the financial statements, should have been particularly pleased with this first report, for with painstaking care Gallatin had conformed to all the specifications laid down by Jefferson.”²¹⁹

Gallatin’s fairness was a hallmark of his public life. Nevertheless, noted historian Thomas K. McCraw, “A strong moral tone runs through Gallatin’s Sketch. He presents in full particulars the orthodox Republican conviction that a national debt has no legitimacy and that it produces endless mischief: corruption of public morals, an excessive military establishment, and a financial class favored by the government – in short, the same British system that had caused the colonists to revolt in the first place.”²²⁰ Gallatin’s animosity to Hamilton was ideological, not personal, but part of it stemmed from Hamilton’s relationship with Gallatin’s father-in-law, James Nicholson of New York City. Historian Holly Cowan Shulman noted: “By the early 1790s the Nicholson house was headquarters to the emerging Republican Party as it coalesced around its opposition to Alexander Hamilton. Politicians and writers such as Aaron Burr, George Clinton, and Thomas Paine graced their parlor.”²²¹

Gallatin was relieved when a dispute between Hamilton and Gallatin’s own father-in-law was resolved without a duel in 1795, but Gallatin shed no tears when Hamilton himself was killed in a duel with Aaron Burr nearly a decade later. The immediate cause of the 1795 dispute between Hamilton and Commodore Joseph Nicholson was a clash in New York City between demonstrations for and against the controversial Jay Treaty with Great Britain – to which Gallatin had led congressional opposition and Hamilton was the leading defender outside the Washington Administration. According to Hamilton biographer Richard Brookhiser: “Nicholson had been the commander of the Hamilton [float] in the parade celebrating the Constitution seven years earlier. Since then, his politics had changed (he had also become Albert Gallatin’s father-in-law) Nicholson had been spreading a ru mor that Hamilton had skimmed 100,000 pounds of government money while he was treasury secretary and stuck it in a British bank. Nicholson and one of Hamilton’s companions fell to quarreling. Hamilton tried to calm them, whereupon Nicholson turned on him, calling him an ‘abettor of Tories’ and accusing him of backing out of a duel.”²²²

“Hamilton tried to herd the feuding men indoors,” wrote Hamilton biographer Chernow. “Nicholson then said that he didn’t need to listen to Hamilton and accused him of having once evaded a duel. These were incendiary words for any gentleman. ‘No man could affirm that with truth,’ Hamilton retorted, and he ‘pledged himself to convince Mr. Nicholson of his mistake’ by calling him to a duel at a more suitable time and place.’”²²³ In the subsequent exchange of insults and challenges, Hamilton wrote Nicholson: “The unprovoked rudeness and insult which I experienced from you on Saturday leaves me no option but that of a meeting with you, the object of which you will readily understand.”²²⁴ Eventually, intermediaries extracted an apology from Nicholson that terminated the affair. In the aftermath, Gallatin wrote his wife a letter which suggested that his own reputation had been part of the reason for the quarrel:

I would not heretofore write to you on the subject of the dispute between your father and Hamilton, as I knew you were not acquainted with it. I feel indeed exceedingly happy that it has terminated so, but I beg of you not to express your sentiments of the treatment I have received with as much warmth as you usually do, for it may tend to inflame the passions of your friends and lead to consequences you would forever regret. It has indeed required all my coolness and temper, and I might perhaps add, all my love for you, not to involve myself in some quarrel with that gentleman or some other of that description; but, however sure you may be that I will not myself, others may, so that I trust that my good girl will be more cautious hereafter....”²²⁵

The threat of war with France in 1797 following the XYZ affair and then passage of the Alien and Sedition Acts of 1798 presented another arena for conflict around Gallatin. Historian Claude Bowers wrote: “Many thought, when the Alien Bill was introduced, that it was aimed at Gallatin, and it was boasted in the coffee-houses of New York that it would soon be easy to ‘ship him off.’ Terrorized by the threat of the measure, many harmless Frenchmen, including [the Comte de] Volney, hastily chartered a ship and sailed away, but when a little later some emigrant French royalists came knocking at the door they were admitted. Jefferson thought the bill ‘detestable,’ and Madison, ‘a monster that will disgrace its parents.’”²²⁶ Writing of the threat of war and the necessity to mobilize military resources, Henry Adams observed: “Mr Hamilton had not calculated on this emergency; his system had rested on the assumption that the old situation was to be permanent. The question was forced upon the country whether it should increase its debt or neglect its defences.

“Here was the point where the theories of Mr. Hamilton and of Mr. Gallatin sharply diverged. The Federalists in a body demanded an army and navy, with an indefinite increase of debt. Mr. Gallatin and his party demanded that both army and navy should be postponed until they could be created without increase of debt.”²²⁷

Gallatin proved to be the Republicans’ foremost theorist in the House. Jefferson biographer Claude G. Bowers wrote: “He was primarily a democrat and an opponent of strong government. Fascinated by the work of the Constitutional Convention, he thought the Executive had been given too much power. But he was opposed to tinkering with constitutions once adopted. As a member of the convention to revise the Constitution of Pennsylvania, he worked as earnestly as had Madison in the greater convention, fighting with moderation, but persistence for a popular government, for the freedom of the press, and popular suffrage.²²⁸

“During the debates on the Jay Treaty in March of 1796, it was Gallatin who challenged the Federalist assumption that only the Senate and the executive were empowered to make treaties. Gallatin argued that the House of Representatives was not bound to vote appropriations for treaties made by the executive and the Senate.”²²⁹ Congressman Gallatin was a firm opponent of the Jay Treaty which prompted the dispute between his father-in-law and Hamilton. Gallatin himself wrote in an uncustomary bit of ego: “The first great debate in which we were engaged was that on the British treaty; and my speech, or rather two speeches, on the constitutional powers of the House...were...universally considered as the best on either side.”²³⁰ Henry Adams wrote: “The debate began on March 7, 1796, and on the 10th Mr. Gallatin spoke, attacking the constitutional doctrine of the Federalists and laying down his own. He claimed for the House, not a power to make treaties, but a check upon the treaty-making power when clashing with the special powers expressly vetoed in Congress by the Constitution; he showed the existence of this check in the British constitution, and he showed its necessity in our own, for, ‘if the treaty-making power is not limited by existing laws, or if it repeals the laws that clash with it, or if the Legislature is obliged to repeal the laws so clashing, then the legislative power in fact resides in the President and Senate, and they can, by employing an Indian tribe, pass any law under the color of treaty.”²³¹ Gallatin argued that the House had a role in treaties because the Constitution “expressly and exclusively vested in Congress the power of raising, granting, and directing the application of money.” ²³²

Encouraged by President Washington, Alexander Hamilton emerged at the prime champion of the Jay Treaty. John C. Hamilton, his son and biographer, wrote: “Hamilton was still the centre of controversy. The number, the violence, the bitterness of the attacks upon him give abundant evidence of his position. Though retired from the Cabinet, still his spirit was believed to animate its counsels; and the cry which had been raised against him as the adviser of the Proclamation of Neutrality was renewed. ‘Delenda est Carthago.’"²³³ Eventually, the appropriation for the Jay Treaty passed the House by the barest of margins, 51-48. Henry Adams concluded: “Perhaps the only individual in any branch of the government who was immediately and greatly benefited by the British treaty was Mr. Gallatin; he had by common consent distinguished himself in debate and in counsel; bolder and more active than Mr. Madison, he was followed by his party with instinctive confidence; henceforth his leadership was recognized by the entire country.”²³⁴

Gallatin was filling a large vacuum in Jeffersonian ranks. Both Jefferson and Madison had retired to Virginia. Biographer Henry Adams wrote that Gallatin’s “good fortune threw him into public life at a time when both parties believed that principles were at stake, and when the struggle between those who would bar the progress of democracy and those who led that progress allowed little latitude for doubt on either side in regard to the necessity of their acts. While this condition of things lasted, and it lasted throughout Mr. Gallatin’s stormy Congressional career, he was an ideal party leader, uniting boldness with caution, good temper with earnestness, exact modes of thought with laborious investigation, to a degree that has no parallel in American experience.” After the Jay Treaty, Gallatin concentrated his attentions on the nation’s finances. Henry Adams wrote that Gallatin “confined himself closely to finance, and, although taking a very considerable share in debate, he avoided as much as possible the discussion of foreign affairs. His most strenuous efforts were devoted to cutting down the estimates, preventing an increase, and, if possible, diminishing the force of the army and navy, and insisting upon the rule of specific appropriations.” Gallatin forced the Treasury Department to abandon its policy of general appropriations – another in the major financial reforms he effected.

Gallatin’s last major act as member of Congress in 1801 was to engineer the presidential election in the House of Thomas Jefferson. Both Hamilton and Gallatin played important roles in that presidential election – which Hamilton had skewed in October 1800 with a bizarre personal attack on President John Adams. Unlike Hamilton, who was a consistent political foe of Burr, Gallatin and his father-in-law maintained good personal and political relations with Burr, who had strained relations with Virginia Republicans like Jefferson and Madison. Biographer Henry Adams observed that Gallatin “never expressed any opinion about Colonel Burr. Yet he knew that the Virginians distrusted Burr, and even in his own family, where Colonel Burr was probably warmly admired, there were moments when their faith was shaken.”²³⁵

In the election stalemate with Jefferson in 1801, Burr evidently tried to recruit Gallatin to his side as a runoff election in the House of Representatives approached, noted biographer Nathan Schachner: “On January 16, 1801, Burr wrote in congratulatory vein to Albert Gallatin, whom he knew to be the leader of the Jeffersonian forces in Congress. ‘I am heartily glad of your arrival at your post. You were never more wanted, for it was absolutely vacant.’ As for the question that was agitating the nation at the time,’ Livingston will tell you my sentiments on the proposed usurpation, and indeed of all the other occurrences and projects of the day.’”²³⁶ Gallatin was under a lot of pressure to relieve the deadlock between pro-Jefferson Republicans and pro-Burr Federalists. “The election belonged to the House of Representatives where not Mr. Jefferson but Mr. Gallatin was leader of the party and directed the strategy,” Henry Adams said of Gallatin’s role in the election of Jefferson over Burr. “He marshalled the forces; he fought the battle; he made the plans, and in making them did not even consult Mr. Jefferson, but simply obtained his assent to what had already received the assent of his followers in the House.”²³⁷ It was a rare occasion on which Gallatin and Hamilton were on the same side of a political issue. Gallatin biographer Frank Ewing noted: “A lengthy memorandum preserved among Gallatin’s papers, which he submitted to Jefferson, shows the thoroughness with which he prepared for every emergency.”²³⁸ That thoroughness and Gallatin’s trademark patience paid off with the switch of just enough votes to secure Jefferson’s election.

Relations between President Jefferson and Vice President Burr were effectively broken. “Be the merits of the ultimate rupture between Jefferson and Burr what they may, the position of Mr. Gallatin is clear enough,” wrote Henry Adams. “He did not want that rupture. He had no affection for the great New York families which were the alternative to Burr; he regretted that deep-set distrust of the Vice-President which had always existed among the Virginians; his own relations with Burr and his friends were never otherwise than agreeable, and he could have no motive for expelling them from the party and driving them to desperation.”²³⁹ Gallatin continued his close friendship with Aaron Burr. Historian Roger G. Kennedy noted that in 1804 “when Gallatin heard of the duel with Hamilton, he called it a ‘catastrophe,’ not so much because Hamilton was a loss, or because the means by which he was lost were deplorable; ‘the duel, for a duel, was certainly fair.’ His regret was that Burr had not anticipated the reaction.”²⁴⁰

Gallatin as Secretary of the Treasury

Albert Gallatin’s 1801 nomination as secretary of the Treasury was a foregone conclusion as far as President-elect Jefferson was concerned. Gallatin’s confirmation by the Senate, still controlled by Federalists after the election, was not. “To them Mr. Gallatin was more obnoxious than any other of the Republican leaders,” wrote biographer John Austin Stevens.²⁴¹ Jefferson told a friend after the 1800 election that Gallatin was “the only man in the United States who understands through all the laberinths that Hamilton involv’d it, the precise state of the Treasury, and the resources of the country.”²⁴² Madison biographer Irving Brant wrote: “To avoid the certain rejection of Gallatin [by the Senate], Jefferson withheld his name in order to let him settle into the Treasury through a recess appointment. Robert Smith of Maryland accepted the Navy post after it was refused by three others, including his brother Samuel.”²⁴³ Gallatin understood the Senate’s opposition; he wrote his wife shortly after President-elect Jefferson informed him of his nomination for the Cabinet that “only one [of the Cabinet nominations] which I think will be rejected, is that of a certain friend of yours. That he should be fixed at the seat of government and should hold one of the great offices is pressed on him in such manner and considered as so extremely important by several of our friends, that he will do whatever is ordered. But I will not be sorry nor hurt in my feelings if his nomination should be rejected...”²⁴⁴ On May 14, Gallatin was sworn into office – after the Senate was safely out of session. Only on January 26, 1802, Gallatin was finally confirmed by the now Jeffersonian-controlled Senate.

“Jefferson had suffered from Hamilton’s conception of the role of the Treasury, and it might be supposed that he would have taken care to instruct Gallatin on the etiquette of interdepartmental relations. There is no record that he did so; and Gallatin promptly resumed the role that Hamilton had played. He was the fiscal and administrative architect of Jefferson’s administration, ”wrote historian Leonard D. White.²⁴⁵ “While Hamilton stood in much the same relation to Washington as Gallatin did to Jefferson, there were certain differences,” wrote Gallatin biographer Frank Ewing. “Jefferson was more active than Washington in planning and directing his administration, and he had the strong influence of Madison to assist him. Washington had no such confidential adviser. His great effort, at least during his first term, had been to restore unity and harmonize the contending factions.”²⁴⁶ In effect, Washington had to serve as an honest broker between his strong-willed subordinates. Although he clashed with Navy Secretary Smith, Gallatin had no effective rival such as Hamilton had in Jefferson.

Like Hamilton, Gallatin’s diplomatic ambitions were eventually blocked, albeit less permanently. The situation was created in part by Gallatin’s deep prejudice against most governmental expenditures – especially those that prepared for war and especially those that encouraged a strong navy. President Jefferson’s instincts coincided with Gallatin’s and clashed with those of Secretary of the Navy Robert Smith. As he tried to block naval expenditures in 1805, Gallatin wrote Jefferson: “I have, for the sake of preserving personal harmony in your councils, however grating to my feelings, been almost uniformly silent; and I beg that will ascribe what I now say to a sense of duty and to the grateful attachment I feel for you.”²⁴⁷

Gallatin spent most of his governmental service seeking to achieve the goal that he and Jefferson fervently sought – paying off the national debt. Historian Alexander Balinky wrote: “Gallatin’s position on the debt led him to tie almost the whole of his fiscal system (the allocation of revenue and the nature of permissible expenditures) to the realization of a single financial objective: the speedy reduction and final extinction of the public debt. And it was the very narrowness of that singular objective that prevented Gallatin from devising a fiscal system which could have served the financial needs of the government under a variety of economic and political circumstances.”²⁴⁸

By the end of Jefferson’s second term, Gallatin had tired of his duties at the Treasury. He yearned to be named Secretary of State by James Madison in 1809 and Madison too wanted to appoint him to that post. “There was only one man Madison must have in his cabinet, and he was not permitted to put him where he wanted him,” noted Madison biographer Garry Wills.²⁴⁹ Historian Harry Ammon noted that Gallatin “had never been popular with the Southern Republicans, who contemptuously referred to him as the foreigner responsible for perpetuating Hamiltonian fiscal policies.”²⁵⁰ The President was blocked by Gallatin’s political opponents including William Branch Giles of Virginia and Samuel Smith of Maryland. Some opponents used Gallatin’s foreign birth against him; his loyalty to the Republic again was questioned. The Smith brothers and their allies in the Senate united against him. When Madison suggested that the weak and incompetent Robert Smith be appointed Secretary of Treasury and Gallatin to State, Gallatin rejected the maneuver – fearing that he would have to do both jobs because Smith was so incompetent. After Giles compiled a bill of particulars against Gallatin’s appointment for Madison, the President decided not to fight for Senate confirmation and kept Gallatin on at Treasury. One Gallatin friend, Wilson Cary Nicholas, wrote: “The objection to him that I understood had the most weight, and that was most pressed in conversation, was that he was a foreigner. I thought it was too late to make that objection. He had for eight years been in an office of equal dignity and of greater trust and importance.”²⁵¹

The effect of the appointment of Smith as secretary of State and the recognition of the power of Madison’s Senate adversaries, according to Henry Adams “was to place in the Department of State, at a most critical period of foreign affairs and against the will of the President, a person incompetent, to the exclusion of a man eminently qualified for the office. Had Mr. Gallatin been then appointed Secretary of State, it is highly probable that the war with Great Britain would not have taken place.” Adams wrote that Congress “rejected both embargo and war, and had in complete helplessness fallen back on a system of non-intercourse which had most of the evils of embargo, much of the expense of war, and all the practical disgrace of submission. [Gallatin] could do nothing else than make the best of this also. The country had lost its headway and was thoroughly at the mercy of events.”²⁵² Gallatin was inclined to quit government entirely, but the influence of Madison and Jefferson as well as his own sense of duty kept him at his post.

Though Gallatin failed to get the post of secretary of state, he had more influence on foreign policy than did Secretary of State Smith, who took umbrage at his marginalization. Still, Gallatin’s ego was offended by the unfairness of the situation. Gallatin had a confrontation with Madison and Jefferson at Monticello in August 1809. After the meeting, Gallatin wrote Jefferson: “I cannot, my dear sir, consent to act the part of a mere financier, to become a contriver of taxes, a dealer of loans, a seeker of resources for the purpose of supporting useless baubles, of increasing the number of idle and dissipated members of the community, of fattening contractors, pursers, and agents, and of introducing in all its ramifications that system of patronage, corruption and rottenness which you so justly execrate. I thought I owed it to candor and friendship to communicate as I did to Mr. Madison and to yourself my fears of a tendency in that direction, arising from the quarter and causes which I pointed out, and the effect such a result must have on my conduct.”²⁵³

“This was a situation that could only deteriorate, until Gallatin at length forced a resolution on Madison by making it clear that he must choose – either Smith must go or he would. Smith went, but only after two years had been wasted trying to work an unworkable arrangement,” wrote historian Garry Wills.²⁵⁴ But first Madison had to patch up a quarrel with his Virginia neighbor, James Monroe, who had been offended when he was boxed out of the presidency by Jefferson and Madison in 1808. In the wake of the congressional defeat of the Bank of the United States in 1811, Gallatin realized that his political utility in Washington had been exhausted. Historian Allen Johnson wrote: “It seemed the Secretary of Treasury, smarting under the defeat of his bank bill, that he become a burden to the Administration, an obstacle in the way of cordial cooperation between the branches of the Federal Government. The factions which had defeated his appointment to the Department of State seemed bent upon discrediting him and his policies. ‘I clearly perceive,’ he wrote to the President, ‘that my continuing member of the present Administration is no longer any public utility, invigorates the opposition against yourself, and must necessarily be attended with an increased loss of reputation by myself. Under those impressions, not without reluctance, and after perhaps hesitating too long in the hopes of a favorable change, I beg leave to tender you my resignation.’”²⁵⁵

Gallatin wrote out his resignation in March 1811: “Measures of vital importance have been and are defeated; every operation, even of the most simple and ordinary nature, is prevented or impeded; the embarrassments of government, great as from foreign causes they already are, are unnecessarily increased; public confidence in the public councils and in the Executive is impaired, and every day seems to increase every one of those evils. Such state of things cannot last; a radical and speedy remedy has become absolutely necessary.”²⁵⁶ Shortly thereafter, Madison replaced Secretary of State Robert Smith with James Monroe. Although the Administration stabilized, relations with England continued to deteriorate and war ensued. Gallatin prepared the finances of the country for that eventuality.

As broadly experienced in public policy as were Washington and Jefferson, neither man was versed in public finance. They relied Hamilton and Gallatin, respectively. Jefferson biographer Dumas Malone wrote: “Jefferson was capable of being his own secretary of state but not of being his own secretary of the treasury.”²⁵⁷ Gallatin’s course in office was very deliberate. In contrast to Gallatin, Hamilton had been in a hurry. Stanley Elkins & Eric McKitrick wrote that Hamilton repeatedly evidenced “an impulsive impatience which was forever verging on the indiscreet.”²⁵⁸ Hamilton’s ambition was fueled by his adolescent work for an import-export company in the West Indies. In the absence of the firm’s owners, young Hamilton took charge – collecting debts and delivering lectures to clients. Gallatin lacked Hamilton’s driving ambition and was not necessarily enthusiastic about the new job as Treasury secretary. He wrote his in-laws: “As a political situation, the place of secretary of the treasury is doubtless more eligible and congenial to my habits; but it is more laborious and responsible than any other, and the same industry which will be necessary to fulfill its duties, applied to another object, would at the end of two years have left me in the possession of a profession which I might have exercised either in Philadelphia or New York. But our plans are liable to uncertainty, and I must now cheerfully undertake that which had never been the object of my ambition or wishes.”²⁵⁹

“Gallatin himself was a man of the highest respectability.” noted Jefferson biographer Dumas Malone. “Forty years old at the time of his appointment, he was the youngest of this group and was to prove the most industrious. His were the tasks requiring the most assiduous attention.”²⁶⁰ Like Hamilton, Gallatin applied himself diligently to the task at hand. Years later, Gallatin wrote: “To fill that office in the manner I did, and as it ought to be filled, is a most laborious task and labor of the most tedious kind. To fit myself for it, to be able to understand thoroughly, to embrace and control all its details, took from me, during the two first years I held it, every hour of the day and many of the night and had nearly brought on a pulmonary complaint. I filled the office twelve years and was fairly worn out.”²⁶¹ Gallatin was ever the realist and usually the workaholic. Early in his administration, Gallatin wrote Jefferson: “It will take me twelve months before I can thoroughly understand every detail of all these several offices. Current business and the more general and important duties of the office do not permit me to learn the lesser detail, but incidentally and by degrees. Until I know them all I dare not touch the machine.”²⁶²

The government was still controlled by Federalist appointees, most of whom were in the Treasury Department; the Madison administration was divided on how quickly to make changes. The first reality was that to reduce the budget and the debt the incoming administration needed to reduce its personnel. For example, the Treasury’s collectors of internal revenue, who numbered 500 in 1801, had their jobs abolished in 1802. The second question was whether Jeffersonians should replace Federalist appointees. Historian Alexander Balinky wrote that “on the subject of appointments and dismissals of treasury personnel, Gallatin took a very principled and cautious position. Talent and integrity, he said, should be the only qualifications for office. There was little enthusiasm on his part for Jefferson’s attempts to justify the principle and regulate the proportion of removals. Gallatin would have removed officers of the Treasury only for cause, chief among which was a charge of electioneering.”²⁶³ Madison biographer Ralph Ketcham wrote: “Gallatin drafted a circular letter to Treasury Department officers, insisting that they and their appointees stay out of politics and that the ‘door of office be no longer shut against any man merely on account of his political opinions.’ In sending the draft to Jefferson, Gallatin observed further that ‘talent and integrity are to be the only qualifications for office,’ and that ‘an electioneering collector is commonly a bad officer as related to his official duties.’ Jefferson replied that ‘Mr. Madison happened to be with me when I opened your circular,’ and that, ‘restrained by some particular considerations,’ he and Madison thought Gallatin should withhold the circular until ‘equilibrium’ forecast in the New Haven letter had been achieved. Regretfully Gallatin desisted, and apparently never did send the circular, because three years later, responding to a suggestion from Jefferson that federal officers be ordered not to meddle in elections, Gallatin observed smugly that he had always favored such a policy but had set it aside because...you, as well as Mr. Madison, thought [it] premature.’”²⁶⁴ Jefferson sent an ambiguous message regarding a controversial appointee in New Haven that opened the floodgates of Democratic-Republican ambitions. Although a strong partisan, Gallatin nevertheless remained a strong opponent to instituting a spoils systems and resisted changes in appointees without cause. That led to a patronage fight with William Duane, editor of the Philadelphia Aurora, a Democrat-Republican who launched an editorial vendetta against Gallatin. Historian Dumas Malone wrote: “Early in the autumn of this first year a hostile paper paid him a left-handed compliment by that that, where [Gallatin] had been formerly accused of doing his utmost to ‘stop the wheels of government,’ he now appeared to be the only one of the new rulers who was keeping them going, since he alone was in Washington.”²⁶⁵ In that respect, Gallatin followed the example of Hamilton, who stayed in Philadelphia, even while Washington and Jefferson went to their Virginia homes. (William Duane was a perennial thorn in Gallatin’s side.)

“The mass of details to be studied and of operation to be learned or watched completely weighed him down,” wrote Henry Adams, “and caused him ever to look back upon this year as the most laborious of his life.”²⁶⁶ With the exception of brief excursions to New York in August and September to visit his in-laws, Gallatin remained at his post in Washington that first summer – when most other Administration officials had fled the humidity of August along the Potomac River. “The consequence was that through the summers of Jefferson’s and Madison’s administration, he was often the only important officer in the city and hence the acting head of the government,” noted biographer Raymond Walters, Jr.. “He had expected the job to be demanding and at the outset it lived up to his anticipations. Conscientiously he set out to master the routine day-to-day operations of the Treasury Department, and then to develop and put into effect a fiscal program that would embody his financial philosophy, all the while performing the hundreds of acts expected of him as Secretary of the Treasury. There was always a fearful number of letters to write. During the next two years, he found that all this demanded ‘close attention’ at least eight hours of the day and frequently additional hours of the night. Often, to escape the interruptions to which he was subject in his office, he worked at home.”²⁶⁷ Often, he did so alone because his family deserted him to visit Gallatin’s in-laws in New York (just as Hamilton’s father had often left to visit the Schuyler family in upstate New York). But when Congress was in session, Gallatin was seldom alone because of his home’s proximity to the Capitol. By renting a house near the Capitol, Secretary of the Treasury Gallatin made his home a natural destination for Republican members of Congress – although he annoyed President Jefferson who would have preferred Gallatin to live closer to the White House and would have liked him to dine there regularly. "The city is rather sickly, my family has their share, and they are extremely anxious on that account to move on Capitol hill," wrote the Treasury secretary to the president. Gallatin refused to put his family’s health at risk by living closer to the city’s swamps along the Potomac River.²⁶⁸

Treasury Secretary Gallatin was “a man of large and active mind, and his Department was charged with interests that were by no means exclusively financial,” noted Henry Adams.²⁶⁹ Gallatin, for example, acted as the Administration’s point person for Congress. Historian Forrest McDonald wrote: “Gallatin knew and was on friendly terms with most Republican congressmen, having served for some time as their floor leader, and he could work informally with them on proposed legislation without violating their sensibilities in regard to executive encroachment. That made it possible for the president to have an effective voice in making legislative policy, and yet avoid Hamiltonian trappings of a monarchical-ministerial system.”²⁷⁰ Gallatin maintained good relations with John Randolph, the imperious head of the House Ways and Means Committee who often criticized other Jefferson Administration officials. Biographer Henry Adams noted: “The principal adherents of the Administration in Congress were always on terms of intimacy in Mr. Gallatin’s house, and much of the confidential communication between Mr. Jefferson and his party in the Legislature passed through this channel.”²⁷¹ Indeed, according to Jefferson biographer Dumas Malone, “Gallatin did more than any other member of the administration except the President himself to bridge the gap between the executive and legislative branches.”²⁷² Gallatin worked closely with House Ways & Means Chairman Randolph, until Randolph’s erratic behavior and opposition to Jefferson administration policies made it almost impossible to do so.

“Mr. Gallatin incorporated in his annual report a balance sheet in accordance with the ordinary forms of book-keeping familiar to every accountant and indispensable in every business establishment, and such as is presented to the public in the monthly and annual statements of the Treasury Department at this day,” wrote biographer John Austin Stevens.²⁷³ Historian Forrest McDonald added: “The Federalists, for all their cavalier manners, proved not to have been throwing money around needlessly, and though irregularities had been common, actual peculation or other wrongdoing had been almost nonexistent. Thus, despite his zeal and precisely methodical administration, Gallatin was unable to make any appreciable dent in civilian expenditures.”²⁷⁴ Historian Gordon S. Wood wrote: “Republicanizing the banking system may have become important to Jefferson, but shrinking the debt was far more crucial: it went to the heart of the Republicans’ conception of government.”²⁷⁵ Reducing the debt was something that Jefferson could tackle; the bank’s charter had another decade to run. Historian Thomas K. McCraw wrote that to achieve Jefferson’s goal of eliminating the national debt, “he and Gallatin emphasized three policies: reduce both taxes and spending, impose tighter control over specific appropriations, and thwart the growth of a standing army and a strong navy. They sought to avoid what they regarded as grievous flaws in the British and European traditions: monarchy, luxury, rigid class structures, financial corruption, military adventurism, and a heavy tax burden. Understandably but in large part inaccurately, they equated Hamilton’s fiscal program and the Federalist philosophy of government with the British and Continental systems.”²⁷⁶

Financial reform was a key part of President Jefferson’s program. “When members of Congress in December, 1801, turned their attention from the form of Jefferson’s message to its content, they found an agenda for legislative action. The president recommended the repeal of all internal taxes and reductions in the army, the navy, and the civil establishment,” wrote Jefferson biographer Noble E. Cunningham, Jr.. “In the course of the session Congress followed the president’s recommendation on all of these matters, repealing all internal taxes dating back to Hamilton’s excise on whiskey, abolishing the internal revenue service employed to collect them, cutting military appropriations and reducing the residence requirement for naturalization back to five years, from the fourteen-year requirement imposed by the Federalists....Congress also enacted the plan prepared by Treasury Secretary Gallatin to pay off the entire national debt within sixteen years by annual appropriations of $7,300,000.”²⁷⁷

“The President recognized his own limitations in finance and relied frankly and completely upon Gallatin to set and administer policy in that field,” wrote biographer Raymond Walters. “On day-to-day matters, Jefferson came to depend upon his Secretary of the Treasury to such an extent that on occasion he accepted his digest and recommendations without inquiry into the case,”²⁷⁸ Secretary Gallatin liked detail and liked order. He tried to master detail and impose order on the Treasury. He also tried to institute stricter accounting procedures but was blocked by congressional inaction. Although a loyal Jeffersonian, Gallatin recognized Hamilton’s contribution to American finance. In 1801 Gallatin was called on by newly elected President Jefferson to investigate Hamilton’s “Blunders and frauds” at the Treasury Department. Instead, Gallatin reported to the President (as he later told James Hamilton, son of Alexander Hamilton: “I have found the most perfect system ever formed. Any change that should be made in it would injure it. Hamilton made no blunders, committed no frauds. He did nothing wrong.” Gallatin added: “I think Mr. Jefferson was disappointed.”²⁷⁹

Jefferson was not disappointed in Gallatin. “Three more congenial souls certainly have never ruled a nation, for they were drawn together not merely by agreement on a common policy but by sympathetic understanding of the fundamental principles of government,” wrote historian Allen Johnson.²⁸⁰ Madison biographer Ralph Ketcham wrote of the “Republican triumvirate” of Jefferson, Madison, and Gallatin: “Each appointee was by experience and ability well-suited for his post, and each had, in six years of Republican leadership in Congress, matchless training in politics. The three men were, as well, in close agreement on what each regarded as fundamental republican principles. Among themselves they made all the great decisions of Jefferson’s administration.....Jefferson deferred to Gallatin on fiscal questions and always asked him to prepare the financial portion of the annual message. On other matters, especially appointments, political strategy, and foreign affairs, Gallatin was a trusted advisor, valued for his understanding and mastery of every matter placed before him. ‘The stern integrity and firm republicanism of this veteran politician,’ as The National Intelligencer put it when Gallatin retired from the cabinet after twelve years’ service, were of immense value to the new nation.”²⁸¹ Gallatin never hid his own views, even when he disagreed with Jefferson. Historian Leonard D. White noted: “Gallatin was both independent and loyal. He never hesitated to give Jefferson and Madison opinions contrary to their opposed Jefferson on his removal policy, on the building of dry docks, on the need for a constitutional amendment to justify the purchase of Louisiana, and on the embargo of 1807. He tempered Jefferson’s views on other matters.”²⁸²

Executive authority and the realities of international and domestic politics changed Gallatin’s policies. Of the ruling Republican triumvirate of Jefferson, Madison and Gallatin, wrote historian Garry Wills, “Gallatin was the realist in this trio. Having tried his own experimental farming in the West, he had seen through the romantic agrarianism of the other two. Though he had opposed Hamilton when he was in Congress, arguing against the national debt, Gallatin knew that, as secretary of the Treasury, he needed Hamilton’s national bank, and other aspects of his program as well.”²⁸³ Secretary Gallatin tried to protect President Jefferson from poor decisions and indecisiveness to which the president’s animus toward Hamilton contributed. But Gallatin was not always able to do that either – for Jefferson or for Madison, Jefferson’s successor. Historian Thomas K. McCraw observed: “Of the three, Gallatin at age forty was the youngest, most energetic, and most active in administering the government. Jefferson was fifty-eight, Madison fifty, and both had chronic health problems.”²⁸⁴

Gallatin biographer Nicholas Dungan wrote: “Gallatin brought to the Treasury a level of professionalism and attention to detail that had been lacking theretofore.” Dungan argued that Gallatin “took on challenges, overcame hardships, prized rather than snatched victory from the jaws of multiple defeats, faced down enemies, cherished friends, revered his family, adhered to his principles, trusted his methods, and held to his ethics, all to the end.”²⁸⁵ Gallatin’s interests and advice ranged wide beyond simple finance and budgeting. He was a restraint on the more impetuous notions of President Jefferson. Biographer Walters observed: “Gallatin’s influence regularly reached beyond the Treasury Department. For one thing, its duty, as he conceived it, was to watch closely the operations of the other Executive departments, making certain that sound fiscal practices were observed. More important was his range of knowledge and his soundness of judgment. Jefferson found his comments so perceptive and constructive, particularly in their preciseness of phrasing, that he made it a practice of submitting messages and other important state papers to Gallatin first among cabinet members and accepted most of his suggestions.”²⁸⁶

President Jefferson was usually more comfortable communicating in writing. Jefferson seldom spoke in public and when he did – such as in his First Inaugural – he couldn’t be heard. Jefferson biographer Joseph J. Ellis wrote that “one might most aptly describe Jefferson’s self-consciously unimperial executive style as the textual presidency. The art of making decisions was synonymous with the art of drafting and revising texts. Policy debates within the cabinet took the form of editorial exchanges about word choice and syntax.” This Jeffersonian weakness played to Gallatin’s strength, uncomfortable as he was as a speaker. Ellis wrote: “Gallatin tended to make more editorial suggestions than any other cabinet member, often writing out revisions more than twice as lengthy as the original Jeffersonian draft and infusing his remarks with a critical edge that would have been unacceptably argumentative in a full cabinet meeting but became palatable when offered in the privacy of written prose.”²⁸⁷

Differences and Similarities

As much as the Hamilton and Gallatin disdained each other in the 1790s – and historians have sometimes disdained them both – their ideas and principles often reenforced each other in the economic foundation of the American Republic. In the first 24 years, the new nation had only four secretaries of the Treasury. Hamilton and Gallatin occupied the post for 18 of them. They may well have been the two most talented Americans ever to occupy that post. And they accumulated a wealth of enemies along the way. The Treasury secretaries had other similarities. As young men, both impressed their elders with the abilities and gained powerful advocates in power. Patrick Henry said of a young Gallatin: “A most astonishing man!...Most sensible and well informed!”²⁸⁸ A decade later, James Madison said that “Gallatin is a real treasure...sound in his principles, accurate in his calculations, and indefatigable in his researches.”²⁸⁹

Hamilton and Gallatin had differed regarding ratification of the Constitution of 1787. Although Hamilton took little constructive work in framing that document that summer, he became its foremost advocate in arranging the writing and newspaper publication of the Federalist Papers. Hamilton wrote Washington in 1788 that ”the framers of [the Constitution] will have to encounter the disrepute of having brought about a revolution in government, without substituting anything that was worthy of the effort; they pulled down one Utopia, it will be said, to build up another.”²⁹⁰ Although he opposed ratification of the Constitution, Gallatin contended: “Alterations in government are always dangerous, and no legislator ever did think of putting, in such an easy manner, the power in a mere majority to introduce them whenever they pleased. Such a doctrine once admitted,....instead of establishing on solid foundations a new government, would open the door to perpetual changes and destroy that stability so essential to the welfare of a nation; as no constitution acquires the permanent affection of the people but in proportion to its duration and age. Finally, those changes would, sooner or later, conclude in an appeal to arms, – the true meaning of those words so popular and dangerous, An appeal to the people.”²⁹¹

Both Hamilton and Gallatin were loyal to the presidents they served and the country they adopted. Both were lightning rods for criticism of the administrations in which they served. Both married into apparent wealth Both men had strong relations with their father-in-laws who took prominent roles in New York politics. Both men were risk-takers but practical. Both filled a vacuum in national policy leadership. Both had larger ambitions – for themselves and their country. Both served as heads of New York banks – Hamilton as the founder of the Bank of New York in 1784 and Gallatin as president of the National Bank of New York, chartered by his friend John Jacob Astor.

Both Gallatin and Hamilton were polymaths. And they were thorough. Hamilton was nothing if not comprehensive. One southern colleague at the Constitutional Convention of 1787 wrote: “When he comes forward, he comes highly charged with interesting matter. There is no skimming over the surface of a subject with him. He must sink to the bottom to see what foundation it rests on.”²⁹² Hamilton biographer Broadus Mitchell compared 18th century Hamilton to 20th century Lord Maynard Keynes. “Both treated economics as a skill, not a science; as changing policy, not permanent principle. Hamilton, with far less theoretical equipment, and not burdened with tradition, swiftly dismissed what he found inapplicable to his situation.”²⁹³ Historian Alexander Balinky argued: “Gallatin had a scientific rather than a broadly political mind. In that he differed from his illustrious predecessor. As a financial technician he may even had been abler than Hamilton. But it is doubtful whether Gallatin could have approached Hamilton in the matter of rearing a financial system from the foundation. Gallatin was conservative where Hamilton had been grandiose. He was stubbornly realistic where Hamilton had been visionary. If Gallatin excelled Hamilton it was as a safer custodian of the purse.”²⁹⁴

Both men were nationalists. As immigrants, they did not have the parochial interest in their home states that handicapped Virginians Jefferson and Madison.“When a native-born American of the period spoke of his country, he often meant his home state,” noted Hamilton biographer Richard Brookhiser. “Hamilton always and only meant the United States.”²⁹⁵ Although both men eventually made New York City their home, their real attachment was to the whole country. Historian Thomas K. McCraw observed that they were more nationalists “than Jefferson, Madison and other founders. Although these others were revolutionaries against Britain, they remained more tied to their native states than were immigrants who had no hereditary American state. A fusion of many of Hamilton’s and Gallatin’s policies found expression in an economic program that came to be called [by Henry Clay] the ‘American System’ – the fullest program for national economic development since Hamilton’s Reports of 1790-1791.”²⁹⁶ Historian John Steele Gordon observed of Hamilton: “Perhaps because he had grown up viewing the colonies on the continent only from afar, his loyalty to the United States as a whole was unalloyed by any loyalty to a particular state, not even New York where he spent his adult life.”²⁹⁷ Biographer Nathan Schachner wrote that “it was ‘national sentiment’ that Hamilton desired above all else. Let Americans once become infused with the idea that they were Americans, and not New Yorkers or Virginians, then even an imperfect instrument of government might eventually be modified in the direction of a strong, coherent, proud and vigorous nation.”²⁹⁸

The two men came from very different backgrounds, but shared a common belief in the nation’s economic destiny and the need to make internal improvements to facilitate the nation’s growth. When Congress asked for a report on internal improvements in 1807, Gallatin worked on his response for the next year and presented it in April 1808. “It was the first great plan for he physical development of the country, as Hamilton’s report on manufacturing was the first plan for its economic development. It was bold, shrewd, farseeing, and thoroughly national in scope and design. It was moreover, practical, and easily within the technical and financial resources of the time, had those resources not been drained by war with Great Britain,” wrote historian Leonard D. White.²⁹⁹ Joel Achenbach wrote Gallatin’s “brilliant Report of the Secretary of the Treasury on the Subject of Roads and Canals [is] probably the closest that any government study of infrastructure has ever come to being a work of literature. Gallatin’s view of the country is sweeping, as if he’s studying the topography from low Earth orbit. In the spirit of George Washington, he sees an expansive theater of potential commerce interrupted by a stone rampart, the Appalachian mountains, rising not far from the Atlantic coast.”³⁰⁰

Hamilton’s and Gallatin’s views of the nation’s future had been shaped from very different perspectives. Hamilton had been born to poverty in the West Indies and aspired to wealth. Gallatin was born to wealth in Geneva – and struggled to hold onto part of his family inheritance. Gallatin had extensive Europeans holdings from his family – which the French Revolution depreciated. “You may see by that that the French revolution has cost me exactly 16,000 dollars, to wit: 6000 loss on my grandfather's inheritance, 6000 on the interest and principal of my annuities in France, and 4000 on the Dutch stock. Yet the Federals call me a Frenchman, in the French interest and forsooth in the French pay,” he complained to his wife in 1798.³⁰¹ Both Gallatin and Hamilton suffered parental losses at early ages. Gallatin’s mother died when he was nine; Hamilton’s mother died when he was 11. Gallatin, a committed democrat, had been born into aristocracy. Hamilton, born out of wedlock, sought to be part of society. Gallatin’s family was prominent in both business and government in Geneva. Hamilton’s family was the butt of Carribean scandals.

For Hamilton, emigration to America was purely economic and educational. The teenage clerk had been promised a college education. Gallatin had already graduated from the Geneva Academy by the time he left Europe in 1780. “Whatever may have been his immediate motives for emigrating, Albert Gallatin was undoubtedly committed to a republic form of government,” wrote biographer L.B. Kuppenheimer. “Having witnessed the susceptibility of free government to the encroachments of tyranny, Gallatin – more than most individuals of his age – was aware of the pitfalls and dangers inherent in trying to sustain a free society.”³⁰²

It was their pens, not their tongues, that were indefatigable. Hamilton’s in particular knew no rest. Biographer Richard Brookhiser wrote: “Hamilton’s relationship with words was intimate, and inexhaustible. The words kept flashing from him, even when he was in private. Sometimes he talked to himself. In 1789, Philip Schuyler wrote his daughter with a funny story: a store-owner in Kinderhook, New York, had seen a man walking up and down in front of his store, ‘his lips moving rapidly as if he was in conversation with some person.’ When the man came inside to change a $50 bill, the owner refused, fearing that he had ‘lost his reason.’ ‘I have seen him before my door for half an hour, sometimes stopping, but always talking to himself, and if I had changed the money and he had lost, I might have received blame.’ Pray ask my Hamilton,’ Schuyler concluded, ‘if he can’t guess who the Gentleman was.’”³⁰³

Both Gallatin and Hamilton were natural pamphleteers – especially in the cantankerous 1790s. Hamilton was more a great thinker than a great writer, but he made up in quantity what he lacked in quality. Hamilton’s pen was relentless. Hamilton “dashed of thirty-eight installments, vividly portraying every imaginable horror resulting from the [Jay] treaty’s defeat,” noted historian Richard Norton Smith.³⁰⁴ Gallatin biographer Raymond Walters, Jr., wrote: “Gallatin delivered more telling attacks on the Federalist financial system during the two years when Democratic-Republican victory seemed to be coming closer and closer, outside Congress. He devoted two months of the summer recess of 1800 to preparing another pamphlet on the state of the federal finances under Commodore Nicholson’s roof in New York.”³⁰⁵ Hamilton’s pen seldom knew any rest. Biographer Ron Chernow wrote: “Perhaps the era’s most prolific essayist, Hamilton seldom published under his own name and drew on a bewildering array of pseudonyms.”³⁰⁶

Neither Hamilton nor Gallatin was a great speaker, but they made up in logic what they lacked in eloquence. In June 1787, Hamilton gave a six-hour speech to the Constitutional Convention. “As an orator, Hamilton was not a spellbinder. His method, which could be just as effective, was to find the first principles of his topic, and tirelessly, even relentlessly, work out their consequences,” wrote biographer Richard Brookhiser.³⁰⁷ Gallatin could also speak at length – giving speeches as long as three hours while a Pennsylvania legislator. Historian Jay Winik wrote of Hamilton that “as an orator, he could speak extemporaneously for hours. As a writer, he could crank out 10,000-word memos overnight; and as a figure on the world stage he was one of a kind: He had the superhuman energy of a Potemkin, the worldliness and panache of a Mirabeau, a genius that more than rivaled Voltaire’s or Montesquieu’s, and a humanitarian impulse that recalled a William Wilberforce. Talleyrand, no stranger to greatness, called him one of the greatest men of the age. Indeed, Hamilton had an intensity and frankness about him which both made him broadly admired and genuinely feared; unlike the courtly Jefferson, who mumbled speeches in a soft, inaudible voice, Hamilton never left anyone guessing as to where he stood.”³⁰⁸

Both Hamilton and Gallatin were essentially self-taught in public finance. During the Revolutionary War, during “his spare time, Hamilton pored over financial treatises. As Washington’s aide, he was not at liberty to issue controversial plans that might jeopardize congressional relations, so he drafted a clandestine letter to an unidentified congressman and outlined a new currency regime,” wrote Hamilton biographer Ron Chernow.³⁰⁹ Gallatin took up his study of finance later – while a Pennsylvania state legislator.

Neither Gallatin nor Hamilton were ever wealthy but their tangled family financial affairs influenced their thinking. Gallatin took a very different approach to national indebtedness when he became Treasury secretary in 1801. Morally and politically, Gallatin hated debt – in personal or national affairs. “To be in debt is to me the worst of all possible situations, and one in which I would never have fallen, had I never formed a society with others,” Gallatin wrote of his own complicated business affairs in western Pennsylvania.³¹⁰ Biographer Henry Adams wrote that “he held debt in horror, punctilious exactness in avoiding debt was his final axiom in finance; the discharge of debt was his first principle in statesmanship; searching and rigid economy was his invariable demand whether in or out of office, and he made this demand imperative upon himself as upon others.” Gallatin was a strict pay-as-you-go bureaucrat. Adams noted that Gallatin “regarded the habit of borrowing money with horror; this was a resource to be reserved for war, when national life depended upon it; until that time came he insisted that the expenditure should not exceed the revenue.”³¹¹ Historian Alexander Balinky added: “Gallatin feared that the ease with which government could ordinarily borrow would incite rather than check extravagant spending.” Balinky wrote: “One feels a strong sense of Geneva’s awe-inspiring morality through Gallatin’s discussion of the debt question. He moralized against any form of expenditure – public or private – which had to be paid for out of sources other than current income or revenue.”³¹²

Gallatin was relentless in his campaign against debt. Biographer John Austin Stevens wrote: “That the mission of Jefferson’s administration was the reduction of the debt, Gallatin set forth in his next letter of November 16, 1801. ‘I am firmly of opinion that if the present administration and Congress do not take the most effective measures for that object, the debt will be entailed on us and the ensuing generations, together with all the systems which support it, and which it supports.’ On the other hand he says, ‘If this administration shall not reduce taxes, they never will be permanently reduced.’” To reduce both the debt and the taxes was as much a political as a financial problem.³¹³ In his letter to Jefferson, Gallatin continued: “To strike at the root of the evil and avert the danger of increasing taxes, encroaching government, temptations to offensive wars, &c., nothing can be more effectual than a repeal of all internal taxes; but let them all go and not one remain on which sister taxes may be hereafter engrafted. I agree most fully with you that pretended tax-preparations, treasure-preparations, and army-preparations against contingent wars tend only to encourage wars.”³¹⁴ Historian Sean Wilentz wrote: “On fiscal policy, Jefferson frontally attacked the Hamiltonian system by initiating the complete elimination of federal internal taxation, including the land tax and the hated whiskey excise. Secretary Gallatin initially balked at removing the duties, not because he approved of them but because his first priority was to cut the huge debt inherited from the Federalists. Jefferson insisted that ending the excise, an enormous political symbol as well as a public burden, be included as part of Gallatin’s plans. Gallatin, and then Congress, assented in no uncertain terms: ‘let them all go,’ Gallatin said, ‘and not one remain on which sister taxes may be hereafter engrafted.”³¹⁵

Gallatin never wavered in his pursuit of government economy. In November 1809, Gallatin wrote President James Madison: “I do not pretend to step out of my own sphere and to control the internal management of other Departments. But it seems to me that as Secretary of the Treasury I may ask that, while peace continues, the aggregate of the expenditure of those Departments be kept within bounds such as will preserve the equilibrium between the national revenue and expenditure without recurrence to loans. I cannot, my dear sir, consent to act the part of a mere financier, to become a contriver of taxes, a dealer of loans, a seeker of resources for the purpose of supporting useless baubles, of increasing the number of idle and dissipated members of the community, of fattening contractors, pursers, and agents, and of introducing in all its ramifications that system of patronage, corruption, and rottenness which you so justly execrate.^”316

Gallatin was certainly the more frugal man – in personal and governmental habits. He practiced economy at home as well as the Department of the Treasury. “He managed his own household expenses, and at a time when bountiful stores were the fashion in every household he insisted on a rigid observance of the more precise French system, wrote biographer J.A. Stevens. “Gallatin made an appropriation of a certain sum each day for his expenses, and required from his purveyor a strict daily account of disbursements. An amusing story is told of him at his own table. On an occasion when entertaining a company dinner, he was dissatisfied with the menu and expressed his disapprobation to his maître d’hôtel, a Frenchman, who replied to him in broken English, that it was not his fault, but that of the ‘mal-appropriations.’³¹⁷ Nathan Schachner wrote that Hamilton’s “cash books show item after item of five or ten dollars, and he charged twenty-five dollars for a matter that took him from the city. He had a large and ever-growing family to support, and his tastes were lordly. Though his income was good, at no time during his career did he have much ready cash on hand. It was always a close race between intake and expenditure.” Schachner noted that in 1791, Hamilton wrote an associate: “If you can conveniently let me have twenty dollars for a few days, be so good as to send it by the bearer.”³¹⁸ Gallatin had been raised in the comfort of a well-to-do family in Geneva – and benefitted from substantial inheritances. But the French Revolution decimated the value of those legacies. And dedication to public policy had interfered with Gallatin’s ability to manage his investments in western Pennsylvania and build his personal wealth. Both Gallatin and Hamilton were unsuccessful in their own experiments in manufacturing, but both believed that manufacturing was important to the future of the country. Both had rich friends. Gallatin developed a close relationship with John Jacob Astor, who eventually recruited him as a president of his bank.

But Gallatin was not parsimonious with his talents or his principles. He wrote a friend in 1809: “At what time or in what country did you ever hear that men assumed the privilege of being more honest than the mass of society in which they live without being hated or persecuted? Unless they chose to remain in perfect obscurity and let others and the world take their own course; and in that case they can never be heard of. All we can do here is to fulfill our own duty without looking at the consequences so far as [they] relate to ourselves. If the love and esteem of others or general popularity follow, so much the better. But it is with these as with all temporal blessings, such as wealth, health, &c; not to be despised, but never to be considered....as objects to which a single particle of integrity, a single feeling of conscience should be sacrificed. I need not add that I preach much better than I practice.”³¹⁹

Both men had lofty standards of public service. Biographer Ron Chernow noted that “as soon as he took office, Hamilton established high ethical standards and promulgated a policy that employees could not deal in government securities, setting a critical precedent for America’s civil service. Hamilton himself divested himself of any business investments that might create conflicts of interest.”³²⁰ Biographer Nathan Schachner noted that it is “certain that Hamilton did not own or deal in a single share of the public debt, and that when he left the Treasury, he was poorer than he entered it.”³²¹ One of Hamilton’s greatest lapses in judgement, however, was his appointment of college friend William Duer as assistant secretary of the Treasury. Duer’s speculative behavior gave Hamilton’s reforms a bad name. John Steele Gordon noted: “When Virginia’s Henry Lee asked his friend Hamilton for information on the Treasury’s refunding plans, Hamilton refused to tell him anything. But William Bingham, a rich Philadelphian and intimate of Duer, was so sire of the future that he borrowed £60,000 – a very considerable fortune at that time – in Amsterdam in order to more profitably speculate in the federal debt.”³²²

As Treasury secretary, Hamilton had to deal with repeated allegations of financial mismanagement and corruption. But Hamilton himself was a paragon of public duty. “A man of irreproachable integrity, Hamilton severed all outside sources of income while in office, something that neither Washington nor Jefferson nor Madison dared to do,” wrote Ron Chernow.³²³ Hamilton wrote in 1791: “I observe that certain characters continue to sport with the Market & with the distresses of their fellow Citizens. 'Tis time there should be a line of separation between honest men and knaves, between respectable stockholders and dealers in the funds and mere unprincipled gamblers. Public infamy must restrain what the laws cannot.”³²⁴ Biographer Forrest McDonald wrote that Hamilton’s “attention to the proprieties and niceties of official conduct was never keener, his skill as an administrator never greater. But he said things that in prudence he should not have said, and he did things that in prudence he should not have done. He made powerful enemies and made himself vulnerable to them. At the same time, the irresponsibility and greed of some erstwhile supporters jeopardized the very foundations of his financial system.”³²⁵

They differed in their attitudes toward taxes, which Gallatin tried to dramatically limit. Gallatin considered customs duties the “least vexatious, and general the least offensive” taxes.³²⁶ Historian Forrest McDonald wrote: “Gallatin believed that if people were relieved of onerous taxes in normal circumstances they would gladly pay them during a war or in other emergency situations. He also believed that the best way for a government to build its credit was to pay its debts. Hamilton’s view, on the other hand, was that Gallatin was making a dangerous mistake on both counts, that the public debt and the machinery and legislation for collecting all forms of taxes must be kept at least nominally operative at all times, so that they might be readily expanded or activated during emergencies.”³²⁷ Gallatin too was man of strong principles – but he was also a practical man. He opposed the imposition of direct taxes in the 1790s, but opposed immediate repeal when Republicans came to power in 1801. He recognized that they were critical to retiring the federal deficit. The early Republic was highly dependent on customs collections – as the embargo imposed by President Jefferson would later demonstrate.

By nature, Gallatin was more a diplomat than a partisan. By nature, Hamilton was more of a partisan than a diplomat; his pen took no prisoners. Hamilton did not always say or do what was politic. Gallatin was analytical and logical. Hamilton was analytic but emotional. “I was not made for politics in such times as agitation,” Gallatin wrote a relative in 1799. “I love peace and tranquillity; I detest confusion and tempests....”³²⁸ Biographer L.B. Kuppenheimer wrote of Gallatin: “Although he held firm convictions throughout his life, he consistently sought nonconfrontational ways to achieve his ends. At this early stage in his adult life, Gallatin was faced with choosing between two strong loyalties: his family, of which he was intensely proud, and his conviction that liberty should be available to all classes of society.”³²⁹

Hamilton had a taste for pageantry – which Gallatin never evinced. Hamilton was also something of a dandy – fastidious in his dress and appearance. Gallatin was the opposite. Gallatin prided himself on his ability in Congress in the 1790s to live on his salary of $6 a day. He certainly did not spend money excessively on clothes. Even as a Cabinet member, his personal appearance belied his status. One senator observed that Gallatin was “very inattentive and negligent of his person and dress – his linen is frequently soiled and his clothes tattered.”³³⁰ Historian Roger G. Kennedy noted: “Gallatin was the sloppiest of the Founders, neglecting his teeth and hair, notoriously given to wearing his clothes beyond a sanitary date and postponing repairs about his elbows and knees.”³³¹

Both men were frustrated in their ambition to move from finance to diplomacy. On two occasions, Hamilton was considered for an important foreign diplomatic posting. The first came toward the end of the Revolutionary War when Hamilton, who spoke perfect French and often acted as General Washington’s interpreter with French allies, was considered for appointment as an aide to the American minister in Paris – and also as a possible minister to Russia. The second occasion came in 1794 when American relations with Britain deteriorated and Washington sought to send a high-profile man to London to negotiate. “The Republicans were as afraid of Hamilton as the Federalists were for him: they feared that the demon would either sell out the United States or be so effective at securing concessions from his British friends that he would succeed Washington as President,” wrote Washington biographer James Thomas Flexner. “Hamilton did not hide from Washington that he was all eagerness. Realizing that his Secretary of the Treasury did not possess ‘the general confidence of the country,’ Washington hesitated to appoint him. Yet the pressure from his most valuable aide prevented the aging President from settling on anyone else. The Federalists, worried lest the whole proposition be allowed to lapse, finally persuaded Hamilton to withdraw. Hamilton then suggested Chief Justice [John] Jay. Washington appointed Jay.”³³² Nevertheless, Hamilton wrote Jay’s instructions. This setback may have been providential, given Hamilton’s personality and the difficulty of negotiating a satisfactory treaty with Great Britain. Biographer Ron Chernow noted of Hamilton: “Unlike Franklin or Jefferson, he never learned to subdue his opponents with a light touch or a sly, artful, understated turn of phrase.”³³³ A young Alexander Hamilton wrote: “In common life, to retract an error even in the beginning is not easy task. Perseverance confirms us in it and rivets the difficulty.”³³⁴ Ron Chernow observed: “Hamilton was a man of daunting intellect and emphatic opinions, and John Quincy Adams contended that it was hard to get along with him if you disagreed with him. Hamilton knew he had a dogmatic streak and once joked, writing about himself in the third person, ‘Whatever may be the good or ill qualities of that officer, much flexibility of character is not of the number.’”³³⁵ Hamilton biographer Henry Cabot Lodge wrote:

Like most men of great talents and strong will, Hamilton had a large measure of self-confidence. Just after he left the treasury, he feared that Congress would fail to treat the finances in a proper way. He wrote to a friend in great wrath that he would not stand tamely by and see the nation disgraced; if Congress did not do their duty they would have to reckon with him. On another occasion he was displeased by what he considered a useless demand for information on the part of the Senate. He thereupon addressed a communication to that august body in which he lectured them as to their conduct, and took them to task roundly for their misbehavior. This letter is quite a curiosity, and the meekness with which the Senate apparently accepted the rebuke is not the least amusing part of the affair. All this was thoroughly characteristic of the man. The greater the odds the more defiantly and the more confidently he faced opposition. On one or two occasions this self-confidence took the more disagreeable form of self-assertion, but such outbreaks were rare.³³⁶

Hamilton was a fighter. Claude Bowers wrote that “tenacity was one of the factors in his leadership. He was never a fair-weather fighter. Opposition only whetted his appetite for battle. Nor was he easily discouraged.”³³⁷ Hamilton was by nature a fighter and he conducted his fights with Thomas Jefferson in the open – though under a pseudonym. By contrast, “Jefferson avoided open conflicts. By nature he hated them. He preferred to work by subtlety and indirection. He fought Hamilton’s measures not openly, but through that group of disciples, chiefly from Virginia with some additions from Pennsylvania and New York to whom he stood in the position of philosophic guide and father. The chief of these was Madison, whom he early weaned away from the Hamiltonian fold,” wrote Hamilton biographer Nathan Schachner.³³⁸ Gallatin was also part of that Jeffersonian attack group. Stanley Elkins & Eric McKitrick wrote that “it was his pure urge for glory, his contempt for danger, and his weakness for the beau geste that made Hamilton the hero of one of the key actions at [the Battle of] Yorktown.”³³⁹ Historian Gordon S. Wood adds: “Hamilton and other intensely engaged men sought desperately to protect their reputations from the ever-increasing scurrility and personal abuse of the time. The politics of the early national period, as historian Joanne B. Freeman has shown, can be properly understood only within this culture of personal reputation and honor.”³⁴⁰ Fergus M. Bordewich wrote: “Implausible as it sounds two centuries later, he fantasized leading the army through Jefferson’s stronghold of Virginia, and then on a barely disguised imperialist adventure through Florida, Louisiana, Mexico, and on into Central America.”³⁴¹ Hamilton biographer John C. Miller wrote: “Hamilton too often acted as passion, rather than as reason dictated. He was too apt to believe that he could overwhelm his enemies with a rhetorical onslaught, forgetting in his anger that it was at least as easy to write himself out of reputation as it was to destroy the good name of his adversary.” Hamilton was disputatious. Miller wrote: “Throughout his career, Hamilton demonstrated that he could destroy as well as create – and sometimes it was his own creations that he smashed.” Miller wrote: “Pride and a fierce determination to succeed – these were the qualities which he derived from his early environment and which he never relinquished.”³⁴² Hamilton had a poison-tipped pen. Jefferson biographer Claude G. Bowers noted: “No man ever complained more bitterly of the attacks of the press; none ever used the press more liberally and relentlessly to attack.” Bowers wrote: “These outbursts of impatience and this intolerance of weakness were forgiven by the strong, but treasured against him by smaller and more envious minds, and the time was to come when, with his field marshals loyal, he was to have few colonels and captains, and practically no privates. He was a failure in the management of men, and only his superior genius made it possible for him to dominate so long.”³⁴³

Gallatin’s own personality was far less disputatious. Unlike Jefferson or even Hamilton, Gallatin’s taste for political intrigue was always very limited. Henry Adams wrote that “Gallatin was born and bred a gentleman; in person and manners he was well fitted for the cabinet-table over which Jefferson presided. Gallatin possessed the personal force which was somewhat lacking in his two friends. His appearance impressed bystanders with a sense of strength. His complexion was dark; his eyes were hazel and full of expression; his hair black, and like Madison he was becoming bald. From long experience, at first among the democrats of western Pennsylvania, and afterward as a leader in the House of Representatives, he had lost all shyness in dealing with men. His long prominent nose and lofty forehead showed character, and his eyes expressed humor. A slight foreign accent betrayed his Genevan origin. Gallatin was also one of the best talkers in America, and perhaps the best-informed man in the country; for his laborious mind had studied America with infinite care, and he retained so much knowledge of European affairs as to fit him equally for the State Department or the Treasury.” Adams wrote: “Mr. Gallatin seldom indulged in personalities. His temper was under almost perfect control. His power lay in courage, honesty of purpose, and thoroughness of study.”³⁴⁴

But the conflict with Britain and Congress in the Madison administration exhausted even Gallatin’s patience. There was, however, no available alternative to Gallatin as Treasury Secretary. He was the indispensable man in government – at least until James Monroe arrived to take over as secretary of State (and sometimes secretary of War as well). John Austin Stevens wrote: “Unfortunately for the country, the Republican party knew neither how to prepare for war, nor how to keep the peace. Mr. Madison had none of the qualifications of a war President; neither executive ability, decision of character, nor yet that more important faculty, knowledge of men. In his attachment to Mr. Madison and in loyalty to what remained of the once proud triumvirate of talent and power, Mr. Gallatin supplied the deficiencies of his fellows as best he could, until an offer of mediation between the United States and Great Britain on the part of the emperor of Russia presented an opportunity for honorable withdrawal and service in another and perhaps more congenial field.”³⁴⁵ Historian Allen Johnson noted of Gallatin: “The defects of Madison as a War-President he had long foreseen; the need of reorganizing the Executive Departments he had pointed out as soon as war became inevitable; and the problem of financing the war he had attacked farsightedly, fearlessly, and without regard to political consistency.”³⁴⁶

When the Russians offered to mediate between the Americans and the British, Gallatin gratefully took the opportunity to leave the Cabinet and sail for Europe as one of three American peace commissioners. In putting together the peace commission to end the War of 1812, President Madison “secured confirmation for Gallatin, since he included, as a concession to the ‘warhawks’ in Congress, their spokesman Henry Clay,” observed historian Garry Wills. “Gallatin, while trying to make peace with the British, had his hands full keeping peace between members of the peace commission, since Clay and John Quincy Adams ‘acted upon each other as explosives.’”³⁴⁷

John Austin Stevens noted: “Mr. Gallatin did not anticipate a long absence, and felt, as he said to his old friend [John] Badollet, that he could nowhere be more usefully employed than in this negotiation. Certainly he could have no regret in leaving a cabinet which had so little regard to his own feelings and so little political decency as to confer the appointment of adjutant-general in the United States army on his malignant assailant, William Duane of the "Aurora."³⁴⁸ Historian Harry Ammon wrote: “Gallatin, ...welcomed this appointment not only from a personal inclination for diplomacy, but because it would give him a respite from Armstrong, who, with a total disregard for his colleague’s political position, had named as adjutant general Gallatin’s most relentless enemy, William Duane, editor of Philadelphia Aurora.”³⁴⁹

“In his eight years of service under Jefferson, Gallatin had not found the Treasury Department a bed of roses. Under Madison there was an undue proportion of thorns,” wrote biographer Stevens.³⁵⁰ Gallatin was perhaps the original opponent of an American military-industrial complex, but he also understood that financing a war could not be done without sufficient financial tools. Historian Allen Johnson wrote: “The man of clearest vision in these unhappy months of 1812 was undoubtedly Albert Gallatin. The defects of Madison was a War-President he had long foreseen; the need of reorganizing the Executive Departments he had pointed out as soon as war became inevitable; and the problem of financing the war he had attacked farsightedly, fearlessly, and without regard to political consistency. No one watched the approach of hostilities with a bitterer sense of blasted hopes. For ten years he had labored to limit expenditures, sacrificing even the military and naval establishments, that the people might be spared the burden of needless taxes; and within this decade he had also scaled down the national debt one-half, so that posterity might not be saddled with burdens not of its own choosing.”³⁵¹ In Gallatin’s absence, the country’s fiscal situation would worsen. “Before the close of Madison’s administration, February 12, 1816, the public debt had run up to over one hundred and twenty-three millions, and a sum equal to the entire amount of Mr. Gallatin’s savings in two terms had been expended in one,” noted John Austin Stevens. “But his work had not been in vain. The war was the crucial test of the soundness of his financial policy. The maxim which he announced, that debt can only be reduced by a surplus of revenue over expenditure, and the accompaniment of every loan by an appropriation for its extinguishment, became the fundamental principle of American finance.”³⁵²

Gallatin’s diplomacy would prove vital in ending the War of 1812. He left America in May 1813 to take up duties as an extraordinary envoy to Russia – beginning his third and diplomatic phase of his government service. (Gallatin would later serve as U.S. Minister to France under Presidents James Madison and James Monroe and as U.S. Minister to Great Britain under President James Quincy Adams.) Historian Allen Johnson wrote: “For twelve weary years Gallatin and labored disinterestedly for the land of his adoption and now he was recrossing the ocean to home of his ancestors with taunts of his enemies ringing in his ears.” Would the Federalists never forget that he was a ‘foreigner’? He reflected with a sad ironic smile that as a ‘foreigner with a French accent’ he would have distinct disadvantages in the world of European diplomacy upon which he was entering.”³⁵³ Historian Garry Wills wrote: “When the British signaled a change in approach, the task of statesmanship devolved on the American team, and it was Gallatin who made his fractious comrades live up to what was demanded of them. John Quincy Adams would not give up America’s right to use Britain’s Grand Banks fisheries, since his father had made that a key provision in the treaty that ended the Revolution. Henry Clay would not recognize the same treaty’s guarantee of England’s right to navigate the Mississippi, since that was a prerogative his western constituents were determined to monopolize. Gallatin wore down their insistence on explicit treatment of these rights. He saw that the one great issue had become territory. Was the treaty to recognize the holdings of the two powers at the cessation of hostility (uti possidetis) or go back to pre-war boundaries (status quo ante bellum)?”³⁵⁴ Ultimately, Gallatin prevailed.

National Development

Both Hamilton and Gallatin were committed to the economic development of the new nation – and the economic opportunity that would result. Both Hamilton and Gallatin were committed to public works that would create the necessary conditions for Congress. They saw that the new nation needed to be knit together by roads and commerce. Historian Raymond Walters, Jr., wrote that Gallatin’s “frontiersman’s nationalism shaped his dream of what the government should do once that goal was achieved. It was nothing else than the building of roads, canals, and other internal improvements at federal expense so as to knit all sections of the nation into a tight union.”³⁵⁵ Gallatin recalled of his service in the Pennsylvania legislature in the early 1790s: “The spirit of internal improvements had not yet been awakened. Still the first turnpike road in the U. States was that from Phila. to Lancaster. This, as well as every temporary improvement in our communications, road & rivers and preliminary surveys met of course with my warm support.”³⁵⁶ Biographer L. B. Kuppenheimer argued that “Unlike Hamilton, Gallatin believed in an open economy and an institutional system that would encourage the broadest possible range of participation. Hamilton, on the other hand, despite his support of a diversified economy, sought a close partnership between the leading merchants and the government. He was convinced that commerce was the controlling component of the economy.”³⁵⁷ Gallatin biographer Henry Adams noted that “a large part of the twelve best years of his life was...passed in negotiations for commercial treaties with England, France, and the Netherlands...”³⁵⁸

By buying land and establishing a community in southwestern Pennsylvania, Gallatin did more than talk about his faith in western development. According to Raymond Walters, “It was characteristic of Gallatin that his ambitious western undertaking, which engaged all his financial resources and much of his thought during the Congressional years, was instigated by loyalty to Swiss friends and to a beloved brother of his wife. It had begun late in 1794, when letters from Geneva told of the desire of many friends to escape the turmoil that the French Revolution had initiated.”³⁵⁹ In July 1795, Gallatin formed a partnership with brother-in-law James Nicholson and three Swiss friends to develop the hamlet of Wilson’s Port, Pennsylvania into a commercial and manufacturing center. Eventually, his Swiss friends proved worthless to the commercial venture – providing more complaints than management expertise. By 1799, the partnership had ceased and Gallatin was in sole control of the business ventures which were never very profitable under his largely absentee management. Gallatin was not lucky in business. He sold a large portion of his Pennsylvania properties to Robert Morris, who defaulted when he went to debtor’s prison. Economic historian Charles Sellers noted that “Gallatin had brought to western Pennsylvania a Rousseavian enthusiasm for the virtuous and democratic farmer of the American interior and a highly educated intelligence that recommended him as a representative for the farmer in the Pennsylvania legislature. He also brought a substantial patrimony, which he invested in thousands of western acres and a series of enterprises – a town promotion, a glassworks, a gun factory – employing nearly a hundred workers.”³⁶⁰

Gallatin’s experiences and revenues proved educational. As a western Pennsylvania farmer, Gallatin understood firsthand how important transportation would be to the country’s economic growth. In March 1803, Gallatin wrote Jefferson regarding the pending Louisiana Purchase that “the future destinies of the Missouri country are of vast importance to the United States, it being perhaps the only large tract of the country, and certainly the first which lying out of the boundaries of the Union, will be settled by the people of the United States.”³⁶¹ As Hamilton saw it, “We are a young and growing empire with much enterprise and vigour, but undoubtedly are, and must be for years, rather an agricultural than a manufacturing people.”³⁶² But the two men saw the future. Unlike Jefferson, Gallatin was not wedded to the concept of a perpetually agrarian America and his western Pennsylvania settlement was built around a glass works.

Like Hamilton, Gallatin was a strong proponent of the Louisiana purchase. He was also prime opponent in the cabinet of the need for a constitutional amendment to authorize the purchases. “Is it not a more natural construction to say that the power of acquiring territory is delegated to the United States by the several provisions which authorize the several branches of government to make war, to make treaties, and to govern the territory of the Union?” wrote Gallatin in a letter to President Jefferson regarding the Louisiana Purchase. “The existence of the United States as a nation presupposes the power of every nation of extending their territory by treaties, and the general power given to the President and Senate of making treaties designates the organs through which the acquisition may be made,” he added.³⁶³ Earlier, noted Henry Adams, Gallatin “wrote on the 13th January 1803, a letter to Mr. Jefferson, which might have been written, without a syllable of change, by Alexander Hamilton to General Washington ten years before:

To me it would appear, 1st. That the United States as a nation have an inherent right to acquire territory.
2d. That whenever that acquisition is by treaty, the same constituted authorities in whom the treaty-making power is vested have a constitutional right to sanction the acquisition.
3d. That whenever the territory has been acquired, Congress have the power either of admitting into the Union as a new State, or of annexing to a State with the consent of that State, or of making regulations for the government of such territory.³⁶⁴

Gallatin had come a long way toward Hamilton’s vision of the government’s constitutional powers – as had Jefferson himself. Gallatin’s instructions to other government officials indicate that Gallatin was dedicated to defending the new territory with force, if necessary. Henry Adams noted: “The Louisiana treaty threw on Mr. Gallatin a new class of duties. He had to make all the arrangements not only for payment of the purchase money to France, but for the modifications of his financial system which so large and so sudden an emergency required.”³⁶⁵ Gallatin was never as much of a strict constructionist of the Constitution as Jefferson; he took a broader view of the “implied powers” of the executive branch. “Gallatin did not share his chief’s conviction that a constitutional amendment was prerequisite to a program of national improvements,” wrote biographer Walters. “Even before the debt was extinguished, he found projects which he was anxious to start. Nearest to his heart, because it would pass through his own western Pennsylvania neighborhood, was one authorized by the Act of 1802 to connect Cumberland, Maryland, with the Ohio River; and he told the President this was ‘a national object, it is of primary importance...as the main communication for the transportation of all the foreign or Atlantic articles which the Western States consume, and even for the carriage of Eastern produce and flour to the Potomack.”³⁶⁶ That too was a project that had long been close to the heart of George Washington and had spurred him to lead a canal company to make the Potomac River navigable around the Great Falls.

Gallatin wanted to modify federal land policy to reduce the size of minimum tracts, reduce the purchase price by a third, and eliminate credit sales. In 1803 he presented a report on land policy at the request of the House of Representatives. “In fashioning a response, Gallatin tried to balance the dual commitments of making land affordable to the average person as well as providing an effective source of revenue for the orderly retirement of the national debt,” according to biographer L.B. Kuppenheimer.³⁶⁷ Congress continued the credit system but did agree to reduce the size of the minimum tract and the price. “The public lands constitute the only great national resource exclusive of loans and taxes,” wrote Gallatin in 1813. “They have already been mentioned as a fund for the ultimate extinguishment of the public debt.”³⁶⁸

Jeffersonians were, if anything, more interested than the Federalists in tying the nation together through a transportation system. The difference was their unwillingness to spend federal money on many projects. “As the population of the west increased, the demand for federal expenditures for international improvements grew,” wrote historian Leonard D. White. “The western farmers knew that federal money was being spent for eastern shipowners and merchants in the form of lighthouses, buoys and beacons, and harbor works. They thought it appropriate for federal money to be spent also for roads and canals over which they could send their produce to the eastern markets,” wrote historian Leonard D. White. “The Jeffersonians agreed in principle. They were held back only by their desire to get ride of the debt, and by a conviction that they needed additional constitutional authority.”³⁶⁹ Albert Gallatin had budget concerns but no constitutional problems.

“In connection with the land system, Mr. Jefferson favored, and Mr. Gallatin devised, an extensive plan of internal improvements,” wrote biographer John Austin Stevens. “The route of the Cumberland road from the Potomac to the Ohio was reported to Congress in 1807; a coast survey was ordered in the same year. The first superintendent was Hassler, a Swiss, whom Mr. Gallatin brought to the notice of Mr. Jefferson. In 1808 a general plan of improvement was submitted to the Senate. This included canals parallel with the seacoast, making a continuous line of inland navigation from the Hudson to Cape Fear; a great turnpike from Maine to Georgia; the improvement of the Susquehanna, Potomac, James and Santee rivers to serve the slope from the Alleghanies to the Atlantic; of the Alleghany, Monongahela, and Kanawha, to serve the country westward to the Mississippi, the head waters of these rivers to be connected by four roads across the Appalachian range; a canal at the falls of Ohio; a connection of the Hudson with Lake Champlain, and of the same river with Lake Ontario at Oswego; and a canal around Niagara Falls. The entire expense he estimated at $20,000,000 to be met by an appropriation of $2,000,000 a year for ten years; the stock created for turnpikes and canals to be a permanent fund for repairs and improvements.”³⁷⁰ Historians Robert E. Wright and David Cowen wrote: “Gallatin’s attempt to tie the nation together both commercially and military with an ambitious program of ‘internal improvements,’ canals and turnpikes, also failed. He realized that the outlook of the typical Congressman was rather provincial, so he tried to include something for everybody. That tactic backfired, because by trying to please everyone Gallatin ended up pleasing no one. The estimated $20 million price tag over ten years was simply too large to garner enough support to pass.”³⁷¹ John Seelye noted: “Though Gallatin’s report remains a signal and visionary document, it suffered a fate similar to that of the many pamphlets and schemes for internal improvements...Even in its conception, moreover, it was a curious and paradoxical creation, reflecting the disjunctiveness inherent in the president who authorized it.”³⁷²

Still, Gallatin’s vision was national and Hamiltonian. Biographer Henry Adams noted: “Naturally the improvements thus contemplated were so laid out as to combine and satisfy local interests. The advantage which Mr. Gallatin proposed to gain was that of combing these interests in advance, so that they should co-operate in on great system instead of wasting the public resources in isolated efforts. He wished to fix the policy of government for at least ten years, and probably for an indefinite time, on the whole subject of internal improvements, as he had already succeeded in fixing it in regard to the payment of debt. By thus establishing a complete national system to be executed by degrees, the whole business of annual chaffering and log-rolling for local appropriations in Congress, and all its consequent corruptions and consistencies, were to be avoided.”³⁷³

Gallatin’s ideas followed naturally from those of Hamilton. In 1809, Gallatin produced his own report on manufacturing – one that biographer L.B. Kuppenheimer said “melded all the resources of the nation into one coordinated effort.”³⁷⁴ Gallatin wrote that “annual production exceeds one hundred and twenty-millions of dollars. And it is not improbable that the raw materials used, and the provisions and other articles consumed by the manufacturers, create a home market for agricultural products not very inferior to that which arises from foreign demand..”³⁷⁵ In December 1791, Alexander Hamilton had sent to Congress his “Report on Manufactures.” According to Louis M. Hacker, Hamilton divided the report “into two parts, the first of which is by far the more important. It is a theoretical analysis of the role of the manufacturing industries in the economy, the reasons why they should be encouraged, and the means to be followed toward this end.”³⁷⁶ Gallatin made a comprehensive case – as he always did – for why manufacturing was important to a growing American economy.

Hamilton wrote: “It is in the interest of nations to diversity the industrious pursuits of the individuals who compose them; that the establishment of manufactures is calculated not only to increase the general stock of useful and productive labor, but even to improve the state of agriculture in particular, – certainly to advance the interests of those who are engaged in it.”³⁷⁷ Hamilton Biographer Ron Chernow wrote: “After doing the intellectual spadework for government promotion of manufactures, Hamilton listed all the products he wanted to promote, ranging from cooper to coal, wood to grain, silk to glass. He also enumerated policies, including premiums, bounties, and import duties, to protect these infant industries. Where possible, Hamilton preferred financial incentives to government directives. For instance, knowing that tariffs taxed consumers and handed monopoly profits to producers, Hamilton wanted them to be moderate in scale, temporary in nature, and repealed as soon as possible. He preferred bounties because they didn’t raise prices. In some cases, he even wanted lower tariffs – on raw materials, for instance – to encourage manufacturing. And to speed innovation, he wanted to extend patent protection to inventors and adopt the sort of self-protective laws that Britain had used to try to hinder the export of innovative machinery.”

“Hamilton’s report on manufactures in 1791...charted a program for industrial development that was bold, farseeing, national and practical; Gallatin’s report on internal improvements in 1808 proposed a boon to transportation, communications, and the economy that had the same qualities,” wrote Raymond Walters, Jr. “Adoption would avoid the waste and corruption characteristic of piecemeal and haphazard developments.”³⁷⁸ As always, Gallatin like Hamilton was a master of detail. Gallatin scholar L. B. Kuppenheimer wrote: “Following a careful summary of U.S. manufacturing output by sector, which revealed a total annual gross of $120 million, Gallatin proceeded to compare the United States and Europe with regard to domestic vs. export consumption. He concluded that the United States had achieved a comparable level of diversity in that its economy was consuming nearly as high a percentage of its manufacturing output as the older economies of Europe. Gallatin recognized that although the abundance of land was one of the nation’s greatest assets, it was also the leading impediment to the development of domestic manufacturing. The high ratio of land to population invariably resulted in low land costs, high labor costs, and a serious shortage of capital. Gallatin recognized that the deceptively alluring combination of cheap land and high demand for American produce resulted in a nation dangerously dependent upon Europe for manufactures.”³⁷⁹

Although both Treasury secretaries sought to promote manufacturing, Hamilton was a protectionist and Gallatin a free trader. Biographer John Austin Stevens observed that Gallatin “was the earliest public advocate in America of the principles of free trade, and an experience of sixty years confirmed him in his convictions.” According to Stevens, “It is certain that Mr. Gallatin was opposed to ‘protective’ revenue. His preference was for an ‘even’ duty on all imports.”³⁸⁰ Gallatin biographer L.B. Kuppenheimer wrote: “Although conceptually he favored free trade, Hamilton cautioned that as long as mercantilism existed anywhere in the world, free trade would be impossible, and the only way the United States could ensure its independence and prosperity was through the creation of a balanced economy.”³⁸¹ Chernow noted that as secretary of State, Jefferson could not “conceal his horror at the report, which called for an even more sweeping arrogation of power than had Hamilton’s bank. In one postbreakfast talk with Washington, Jefferson mentioned Hamilton’s latest position paper and wondered somberly whether Americans still lived under a limited government.”³⁸²

Taxes and Debt

During the country’s formative years, the limited revenue of the United States came from four sources: customs, direct taxes, loans and the sale of public lands. American finance in the 1780s was a nightmare of speculation, debt, paper money, populism, privilege, profits, America lacked structure. Having achieved freedom from England, most Americans weren’t sure what to do with it. Historian Forrest McDonald wrote: that “many public creditors suffered the absurd experience of having their farms sold for nonpayment of taxes that had been levied to pay them interest on their securities.” To pay the debts from the Revolution, sometimes such crushing taxes were imposed that the holders of the debt were penalized. McDonald wrote: “Within five years after the peace the vast majority of people in Connecticut had become archnationalists – not because of anybody’s arguments, nor even because of specific events, but simply because the state went so quickly and thoroughly to seed.”³⁸³ In addition to meeting current expenses, taxes were necessary to pay off the debt and principal from the Revolutionary War. Alexander Hamilton saw taxes as part of a wider financial strategy to promote the economic welfare of the new country. Thomas Jefferson saw taxes in a much more negative light. At the end of the Revolutionary War, the nation’s finances were a mess of foreign debts and domestic obligations. Historian Richard Brookhiser wrote: “Washington's wartime struggles to supply and pay his troops had made him a confirmed foe of weak credit and paper money, and Hamilton had come up with a detailed plan to put the country on a sound financial footing. Madison, however, did not want state debts assumed, and the House balked.”³⁸⁴ Hamilton submitted his “First Report on the Public credit” on January 14, 1790. Robert Morris, superintendent of finance in the last phase of the American Revolution, had anticipated Alexander Hamilton’s idea that the national debt was a political asset more than an economic liability.”³⁸⁵ Historian Forrest McDonald wrote: “The national debt, Robert Morris had preached, was the makings of a tangible web that could be spun to create a strong national government. Very well then, the republicans said – but only with actions, not with words – let them be dissolved. Increasingly the states were starting the process by assuming payment of interest and principal on the national debt. Now Congress could hasten things along: it established a Board of Treasury to replace the departed superintendent, and entrusted to it the task of auditing all claims so as to render them more easily abolished.”³⁸⁶

Like Morris, Hamilton wanted to manage the nation’s debt. Jefferson’s goal was to abolish it. According to Jefferson biographer Dumas Malone, President Jefferson’s “decision to advocate the prompt repeal of the internal taxes, when Gallatin was counseling delay, had a political coloration, but in this matter there was no real difference between the two men except with respect to timing. Gallatin believed that unless taxes were reduced, by this administration they never would be, and he recognized practical advantages in getting rid of all the internal taxes at one time, since the collection of a part of them would be disproportionately expensive. The policy as a whole was that of both men, and it reflected the convictions of both.”³⁸⁷ Jefferson and Gallatin both hated debt, taxation and spending. After Jefferson left the White House, he wrote Gallatin: “The discharge of the debt is vital to the destinies of our government...we shall never see another President and Secretary of the Treasury making all other objects subordinate to this.”³⁸⁸ Gallatin set the elimination of the nation’s $82 million debt as his principal goal upon taking office. He figured that it would take 16 years to extinguish the principal and interest if the government applied its resources rigorously to this task. Although Gallatin favored a reduction in taxes, he subordinated that goal to reduction of the debt. He postponed reduction in federal excise taxes in order to pay down the debt. In 1809, Gallatin wrote to Jefferson that he believed that “The reduction of the public debt was certainly the principal object in bringing me into office.”

When President Jefferson took office in 1801, debt was seven times the current budget of the federal government. John Austin Stevens wrote: “On December 18, 1801, Mr. Gallatin entered upon an examination of the time in which the total debt might be discharged, and showed that, by the annual application of $7,300,000 to the principal and interest the debt would in eight years, i.e., on January 1, 1810, be reduced (by the payment of $32,289,000 of the principal) to $45,592,739, and that the same annual sum of $7,300,000 would discharge the whole debt by the year 1817.”³⁸⁹ Historian Gordon S. Wood wrote: “Republicanizing the banking system may have become important to Jefferson, but shrinking the debt was far more crucial: it went to the heart of the Republicans’ conception of government.”³⁹⁰ Biographer Raymond Walters, Jr., observed: “The most significant financial principles Gallatin brought to the Treasury: the primary importance of systematically paying off the public debt; stringent economy in government expenditures, with especially large reductions for the Army and Navy; specific appropriations by the legislature; and scrupulous accounting to assure efficient administration of those authorized.”³⁹¹

Events interfered with the realization of Gallatin’s goal. Nevertheless, he so administered federal government finances that it was able to absorb the $15 million Louisiana Purchase with minimal disruption of his financial plan; he had a surplus of $2 million in federal coffers. He increased his appropriation for debt reduction from $7.3 million to $8 million annually. The rest of the cost of the Louisia Purchase was met by new bonds. Biographer Stevens wrote: “From January 1, 1791, to January 1, 1808, the debt had fallen from $75,169,974 to $57,023,192; during the first ten years it had increased nearly seven millions of dollars, in the last eight it had been diminished more than twenty millions and Louisiana had been purchased.”³⁹² It is ironic that despite Jefferson’s longtime opposition to foreign financing of U.S. government operations, most of the money for the Louisiana Ppurchase came from foreign bond holders, many of them English.³⁹³

Historian Henry Adams defined the difference between the views of Hamilton and Gallatin: “The one believed that if debt was not a positive good, it was a far smaller evil than the growth of French democracy; the other, that debt was the most potent source of all political evils and the most active centre of every social corruption. The Hamiltonian doctrine was that the United States should be a strong government, ready and able to maintain its dignity abroad and its authority at home by arms. Mr. Gallatin maintained that its dignity would protect itself if its resources were carefully used for self-development, while its domestic authority should rest only on consent.” The War of 1812 upset the Gallatin system. Henry Adams provided a late 19th century view of early American finance: “Certain it is that the system so long and ably maintained by Mr. Gallatin was rudely overthrown by the war of 1812, and overthrew Mr. Gallatin with it. Equally certain it is that the United States naturally and safely gravitated back to Mr. Gallatin’s system after the war of 1812, and has consistently followed it to the present time. The debt has been repeatedly discharged. Neither army nor navy has been increased over the proportions fixed by Mr. Gallatin and Mr. Jefferson. Commerce protects itself not by arms nor even by the fear of arms, but by the interests it creates. America has pursued in fact an American system, – the system of Mr. Gallatin.”³⁹⁴

The Bank of the United States

Alexander Hamilton was the father of central banking in the United States – at a time when banks themselves were scarce. “At the time of the organization of the National Bank by Hamilton, there were but three banks in the United States; the Bank of North America, the Bank of New York, and the Bank of Massachusetts,” noted historian John Austin Stevens.³⁹⁵ Hamilton had been an early student of banking and recognized that small private banks needed to supplemented by a national banking system. A growing country, he realized, required a growing financial system. Historian Vernon Louis Parrington wrote: "In developing his policies as Secretary of the Treasury he applied his favorite principle, that government and property must join in a close working alliance. The new government would remain weak and ineffective so long as it was hostile to capital, but let it show itself friendly to capital, and capital would make haste to uphold the hands of government....The key to the problem lay in the public finance, and the key to a strong system of finance lay in a great national bank."³⁹⁶

A decade before he became Treasury Secretary, Hamilton had advocated the creation of a national bank. Historian Nathan Schachner wrote: “As far back as 1779, when Hamilton was only a youth of twenty-two, he had written a famous letter to General [John] Sullivan on the subject of a national bank. And, during the intervening years, he had never once permitted the subject to die. In letter after letter, in address after address, in private conversation and in public debate, in Continental Congress and in Federal Congress, he had insisted unweariedly that a bank underwritten by and partially controlled by the national government was the fundamental basis for a successful system of finance.”³⁹⁷ Hamilton biographer Louis Hacker wrote: “An enlarged circulation medium, convertible into specie on demand, was sorely required, for both public and private purposes. The government, dependent as it was upon a meager supply of gold and silver, notably felt the lack of currency for its daily needs and to transfer about the country.”³⁹⁸ Hamilton understood that a new federal bank could serve both important governmental and commercial purposes. In his report on banking, he explained both the theory behind the bank’s operation and the practice he proposed for its funding and operation. He understood that the bank would play an important role in filling gaps in the government’s revenue and an important role in providing credit for agriculture, manufacturing and trade.

Hamilton thought he would have a reliable ally in James Madison as he pursued his nationalist growth agenda. Madison, braced by his rejection as Virginia’s senator and his hotly contested election to Congress, was moving in a different direction. Historian Richard Norton Smith wrote: “Traditional accounts of what happened next have Madison, after a careful review of Virginia’s election returns, reversing his earlier nationalism and opposing the bank with the tortuous argument that Congress had no expressly delegated power to charter such an institution. Jefferson advanced similar claims within the president’s official family, swaying an executive whose scrupulous regard for constitutional niceties exceeded his economic sophistication.”³⁹⁹

During the 1780s, Hamilton had continued his study of British economics. Jefferson biographer Claude G. Bowers wrote: “His rare familiarity with the principles of finance, the history of banking, and the banking experiences of nations made his ‘Report [on the Bank]’ a persuasive document. Its adoption was as inevitable as its submission.”⁴⁰⁰ Hamilton biographer John C. Miller wrote of Hamilton: “Thanks to his wide reading – he had thoroughly covered the ground from the mercantilists to Adam Smith – the Secretary of the Treasury was well qualified to instruct his countrymen in the intricacies of public finance. In this report, as in his earlier Report on Public Credit, he endeavored to anticipate and to answer the objections likely to be raised against his plan and to supply his supporters in Congress with an impressive array of facts, figures and arguments in its favor.”⁴⁰¹

There was a unity to Hamilton’s vision. “Hamilton realized – long in advance of his time – the combined roles of the Treasury and a national bank, the coordination of the money and the credit functions, as great stabilizing agencies,” wrote biographer Louis Hacker.⁴⁰² Biographer Forrest McDonald wrote:”The plan was almost poetic in its beauty and symmetry. Though at the outset the bank would have only $500,000 in hard money, not counting the deposits it attracted, it could safely issue notes and take on other obligations up to $10 million, as if it had that much in cash; and it was virtually certain to earn wholesome profits, for the interest on its loans, at 6 percent, would be augmented by the additional 6 percent it received on the government bonds that formed most of its capital.”⁴⁰³

As an advocate for the bank’s creation, Hamilton had to face down two sets of opponents. The first were in the House of Representatives, where Virginia Congressman James Madison opposed it strictly on constitutional grounds. The second were fellow Cabinet members whom President Washington asked to write memos about the bank’s wisdom and constitutionality. Congressman Madison and Secretary Jefferson led the fight against the bank – Madison on the House floor and Jefferson in the Cabinet. Madison wrote that “reviewing the Constitution...it was not possible to discover in it the power to incorporate a bank.”404 Attorney General Edmund Randolph and Secretary of State Jefferson both supported a veto of the bank legislation. President Washington turned to Hamilton to justify his work. Hamilton wrote a long and comprehensive memorandum to President Washington, defending his interpretation of the “necessary-and-proper” clause of the Constitution. Hamilton articulated a fundamental constitutional principle when he wrote that “it appears to the Secretary of the Treasury that this general principle is inherent in the very definition of government and essential to every step of the progress to be made by that of the United States: namely that every power vested in a government is in its nature sovereign and includes by force of the term a right to employ all the means requisite and fairly applicable to the attainment of the ends of such power.”⁴⁰⁵ Historian Gordon S. Wood wrote: “Hamilton...carefully refuted the arguments of Randolph and Jefferson and made a powerful case for a broad construction of the Constitution that resounded through subsequent decades of American history.”⁴⁰⁶ The night Hamilton wrote out his response to President Washington, the Treasury secretary’s wife recalled him saying: “We must have a bank.”⁴⁰⁷ Historian Gordon S. Wood wrote that Hamilton “could not help assuming the exasperated tone of the sophisticated Wall Street lawyer explaining the intricacies of banks and credit to country bumpkins.”⁴⁰⁸ Historian John Steele Gordon wrote: “Hamilton’s complete response to Jefferson and Randolph runs nearly 15,000 words and was written under an inflexible deadline, for the Constitution required President Washington to sign or veto the bill within ten days of its passage. Hamilton thought about his response for nearly a week but seems to have written it entirely in a single night. To read it today is to see plain the extraordinary powers of thought he possessed.”⁴⁰⁹ Hamilton biographer Ron Chernow wrote: “Hamilton lent his opinion the erudition of a treatise and the warmth of a manifesto. The essence of it was that government must possess the means to attain ends for which it was established or the bonds of society would dissolve. To liberate the government from a restrictive reading of the Constitution, Hamilton refined the doctrine of ‘implied powers’ – that is, that the government had the right to employ all means necessary to carry out powers mentioned in the Constitution.”⁴¹⁰ Hamilton argued: “It is not denied that there are implied as well as express powers, and that the former are as effectually delegated as the latter....Then it follows, that as a power of erecting a corporation may as well be implied as any other thing, it may as well be employed as an instrument or means of carrying into execution any of the specified powers, as any other instrument or means whatever....”411 Historian Forrest McDonald wrote that “the president had to take a stand, and the stand he took made Jefferson’s position in the cabinet untenable. It also added a new dimension to the presidency; henceforth the president was not only chief executive and chief administrator, but head, at least in a titular and symbolic sense, of his party as well. Washington despised and resisted the role, but he could not avoid it.”⁴¹²

As Treasury secretary a decade later, Albert Gallatin supported the bank over the strenuous and continuing opposition of President Thomas Jefferson. Historian Thomas K. McCraw observed that in his 1796 Sketch, “Gallatin argues, banks are essential, especially in a new country located far from capital markets and with little gold and silver of its own. Rather than objecting to banks per se – he had been familiar with them in Geneva before he emigrated and in the state legislature had helped to charter the Bank of Pennsylvania – he finds fault with the way Hamilton capitalized the Bank of the United States.”⁴¹³

President Jefferson took a very different view. He repeatedly tried to interfere with the system that Hamilton had developed – even if he couldn’t destroy the bank itself. He suggested to Gallatin that federal assets be distributed among state banks. At another point, he suggested “making all the banks Republican by sharing deposits among them in proportion to the dispositions they show.”⁴¹⁴ Historian Gordon S. Wood wrote: “It was the proliferation of these state-chartered banks and their issuing of notes that enabled the states to have paper money after all – despite the Constitution’s prohibition in Article I, Section 10 against the states themselves issuing bills of credit.”⁴¹⁵

Gallatin understood that the bank was an important national asset – even if Jefferson didn’t. He reported to Congress: “The affairs of the Bank, considered as a moneyed institution, have been wisely and skillfully managed.”⁴¹⁶ Gallatin biographer Raymond Walters, Jr., wrote: “The Bank was so useful to the Treasury that a year later, when the President suggested that the government guard against letting it obtain an ‘exclusive monopoly’ of the nation’s banking business, Secretary Gallatin pointed out that it was ‘not proper to displease’ the directors of the Bank, ‘because they place instantly our money where we may want it, from one end of the Union to the other, which is done on the tacit condition of our leaving our deposits with them, and because if we shall be hard run and want money, to them we must apply for a loan.”⁴¹⁷

Jefferson was unmollified. Biographer L.B. Kuppenheimer noted: “Gallatin spoke out in defense of the bank from the earliest days of the administration. In 1803, he was even able to convince Jefferson to accept a branch in New Orleans, arguing that with acquisition of the lands west of the Mississippi, the transmission of money from lands sales and impost taxes would not only speed the collector’s work but render it safer as well.”⁴¹⁸ In replying to Gallatin’s suggestion that a bank branch be established at New Orleans, Jefferson rejected the idea and clearly indicated that there were limits of his tolerance for an institution which “is one of the most deadly hostility existing against the principles and form of our Constitution.”⁴¹⁹ Gallatin prevailed – writing Jefferson: “I am extremely anxious to see a bank at New Orleans; considering the distance of that place, our own security and even that of the collector will be eminently promoted, and the transmission of moneys arising both from the impost and sales of lands in the Mississippi Territory would without it be a very difficult and sometimes dangerous operation. Against this there are none but political objections, and those will lose much of their force when the little injury they can do us and the dependence in which they are on government are duly estimated. They may vote as they please and take their own papers, but they are formidable only as individuals and not as bankers. Whenever they shall appear to be really dangerous, they are completely in our power and may be crushed.”⁴²⁰

Financial historian Jerry Markham wrote: “The Bank of the United States was the premier bank in America at the beginning of the nineteenth century...As a whole, the bank 'was conservatively managed, and did not issue its notes excessively, nor in denominations below ten dollars. The bank was, in short, a successful, sound and responsible institution that was doing much to place American finance on a sound footing. With five years after the first Bank of the Untied States began operations, 'the United States had the highest credit rating in the world and a reliable money supply was fueling prosperity from Boston to Savannah.'"⁴²¹ Hamilton, however, had left in place a poison pill that doomed the continuation of the Bank of the United States. Historian Gordon S. Wood wrote that though Gallatin “persuaded the reluctant president to keep the bank of the United States, the governments was under continual pressure to reduce the Bank’s influence, especially from state banking interests. When the Bank of the United States was chartered in 1791, there were only four state banks; but since then their numbers had grown and were continuing to grow dramatically, twenty-eight by 1800, eighty-seven by 1811, and 246 by 1816. Despite the hopes of some Federalists that the branches of the BUS might absorb the state banks, that had not happened.” Wood wrote: “By regularly redeeming the outstanding notes of the state banks, the BUS had checked their ability to issue notes too far in excess of what they could cover with specie, that is, their reserves, and this had become a deep source of anger....When the twenty-year charter of Hamilton’s BUS was about to expire in 1811, it was not surprising that these state banks were determined that it would not be renewed.”⁴²²

Gallatin understood the practical benefits of the bank in providing flexibility and resources to the government’s finances. According to biographer John Austin Stevens, “The advantages derived by the government Mr. Gallatin stated to be, 1, safekeeping of the public moneys; 2, transmission of the public moneys; collection of the revenue; 4, loans.”⁴²³ Henry Adams wrote that Gallatin “looked on the bank as an instrument that could not be safely thrown away; without it his financial operations would be much more slow, more costly, more hazardous, and more troublesome than with it; indeed, he was quite aware that its fall would necessarily be followed by much financial confusion, and he had no mind to let such experiments in finance come between him and his great administrative objects. He was, therefore, by necessity a friend and protector of the bank.”⁴²⁴ While Gallatin saw the Bank as a fiscal tool, President Jefferson saw the banking system as a political tool. Jefferson wrote: “I am decidedly in favor of making all the banks republican, by sharing deposits among them in proportion to the [political] dispositions they shew. If the law now forbids it, we should not permit another session of Congress to pass without amending it. It is material to the safety of republicanism to detach the mercantile interest from it’s enemies and incorporate it into the body of it’s friends. A merchant is naturally a republican, and can be otherwise only from a vitiated state of things.”⁴²⁵

Historian Joseph Ellis observed: “Gallatin was able to persuade [Jefferson] that the national bank and the customs collectors should be spared; they actually facilitated debt reduction; in modern parlance, they were ‘cost-effective.’ Jefferson reluctantly agreed. ‘It mortifies me to be strengthening principles which I deem radically vicious,’ he complained, but Gallatin was probably right ‘that we can never completely get rid of his [Hamilton’s] financial system.’”⁴²⁶ Only when Gallatin pressed his case did Jefferson reluctantly yield. Gallatin noted that Jefferson “died a decided enemy to our banking system generally, and specially to a bank of the United States.”⁴²⁷ According to biographer John Austin Stevens, “Mr. Jefferson detested or feared the aristocracy of money, while Gallatin, with a clearer insight into commercial and financial questions, recognized that in a young country where capital was limited, and specie in still great disproportion to the increasing demands of trade, a well-ordered, well-managed money institution was an enormous advantage, if not an imperative necessity to the government and the people.”⁴²⁸

Renewal of the Bank of the United States

The Bank survived the Jefferson Administration, but its enabling legislation came up for renewal in the Madison Administration twenty years after the original charter in 1791. Historian John Austin Stevens wrote: “The national bank, and the system of internal taxation which had been scorned by Jefferson and Madison as unconstitutional, were accepted actually under Madison’s administration. Gallatin’s success, owing to the development and application of Hamilton’s plans, was a complete vindication of the theory and practice of the Federalists which they abhorred; Jefferson’s plan of a government issue of paper money was a higher flight into the upper atmosphere of implied powers than Hamilton ever dreamed of..”⁴²⁹ In 1809 Treasury Secretary Gallatin came to the bank’s defense in his “Report on the Bank of the United States.” According to Kuppenheimer, “His plan contained answers to all the major objections his fellow Republicans had against the idea of a central bank. For example, he would have both the national government and the states appoint the directors, thus giving broader regional representation in the management of the bank. In answer to Jefferson’s concern regarding the ability of the bank, through its control of credit, to exercise rival power by threatening to withhold credit to the government, Gallatin suggested the bank be required to lend the government up to three-fifths of its capital. In addition, both the interest rate charged to the government as well as the maximum amount of monthly payments would be capped. Jefferson’s fear over the danger of foreign ownership was also addressed by means of a special stock subscription to be available only to U.S. investors, with the proceeds to be used specifically for the repurchase of the foreign stock.”⁴³⁰

Gallatin’s proposed reforms of the bank fell on deaf congressional ears and lethargic presidential ears. Madison was not as politically courageous or wise as Gallatin – even though the president’s support would have saved the bank from extinction. Madison biographer Garry Wills wrote: “The struggle was so close that Madison’s active campaigning for the bank would have saved it. Instead, he hoped to influence the course of the debate by the backstage tactics of his legislative days.”⁴³¹ Biographer John Austin Stevens wrote that “with the dead weight of Mr. Madison’s silence, if not indifference, the struggle was unequal and the bank fell. The course of Mr. Madison can hardly be excused. Political history records few examples of a more cruel desertion of a cabinet minister by his chief. Mr. Gallatin felt it deeply and tendered his resignation. The administration was going to pieces by sheer incapacity. The leaders took alarm and the cabinet was reconstructed, Monroe being called to the Department of State. But the enemies of Mr. Gallatin still clung to his skirts, determined to drag him to the dust.”⁴³²

President Madison was torn in too many directions to do what the national economy required. According to Madison biographer Garry Wills, “By 1811, Madison had changed his mind on the bank though he did not want to make an open break with Jefferson on the issue. He privately assured people that his arguments against the bank, though sound at the time, had been rendered inapplicable by long usage.”⁴³³ Madison biographer Irving Brant observed: “As Congress approached sine die adjournment early in 1811, new attacks burst on Gallatin. The Bank of the United States had three months to live when he renewed the attempt to extend its charter. His arguments for it were sound, and the President was in accord with them....Vice President [George] Clinton killed the renewal by breaking a tie. Clinton gave a reason drawn from Madison’s 1791 speech against the bank: the power to create corporations was ‘a high attribute of sovereignty,’ not to be planted in the Constitution by implication. Gallatin translated this into political English: Clinton hoped that a smashing defeat of Gallatin would react against Madison and open the 1812 presidential race to himself...Robert Smith had similar objectives.”⁴³⁴

Gallatin biographer John Austin Stevens wrote that “with the dead weight of Mr. Madison’s silence, if not indifference, the struggle was unequal and the bank fell.”⁴³⁵ In February 1811, the charter of the United States Bank was ended by congressional inaction. It was a devastating blow to the finances of a country on the brink of war. Jeffersonians who might have been rallied by President Madison abandoned the Administration. Stevens wrote: “Gallatin in his combinations never contemplated such a contingency as the total destruction of the fiscal agency on which the government had relied for twenty years. Unwilling to struggle longer against the mean personalities and factious opposition of his own party in Congress, he tendered his resignation to Mr. Madison. But the Republican party was a party of opposition, not of government. With the exception of Mr. Gallatin, no competent administrative head had as yet appeared.”⁴³⁶ Already, Gallatin had stayed at Treasury two years longer than planned. Gallatin was still forced to remained at Treasury.

As a result of the Bank’s closing, the Republicans were forced to use the direct taxes they abhorred in order to finance the government – and the upcoming War of 1812. Biographer John Austin Stevens wrote that “the prime mover, if not the original author, of the opposition to Hamilton’s system was driven to propose the renewal of the measures, opposition to which had brought the Republican party into power, and had placed himself at the head of the Treasury.”⁴³⁷ Historian Garry Wills argued: “The troubles Gallatin predicted if the bank were abolished came true in the War of 1812, when funds to wage it had to be sought from taxes and from reluctant lenders at ruinous rates – both of them sources that Republicans abominated. In Madison’s seventh annual message to Congress, in 1815, he would say that ‘the benefits of an uniform national currency should be restored to the community...the probable operation of a national bank will merit consideration.’ This closed the costly circular motion away from and back to a bank that was never more needed than when it was absent.”⁴³⁸ Finally in the midst of war, even Madison realized that public support for a bank was necessary and Congress approved a Second Bank of the United States in 1816.

Gallatin’s support for and defeat of the Bank certainly added to the abuse to which he was already subjected from fellow Republicans. Biographer John Austin Stevens wrote: “It was charged upon Gallatin that his friends considered him as the real, while Madison was the nominal, president. More than this, he was accused of embezzlement and enormous speculations in the public lands. Gallatin’s party pride must have been strong indeed to have induced him to stay an hour in an administration which granted its favors to the author of such assaults upon one of its chosen leaders.”⁴³⁹ Much of the political abuse against Gallatin was directed through the pages of the Philadelphia Aurora, whose Republican editor later attacked “the Genevan”: “We can say with perfect conviction that, if Mr. Madison suffer this man to lord it over him, Mr. Gallatin will drag him down, for no honest man in the country can support an administration of which he is a member with consistency or a pure conscience.”⁴⁴⁰

Although Secretary of State Robert Smith eventually left the Cabinet, Gallatin’s trials were hardly lessened with the onset of the War of 1812. “Financial affairs now occupied his entire attention; on the one hand was a diminishing treasury; on the other an expenditure reckless in itself and beyond the demands of the administration. Without the sympathy of either the Senate or House, Mr. Gallatin’s position became daily more irksome, until at last he abandoned all attempt to control the drift of party policy, took the war party at their word, and sent in to the House a war budget.” Stevens observed: “The wide spread of the state bank system, with its irresponsible and unlimited issues, occurring subsequent to Mr. Gallatin’s withdrawal from the Treasury, was a consequence of the failure to renew the charter of the Bank of the United States; and if ever there were a system by which the inhabitants of States whose floating capital was small were placed at the mercy of moneyed corporations of the States where it was abundant, it was the state bank system.”⁴⁴¹ In Volume VII of his seven-volume History of the Republic of the United States of America as Trace in the Writings of Alexander Hamilton and of his Contemporaries,” Hamilton’s son, John Church Hamilton wrote of the demise of the Bank of the United States:

“The apprehended misfortunes, "human wisdom did not avert," for of human wisdom there was little in the Democratic councils to interpose; and Divine wisdom leaves perverse folly to its fate. "Misfortunes" soon came thick. The parsimonious economy, which was to pay off the national debt in eighteen years, produced, by the restrictions on commerce, an estimated annual loss to the United States of Fifty millions of dollars. The "peaceable means" of Jefferson led to a war which augmented the public debt more than sixty millions. These evils, great as they were felt to be at the time, were the lesser evils resulting from the early improvident, and unmanly Democratic policy. This great, this enduring evil has resulted. —The equipoises of the Constitution scarcely exist. The war forced upon Madison's timidity proved the utter weakness of the prevailing system. Defeat and disgrace attended the unprepared, suddenly collected levies. Jealousies from suspicions of governmental favoritism divided the first incompetent commanders. A void treasury sought relief from a direct tax, which could not be collected by the General Government, and was assumed by some of the States. Burdensome loans piled upon each other, told, in their terms, the discredit of the Administration, while a disordered currency and almost universal bankruptcy pointed back to the days when Hamilton's vigor marked every act of the Government, and public confidence rewarded its parental cares. The young life of the nation outgrew all this, but as it grew the Executive office became less and less in true dignity and power. Jefferson had conceded them away, by his abject submissions to the fluctuations of the popular will; and these fluctuations have raised successively to office those who have adopted his maxim as their rule, that it is the duty of the Government, at any cost of principle or of policy, to please the people. Their temporary will has become the law of the moment, while that measured, salutary, prospective, provident will, the essential, noblest characteristic of man as an individual and of nations in their head, no longer is known. Thus it is, that while this page is written, a formidable Rebellion exists, requiring for its suppression all the energies and resources of the nation, which a timely, energetic exertion of the powers of the Government could have subdued in a month. Stern realities are now uttering themselves aloud, and one voice is heard – ‘had Hamilton’s views prevailed the crisis could not have taken place.’”⁴⁴²

The Second Bank of the United States lasted until 1833 when Secretary of the Treasury Roger B. Taney removed all the federal government’s deposits, effectively strangling it. Gallatin thought that both President Andrew Jackson and Bank of the United States President Nicholas Biddle both behaved badly in the crisis that precipitated that bank’s closing. They used economic policy as a weapon in a personal and political vendetta. According to biographer Raymond Walters, Jr., Gallatin thought that Biddle “actually wanted to create a financial panic that would oblige the Jackson Administration to haul up the white flag in its war on the Bank.”⁴⁴³ As a bank president in New York in the 1830s, Gallatin strove to restore financial stability and retain specie payments by banks in the 1837 financial panic.

Manufacturing, Tariff and Trade

Although both Treasury secretaries sought to promote manufacturing, Alexander Hamilton was a protectionist and Albert Gallatin a free trader. Biographer John Austin Stevens observed that Gallatin “was the earliest public advocate in America of the principles of free trade, and an experience of sixty years confirmed him in his convictions.” According to Stevens, “It is certain that Mr. Gallatin was opposed to ‘protective’ revenue. His preference was for an ‘even’ duty on all imports.”⁴⁴⁴ Hamilton biographer John C. Miller wrote that Hamilton “contended that the interests of agriculture, commerce and manufacturing were indissolubly united and that measures which directly benefited on indirectly benefited the others. But he never departed from the position he had taken in 1790 – that since commerce and manufacturing had been far outstripped by agriculture, the attention of the government ought to be chiefly directed toward stimulating the lagging branches of the economy.”445 Historian Vernon Louis Parrington wrote of Hamilton: "In his understanding of credit finance and the factory economy, he grasped the meaning of the economic revolution which was to transform America from an agrarian to an industrial country; and in urging the government to further such development, he blazed the pat that America has since followed.”⁴⁴⁶

Historians Stanley Elkins & Eric McKitrick wrote: “The opening phase of debate on the Tariff of 1789 was somewhat misleading. It concerned the nature and amount of import duties – the tonnage aspect would come later – and it was characterized by some colorful oratory and a good many sharp words. And yet this phase, for all its warmth, was more like a kind of bargaining forum than a basic struggle over first principles. It was contained; the boundaries were more or less clear; the objects and interests were immediate and measurable; and there was a minimum of hard feelings.”⁴⁴⁷ Historian Gordon S. Wood wrote: “Congress’s first tariff act of 1789 listed a number of goods for protection, including beer, carriages, cordage, shoes, sugars, snuff, and tobacco products. Yet most of the manufacturers soon became dissatisfied with the government’s measures, believing that the duties levied on foreign imports were too low and not sufficiently protective of their businesses. Secretary of the Treasury Hamilton seemed more interested in producing revenue to finance the federal debt than in offering protection to mechanics and manufacturers. Hamilton of course, did not foresee the future any better than the other Founders; but by not supporting artisans and manufacturers, who were the budding businessmen of the future, he made his biggest political mistake. It cost the Federalists dearly.”⁴⁴⁸ Historians Stanley Elkins and Eric McKitrick wrote: “The Tariff of 1789, in short, was mildly protective, in the sense that most interests with a reasonable claim to protection received at least a token of it, consistent with the government’s claim to revenue.”⁴⁴⁹

Both Hamilton and Gallatin understood the importance of a diverse and expanding economy. Historian Gordon S. Wood wrote: “Hamilton’s final report on manufactures, completed in December 1791, laid out what a century later looked like prescient plans for industrializing the United States. Some historians have described this as his most creative and powerful proposal. But others have been less excited; some have even gone so far as to suggest that, unlike his interest in the other parts of his financial program, his heart was never really in manufacturing. He certainly took his time in writing it. As early as January 1790 the House of Representatives had directed Hamilton to ‘prepare a proper plan...for the encouragement and promotion of such manufactories as will tend to the United States independent of other nation for essential, particularly for military, supplies.’ Nearly two years later he completed it, with considerable help from Tench Coxe of Pennsylvania, whom Hamilton had appointed assistant secretary of the treasury in May 1790.” Wood wrote that “in 1791 Hamilton knew that realizing this vision would take time, three or four decades at least. Meanwhile, there were more pressing needs. Consequently, to fulfill the long-term development of manufacturing Hamilton made only some modest recommendations: some moderate protective tariffs for instant industries, bounties for the establishment of new manufacturing, prizes to encourage inventions, and exemptions from duties of some raw materials imported from abroad.”⁴⁵⁰

Hamilton biographer John C. Miller wrote: “To supplement Coxe’s survey of the manufacturing potential of the United States, Hamilton instructed the Treasury agents – collectors of the customs, supervisors, and the rest – to examine and report upon the progress of manufactures in their locality. Since, in many cases, they compiled their accounts from information gained from interviews with businessmen and from personal inspections of factories, Hamilton’s report offered an authoritative survey of the state of American manufacturing in 1791.” Miller wrote that “on the basis of the facts and figures received by the Treasury, Hamilton concluded that the United States had hardly done more than scratch the surface of its boundless potential as a manufacturing country.”⁴⁵¹ Hamilton biographer Nathan Schachner noted: “The House pigeon-holed the Report on Manufactures and did nothing about it. But in the long run Hamilton’s vision – in this respect – proved truer than Jefferson’s. An inexorable logic moved the nation steadily along the lines of industrialization.”⁴⁵² Hamilton was ahead of his time, but not by much. Historian Thomas K. McCraw noted that Hamilton observed “in the most prescient sentence in his entire Report, that skilled immigrants ‘would probably flock from Europe to the United States to pursue their own trades or professions, if they were once made sensible of the advantages they would enjoy.’ He had already taken steps to induce what he called ‘artificers’ (master craftsmen) to emigrate from the Old World to the New.”⁴⁵³

Hamilton appealed to self interest and greed in his economic policies. Hamilton biographer John C. Miller wrote that “Hamilton saw nothing to be gained by appealing to patriotism, altruism or magnanimity. Such sentiments were too rare and insubstantial, in Hamilton’s way of thinking, to serve as the springs of action for any group of men, let alone capitalists. As he saw it, self-interest alone could impel men to action and self-interest had to be spelled out for them by those who understood it better than they themselves.” Miller wrote that Hamilton “envisaged a highly competitive economy in which a large number of businessmen, by virtue of their rivalry, would bring down price ‘to the minimum of a reasonable profit on the capital employed’ and thereby protect the community against monopolistic practices.”⁴⁵⁴

The Report on Manufacturing “was economically more important than any of its predecessors, but it had no immediate results,” noted Hamilton biographer Henry Cabot Lodge. “Congress had already discussed the question vaguely, and had done something to favor home production and American commerce. The question of protection or free trade was constantly in men’s minds, but a system was of slow growth. Hamilton pointed to the road to be followed, and other men traveled in it, among the first Jefferson and Madison with their plan of ‘allowances’ for the fisheries, while at the same time they denounced the theory, its author, and all his works, including ‘protection and bounties.’ Hamilton marked out clearly and fully a plan of the development of industry, trade, and commerce. He turned the current of thought, he influenced the future, but the task was too mighty, the scheme was too vast to be carried out at once, or in fact otherwise than piecemeal, although its suggestion was a fit termination to the great work which he had accomplished.” Lodge observed:

The criticisms which have been made on this famous series of measures have been various and contradictory. It was said at the time that Hamilton made the debt too permanent, but on the other hand it was also urged that he was putting too great a burden on the people, and the shorter the loan, the great the immediate burden. In this he observed a just mean and a wise moderation. The unexpected rate of growth in the country showed afterwards that the debt might have been paid more rapidly, but at the moment Hamilton’s anticipations of revenue were generally regarded as absurdly sanguine. The most forcible criticism, which was made either then or since, was that the financial policy was too strong, that it put too great a strain upon the infant experiment, ventured too much, ran too great a risk, and came near causing shipwreck. Hamilton reasoned that, if his financial policy could be made successful, a good national government might be built up, and that if it proved too strong and the new system gave way, then the Constitution was not worth preserving.⁴⁵⁵

In late 1791, Treasury Secretary Hamilton helped set up the Society for Establshing Useful Manufactures (SEUM), which tried to establish a model manufacturing center in Paterson New Jersey. In November, the ill-fated SEUM was founded at a meeting New Brunswick; the ill-fated William Duer was named governor of the enterprise. Biographer Forrest McDonald wrote that “for obtaining the necessary corporate [charter], Hamilton thought almost every state would be eager to grant one, but that New Jersey would probably be the most desirable location. It had an abundance of cheap and easily tapped water power at the falls of the Passaic; it was thickly settled and had access to cheap provisions and raw materials; it had neither extensive commerce nor vacant frontier lands to be peopled and thus could feel ‘no supposed interest hostile to the advancement of manufactures.’”⁴⁵⁶ John C. Miller wrote of the choice of New Jersey that with its “cheap and abundant supplies of food and water power, rich in minerals (the Schuyler family owned copper and silver mines), and without commerce or western lands to serve as distractions to factory workers, he thought that manufacturing could be carried on under the closet approximation to ideal conditions that were to be found in the United States. Besides, the proximity of Paterson to New York and Philadelphia was expected to attract the investment capital of these cities to the new city. In this village, Hamilton declared, there was ‘a moral certainty of success’ in the manufacturer of such articles as paper, sailcoth, linen, cotton cloth, shoes, thread, stockings, pottery, ribbons, carpets, brass and iron ware.”⁴⁵⁷ Less morally certain was the selection of Duer by Hamilton. Historian Thomas Fleming wrote: that Hamilton “asked Duer to become its governor and chief salesman, even though Duer had mishandled his government accounts, occasionally using Treasury warrants to cover his private speculations and generally leaving his books a mess. Already regarded as a man with a golden touch, Duer easily raised $600,000 in a stock offering to capitalize the S.U.M.”⁴⁵⁸

William Duer was a triple embarrassment to Hamilton. First, Duer had leaked information about Hamilton’s plan for assumption of the national debts from the Revolutionary War and mishandled the Treasury’s accounts. Second, after resigning as assistant secretary of the Treasury, Duer led an orgy of speculation on bank stocks that led to Duer’s incarceration in debtors’ prison in New York City. Third, Hamilton relied on Duer to organize the Society for Establishing Useful Manufactures shortly before Duer’s (and that of many New Yorkers) came crashing down. Nathan Schachner wrote: “the crash of Duer and other financiers brought panic to the money markets, internal dissensions hamstrung the venture almost from the start, and the subscribers began to default in their installments on the stock.”⁴⁵⁹ Nathan Schachner wrote that Hamilton “stood by him steadily to the end, helping him in every way he could. And even though Duer never made any complete accounting to the government, somehow or other the suits instituted against him by Wolcott subsided and died from lack of prosecution.” Schachner wrote that “in spite of Hamilton’s somewhat blunted perceptions of public morality when it came to his friends, he was sensitive to a peculiar degree when his own personal affairs were involved. In all the orgy of speculation, when he might have made a considerable fortune from his personal knowledge of the turn of events, he remained poor.”⁴⁶⁰ Historian Forrest McDonald wrote: “By the fall of 1792 both financial and commercial affairs were settling down, but the whole episode was a crushing blow to the proud Hamilton.”⁴⁶¹

In the wake of Duer’s imprisonment, noted Hamilton biographer John C. Miller, Hamilton took “direction of the Society’s affairs. His energy and organizational ability were manifested on every side: for the first time, things began to hum along the Passaic. [Pierre] L’Enfant, who had been commissioned to draw the plans for the new federal capital on the Potomac, was hired to lay out ‘the capital scene of manufactures’ on the Passaic; buildings were erected and machinery installed; and skilled workers were brought in to operate these newfangled devices. Hamilton personally inspected the sites selected for the various factories, paying special heed to the effective utilization of water power; and on at least one occasion he advanced money out of his own pocket for machinery. More fortunate than some who entrusted their money to the Society, Hamilton got his back.”⁴⁶² Historian Thomas K. McCraw noted that SEUM’s Paterson venture “failed...because the requisite investment capital, supply of artisans, and management expertise did not yet exist in the United States. The basic idea, however, ultimately succeeded. By 1820, the city of Paterson had become one of the leading industrial centers in the country.”⁴⁶³

Hamilton was ahead of his time. And sometimes, he was wrong. During the 1790s, some Federalist taxation polices had actually inhibited manufacturing and alienated potential supporters of their party. Historian Gordon S. Wood argued: “Not only did the Federalists refuse to levy heavy protective tariffs, but they began taxing the artisans’ products directly. When in 1794 Hamilton and the Washington administration resorted to placing excise taxes on American goods, artisans and manufacturers, especially in the Mid-Atlantic States, became alarmed. The federal government initially taxed snuff, refined sugar, and carriages, and implied that excise taxes on other goods might follow. In Philadelphia, large-scale manufacturers of tobacco and sugar organized a protest of hundreds of artisans and tradesmen and sugar organized a protest of hundreds of artisans and tradesmen against the excise taxes in May 1794. The federal excise taxes directly affected 15 percent of the manufacturers argued that these ‘infant industries’ needed the ‘fostering care of government and condemned the excise taxes as unrepublican. Instead of taxing industry and the new kind of entrpreneurial property that was emerging, the government, they argued, ought to be taxing landed and proprietary wealth.”⁴⁶⁴

It was Gallatin who was secretary of the Treasury when manufacturing began to boom. Historian Gordon S. Wood wrote: “As early as 1799 Congressman Albert Gallatin had recognized that Americans had become commercially and socially different from the former mother country. In Britain, he told the Congress, the different trades and occupations were ‘so well distinguished that a merchant and a farmer are rarely combined in the same person; a merchant is a merchant, and nothing but a merchant; a manufacturer is only a manufacturer; a farm is merely a farmer; but this is not the case in this country.’ In America, by contrast, ‘the different professions and traders are blended together in the same person; the same man being frequently a farmer and a merchant and perhaps a manufacturer.’”⁴⁶⁵

Hamilton biographer John C. Miller wrote: “Hamilton’s plans for the national economy were an application to this country of Adam Smith’s concept of an international economy in which each country produced the commodities for which it was best adapted, thereby fulfilling the designs of Nature. Instead of nations, Hamilton dealt with sections; but just as Adams Smith’s principles tended to make Great Britain the workshop of the world, so Hamilton’s ideas would have made the North the workshop of the union.”⁴⁶⁶ The War of 1812 further stimulated manufacturing. Historian Walter A. McDougall wrote: “Manufactures, as [Henry] Clay predicted, took off during the war as entrepreneurs hustled to supply the domestic market and military with goods previously imported. Over 320 new factories (especially for metallurgy, chemicals, and textiles) were founded from 1812 to 1814 as compared to 114 over the decade preceding. The war’s stimulus induced the government to invest $1.8 million on roads and canals during the 1810s as compared to just $120,000 in the 1800s. New England did suffer a wrenching depression after 1815 when the British dumped $40 million of manufactures on the market. Many of the new cotton and woolen mills went out of business, throwing thousands of Yankees out of work. But Henry Adams exaggerated when he wrote of Massachusetts’ ‘ruin.’ Rather, the temporary slump just accelerated a ‘Yankee Exodus’ destined to fix an indelible New England stamp on the Midwest.”⁴⁶⁷

A strong domestic market was developed with time. Gordon S. Wood wrote: “America’s intense involvement in overseas commerce and the carrying trade between 1792 and 1805 – because of the Europeans wars – tended to mask what was happening commercially within the United States itself. While Americans were trading with places all over the world, they were also trading with one another and creating a continental marketplace. Suddenly, the vision some had had in the aftermath of Independence that Americans constituted ‘a world within ourselves, sufficient to produce whatever can contribute to the necessities and even the superfluities of life,’ was being realized.”⁴⁶⁸

Jefferson and Madison saw trade as a diplomatic weapon more than an economic benefit. The president deliberately undermined Monroe’s effort to negotiate a commercial treaty with Britain during Jefferson’s second term. “To tell you the truth, I do not wish any treaty with Great Britain,” Jefferson reportedly acknowledged. Historian Gordon S. Wood wrote: “But since the British went out of their way to conciliate the Americans on the issue of impressment, informally promising to observe ‘the greatest caution’ in impressing their sailors on American ships and to offer ‘immediate and prompt redress’ to any American mistakenly impressed, Jefferson felt pressured to find other objections to the treaty. What he particularly wanted to preserve was the right of the United States to retaliate commercially against Great Britain, the very thing the treaty was designed to avoid.”⁴⁶⁹ Wood wrote: “Although the commercial clauses gave Americans more advantages than they had under the Jay Treaty, the unwillingness of Jefferson and many other Republicans to give up the weapon of commercial warfare probably doomed any treaty from the start.”⁴⁷⁰ And Jefferson’s policies led to the 1808 embargo on British goods and indirectly to war with Britain in 1812. Jefferson’s anti-British sentiments undermined his own principles and objectives while failing to advance his program of agrarian development.

The Embargo

President Jefferson preferred to institute an embargo on U.S. trade in an effort to avoid war with Britain. Both British and French actions restricting transatlantic trade reduced the Jefferson Administration’s room to maneuver in late 1807. “An emergency meeting of the cabinet was called, and Jefferson recommended the adoption of a general embargo on all shipping, domestic or foreign, into or out of American ports. Gallatin was more than mildly opposed. Specifically he asked that foreign vessels be exempt because the amount they delivered was small in comparison to overall imports, and foreign retaliation against our shipping in their ports would seriously affect our merchants. Gallatin also urged the embargo be for a limited time only rather than for the unlimited terms expressed for two reasons: he felt it would be more palatable to Congress, and there were so many flaws in it as drafted, having a limit would allow an opportunity to revise it upon renewal without appearing to retract it,” wrote L.B. Kuppenheimer.⁴⁷¹ Jefferson biographer Noble E. Cunningham, Jr. wrote that “the final decision for an embargo was hastily made on December 17. All the cabinet was present and unanimously concurred in the recommendation to Congress. Gallatin soon had second thoughts, however, and sent the president a memorandum the first thing the next morning recommending changes before the proposal was sent to Congress. ‘An embargo for a limited time will at this moment be preferable in itself, and less objectionable in Congress,’ he told the president. ‘In every point of view, privations, sufferings, revenue, effect on the enemy, politics at home, etc., I prefer war to a permanent embargo.’”⁴⁷² Gallatin wrote Jefferson: “Governmental prohibitions do always more mischief than had been calculated; and it is not without much hesitation that a statesman should hazard to regulate the concerns of individuals as if he could do it better than themselves.”⁴⁷³ Cunningham noted: “Immediately upon receiving Gallatin’s note, Jefferson called him to his office so that they could discuss his message before it left his hands.”⁴⁷⁴ Nevertheless, the embargo passed Congress on December 22.

American commercial aspirations undermined Thomas Jefferson as president and provided his own “Whiskey Rebellion” moment in the wake of the embargo’s imposition. Historian Thomas K. McCraw noted: “Contrary to almost all expectations, the embargo continued not for a few weeks but for fifteen months, until Jefferson was about to leave office. During this long period, the embargo did not even begin to accomplish its purpose. It brought untold mischief and lawbreaking, and proved to be the biggest blunder of Jefferson’s presidency.”⁴⁷⁵ Gordon S. Wood wrote: “Jefferson finally had to proclaim the Canadian-New York border area in a state of insurrection, and he ordered all civil and military officers to put down the rebels....In using armed force to enforce the embargo, including dispatching some army regulars, Jefferson was violating all of his beliefs in minimal government.”⁴⁷⁶ Gallatin under the futility of the policy. Gallatin biographer Nicholas Dungan wrote: “Gallatin opposed the embargo for both domestic and international reasons: he believed it would have no taming effect on Britain at all and would produce precisely the damage to the American economy that in actuality came to pass. Jefferson did not listen. Gallatin’s pragmatism, or perhaps his sense of duty, caused him to carry on.”⁴⁷⁷

Henry Adams observed that “the effect of a permanent embargo was to carry out by the machinery of the United States government precisely the policy which Mr. Canning had adopted for his own. American shipping ceased to exist; American commerce was annihilated; American seamen were forced seek employment under the British flag, and British ships and British commerce alone occupied the ocean. The strangest and saddest spectacle of all was to see Mr. Jefferson and Mr. Gallatin, after seven years of patient labor in constructing their political system, forced to turn their backs upon that future which only a few weeks before had been so brilliant, and, with infinitely more labor and trouble than they had used in building their edifice up, now toil to pull it down.”⁴⁷⁸ Unfortunately for the county, the embargo was one of the “hobby-horses” which, once mounted, Jefferson refused to get off. Jefferson wanted “to give a full effect to the important experiment of the embargo at any expense within the bounds of reason.”⁴⁷⁹ Gallatin wrote his wife that the “President’s speech was originally more warlike than was necessary, but I succeeded in getting it neutralized; this between us; but it was lucky; for Congress is certainly peaceably disposed.”⁴⁸⁰ Despite his doubts about the embargo’s wisdom, it was on Gallatin that the brunt of enforcement fell. Historian Garry Wills wrote: “Gallatin always opposed war on economic grounds – America could not afford it, and would lose the Republican ethos if it determined to pay for war by any means available.”⁴⁸¹ Biographer John Austin Stevens wrote that Gallatin understood that “stringent measures must be adopted to make it effective. Mr. Gallatin accordingly called upon Congress for the necessary powers. They at once responded with the Enforcement Act, which Mr. Gallatin proceeded to apply with characteristic administrative vigor, and summoned Jefferson to authorize the collectors of revenue to call the military force of the United States to support them in the exercise of their restricting authority. There was to be no evasion under the systems which Hamilton devised and Gallatin knew so well how to administer.”⁴⁸²

Although Gallatin was skeptical of the efficacy of the embargo, he tried energetically to enforce it. But foreign and domestic pressure undermined the embargo. “There is not patriotism and union sufficient to bear with patience when there is no stimulus,” Gallatin wrote Madison. The people have been taught to view the embargo less as a shield protecting them against the decrees and orders of foreign powers, than as the true if not primary cause of the stagnation of commerce and depreciation of produce.”⁴⁸³ Gallatin’s response was unJeffersonian. According to Jefferson biographer Noble E. Cunningham, Jr., “As difficulties in enforcing the embargo mounted, Gallatin, whose department bore the principal responsibility of implementing the act, wrote the president from New York at the end of July [1808] that if the embargo was to be continued, more stringent enforcement would be required..’”⁴⁸⁴ Gallatin understood that the embargo was failing and wrote Jefferson: “I am perfectly satisfied that if the embargo must be persisted in any longer, two principles must necessarily be adopted in order to make it sufficient: 1st. That not a single vessel shall be permitted to move without the special permission of the Executive. 2d. That the collectors be invested with the general power of seizing property anywhere, and taking the rudders or otherwise effectually preventing the departure of any vessel in harbor, though ostensibly intended to remain there; and that without being liable to personal suits. I am sensible that such arbitrary powers are equally dangerous and odious.”⁴⁸⁵

Noble Cunningham noted: “Though Jefferson did not specifically endorse the treasury secretary’s proposals, he supported the main thrust of Gallatin’s argument. ‘This embargo law is certainly the most embarrassing one we have ever had to execute,’ he replied from Monticello. ‘I did not expect a crop of so sudden and rank growth of fraud and open opposition by force could have grown up in the US. I am satisfied with you that if orders and decrees are not repealed, and a continuance of the embargo is preferred to war (which sentiment is universal here) Congress must legalize all means which may be necessary to obtain it’s end.”⁴⁸⁶ Just as Hamilton’s whiskey tax had split the nation economically, so did Jefferson’s embargo.

Jefferson’s policy proved to be economic suicide. Historian Gordon S. Wood wrote: “Not only did this experiment fail to stop the belligerents’ abuses of America’s natural rights, but the embargo ended up seriously injuring the American economy and all but destroying the Jeffersonian principle of limited government and states’ rights.” Wood wrote that “early in January 1809 Congress passed and Jefferson signed an extremely draconian enforcement act.”⁴⁸⁷ As he prepared to leave office. President Jefferson was also silent and abdicated responsibility for the embargo He said “I have thought it right to take no part myself in proposing measures, the execution of which will devolve on my successor.”⁴⁸⁸ The country was essentially adrift because the captain knew he was about to be relieved – but whose own secretary of state was preparing to take the helm. “The duty of providing a policy fell of necessity upon Mr. Madison and Mr. Gallatin, although they could not act effectively without the President’s power,” wrote Henry Adams.⁴⁸⁹

Gallatin knew there needed to be a change in policy, but was constrained by inaction on the part of Jefferson and indecision on the part of Madison. Gallatin sought to have Congress to alter the embargo – without appearing to reject Jefferson’s policy. It was fortunate that Gallatin was tougher than his political partners. As Henry Adams observed: “In his youth almost as sanguine as Mr. Jefferson, he knew better how to accept defeat and adapt himself to circumstances, how to abandon theory and to move with his generation; but it needed all and more than all the toughness of Mr. Gallatin’s character to support his courage in this emergency.”⁴⁹⁰ America was caught between the twin pincers of Britain and France with little military force to combat them. Gallatin preferred war to stalemate. He authored a major report for Congress – which appeared under the name of House Ways and Means Chairman George W. Campbell and reviewed all the options which the government might take. The Campbell report concluded: “For the question for every citizen now is, whether he will rally round the government of his choice or enlist under foreign banner; – whether he will be for his country or against his country.”⁴⁹¹ Gallatin viewed termination of the embargo as submission to English policies. The alternative was war, which he viewed as virtually inevitable if the U.S. was to retain its self-respect. Gallatin reported to Congress in 1808: “Either America must accept the position of commerce allotted to her by the British edicts, and abandon all that is forbidden, – and it is not material whether this is done by legal provisions limiting the commerce of the United States to the permitted places, or by acquiescing in the capture of vessels stepping beyond the prescribed bounds. Or the nation must oppose force to the execution of the orders of England; and this, however done, and by whatever name called, will be war.”⁴⁹² The full impact of the embargo on federal government collection of custom duties was not felt until after President Madison took office. Gallatin biographer John Austin Stevens wrote: “In his annual report to Congress, December, 1809, he announced the expenses of government, exclusive of the payments on account of the principal of the debt, to have exceeded the actual receipts into the Treasury by a sum of near $1,300,000. For this deficiency, and the sum required for the sinking fund, Gallatin was authorized in May to borrow from the Bank of the United State $3,750,000 at six per cent., reimbursable on December 31, 1811. Of this sum only $2,750,000 was taken, the expenses having proved less than Mr. Gallatin had anticipated.”⁴⁹³

But without the support of President Jefferson, Gallatin was unable to press for continuation of the embargo policy in the face of a growing group of what Gallatin called “The Navy Coalition of 1809...By whom were sacrificed...The Republican cause itself, and the people of the United States, To a system of Favoritism, extravagance, parade and folly.”⁴⁹⁴ By Congress voting against extension of the embargo, Jefferson, Madison and Gallatin were all defeated and a possible of drift adopted first by Congress and also by Madison that led to the War of 1812. Biographer Frank Ewing wrote that “attempting to enforce the embargo act was the most grievous task of Gallatin’s public career. Not only was he forced to abandon his pet plan for internal improvements and for the cementing of the states into a more perfect union, but the necessity of seeking and using dictatorial powers, which were so contrary to his nature and which, as he said to Jefferson, were ‘equally dangerous and odious,’ made the duty extremely irksome. He attempted no defense against ferocious party assaults. Without complaint, he accepted the responsibility and remained silent.”⁴⁹⁵

The War of 1812 exemplified the failure of Jeffersonian economic and trade policy. With the embargo in place, the government had effectively cut itself off from its only large source of revenue – customs duties. With the defeat of rechartering the Bank of the United States, the government had cut off another financial tool for financing the war. Economic historian Charles Sellers wrote: “Treasury Secretary Gallatin faced a nightmarish struggle in financing the War of 1812. A British blockade prostrated the market sector and dried up imports, the main source of federal revenues, while military expenditures ballooned and the country’s scarce specie drained into New England banks to pay for Yankees’ mounting manufactures and smuggled European imports. Gallatin could have borrowed up to $18 million from the national Bank if he had gotten it rechartered, whereas the state banks had no aid to offer, in New England because they opposed the war and elsewhere because they were about to suspend specie payments. Consequently he had to compound inflation by issuing Treasury notes and hawking federal bonds around the country at enormous discounts. Even then he realized so little that he warned President Madison military operations might have to be curtailed.”⁴⁹⁶ Jeffersonian policies had not only led to a war; they had led to a situation in which the country could not pay for the way.

Military Expenditures

Although wise about the embargo, Gallatin had been less wise concerning American military expenditures. Beginning with the Washington Administration, Gallatin had a constant critic of military expenditures. He believed that reducing the country’s indebtedness was more important to its national security. As a congressman, he did not believe in a standing army – believing that a militia was more reliable and less costly. In his 1796 Sketch, Gallatin called the very existence of the navy into question.⁴⁹⁷ As a Cabinet member, Gallatin was a continuing opponent of naval spending and of Navy Secretary Robert Smith, who deliberately exceeded his authority in sending a U.S. frigate to blockade the North African coast. When Congress was debating an appropriation to build three new ships for the Navy, Congressman Gallatin argued: “I am sensible that an opinion of our strength will operate to a certain degree on other nations; but I think a real addition of strength will go farther in defending us than mere opinion. If the sums to be expended to build and maintain the frigates were applied to paying a part of our national debt, the payment would make us more respectable in the eyes of foreign nations than all the frigates we can build. To spend money unnecessarily at present will diminish our future resources, and instead of enabling us will perhaps render it more difficult for us to build a navy some years hence.”⁴⁹⁸ Jefferson took the same position. Historian Garry Wills observed: “If Jefferson had been able to get his way, America would have possessed no frigates at all in 1812. The great frigates, built by the Federalists during Washington’s administration, had been strenuously opposed by the Republicans in Congress. Gallatin, then a congressman from Pennsylvania, tried to prevent their construction. After they were constructed he tried to prevent their being fitted and manned.”⁴⁹⁹

The incident reflected Gallatin’s principles as well as his limitations, noted biographer Henry Adams. “Mr. Gallatin habitually made too little allowance for the force and complexity of human passions and instincts. Self-contained and self-reliant himself, and, like most close reasoners, distrustful of everything that had a mere feeling for its justification, he held government down to an exact observance of rules that made no allowance for national pride. The three frigates whose construction he so pertinaciously resisted were the Constitution, the Constellation, and the United States. The time came, after Mr. Gallatin and his party had for nearly twelve years carried out their own theories with almost absolute power, when the American people, bankrupt and disgraced on land, turned with a frenzy of enthusiasm towards the three flags which these frigates were carrying on the ocean, and, with little regard to party differences, would have seen the national debt and no small part of the national life expunged rather than have parted with the glories of these ships; when the broadsides of the Constitution and United States, to use the words of George Canning in the British Parliament, ‘produced a sensation in England scarcely to be equalled by the most violent convulsion of nature;’ and when Mr. Gallatin himself, exhausting every resource of diplomacy in half the courts of Europe, found that his country had no national dignity abroad except what these frigates had conquered.”⁵⁰⁰

At the height of American tension with France in 1799, it was politically unpopular to oppose war, but Gallatin remained at his post in the House while other Republican leaders left town. Historian Henry Adams wrote: “The Federalists’ usurpations and violations of the Constitution at that period, and their majority in both Houses of Congress, were so great, so decided, and so daring, that, after combating their aggressions inch by inch without being able in the least to check their career, the Republican leaders thought it would be best for them to give up their useless efforts there, go home, get into their respective Legislatures, embody whatever of resistance they could be formed into, and if ineffectual, to perish there as in the last ditch. All therefore retired, leaving Mr. Gallatin alone in the House of Representatives and myself in the Senate, where I then presided as Vice-president,” wrote Vice President Thomas Jefferson. “No one who was not a witness to the scenes of that gloomy period can form any idea of the afflicting persecutions and personal indignities we had to brook.” There was great pressure on Gallatin because as biographer Adams wrote: “Party feeling never ran so high; he stood exposed to its full force, and by his incessant activity in opposition concentrated all its energy upon himself, until to break him down became a very desirable object, for, though always outvoted on war measures, his influence was still very troublesome to the Administration.” Adams wrote of Gallatin: “Believing, as he did, that America had nothing to fear but foreign war, he preferred enduring almost any injuries rather than resort to that measure. His conviction that war was the most dangerous possible course which the United States could adopt was founded on sound reason, and was in reality shared by a vast majority of his fellow-citizens, who were divided in principle rather by the question whether war could be avoided and whether resistance was not the means best calculated to prevent.”⁵⁰¹

The Federalists took personally Gallatin’s opposition to conflict with France in the late 1790s. One part of the Sedition Act was clearly aimed actions like that taken in the Pittsburg resolutions of 1792 in which Gallatin had participated. In mid-1798, the Massachusetts legislature proposed a constitutional amendment aimed straight at the Swiss immigrant: “It is the wish and opinion of this Legislature that any amendment which may be agreed upon should exclude at all events from a seat in either branch of Congress any person who shall not have been actually naturalized at the time of making their amendment, and have been admitted a citizen of the United States fourteen years at least at the time of such election.”⁵⁰² Such criticism did not deter Gallatin. He opposed another appropriation for naval construction in 1798 by saying, “I know not whether I have heretofore been indulging myself in a visionary dream, but I had conceived, when contemplating the situation of America, that our distance from the European world might have prevented our being involved in the mischievous politics of Europe, and that we might have lived in peace without armies and navies and without being deeply involved in debt. It is true in this dream I had conceived it would have been our object to have become a happy and not a powerful nation or at least no way powerful except for self defence.”⁵⁰³

Gallatin’s military positions as a Congressman and Cabinet member were determined by his fiscal priorities. Years after leaving public office, he wrote: “No nation can, any more than any individual, pay its debts unless its annual receipts exceed its expenditures, and the two necessary ingredients for that purpose, which are common to all nations, are frugality and peace.”⁵⁰⁴ Henry Adams wrote: “What Mr. Gallatin would have done with the navy, had he been let to deal with it in his own way, nowhere appears. He had opposed its construction, and would not have considered it a misfortune if Congress had swept it away; but he seems never to have interfered with it, after coming into office, further than to insist that the amount required for its support should be fixed at the lowest sum deemed proper by the head of the Department.” Adams noted that Gallatin “grumbled not so much at the amount of the appropriations as at the want of good management in its expenditure. He thought that more should have been got for the money; but so far as the force was concerned, the last Administration had itself fixed the amount of reduction, and the new one only acted under that law, using the discretion given by it.”⁵⁰⁵

As Treasury Secretary, Gallatin’s attitude toward naval spending was accentuated by the incompetence of the Navy Department in administering it. In 1803, Gallatin complained to Jefferson: “I cannot discover any approach towards reform in that department, and I hope that you will pardon my stating my opinion on that subject when you recollect with what zeal and perseverance I opposed for a number of years, whilst in Congress, similar loose demands for money.”⁵⁰⁶ The cost of a standing navy was so burdensome that Gallatin argued that “it would an economical measure for every naval nation to burn their navy at the end of a war and to build a new one when again at war, if it was not that time was necessary to build ships of war.”⁵⁰⁷ “The navy had not been economically managed since Jefferson assumed office,” noted historian Albert Sidney Bolles. “The same person administered its affairs (Robert Smith), who had spent a great deal of money, but had only a very little to show for his expenditures. Finally, it now appeared that he had bought bills of exchange to the amount of $250,000, within two years, of his brother, Gen. Smith, who was then a member of the Senate from Maryland; and from his connections, and on the face of the accounts, it appeared that these were, to some extent, accommodation bills: in other words, that the government money had been left by collusion in the possession of Gen. Smith's firm until they could conveniently remit it to its destination. When this proceeding became known, one effect was to estrange very completely a group in the Senate who belonged to Gallatin's party, and whose influence was indispensable to his maintaining control over that body.”⁵⁰⁸

As Treasury Secretary, Gallatin continued his opposition to naval construction – even one of Jefferson’s pet schemes to build over a hundred gun boats to protect Eastern and Southern cities. The scheme was indeed a waste of money. Two years after they were built, only 24 of 176 gunboats were still in naval service. Historian Garry Wills observed: “The attraction of this [project] for Gallatin was that gunboats were, comparatively, cheap. But Jefferson was so enthusiastic about the project that he wanted two hundred of them. Trying to cut that number to seventy-three, Gallatin wrote: ‘of all the species of force which war may require – armies, ships of war, fortifications, and gunboats – there is none which can be obtained in a shorter notice than gunboats, and none therefore it is less necessary to provide beforehand.’”⁵⁰⁹

Henry Adams observed that when Jefferson “fairly mounted a hobby-horse he rode it over all opposition, and, of all hobby-horses, gun-boats happened at this time to be his favorite. He insisted that the whole two hundred must be built....”⁵¹⁰ The boondoggle cost the federal government nearly $2 million that it could ill afford. Adams noted that Gallatin “strongly urged that no more gun-boats should be built till they were wanted, and he begged Mr. Jefferson to let Congress decide whether they were wanted or not. Mr. Jefferson did not take the advice, and, as usual, Mr. Gallatin was the one to suffer for the mistakes of his chief; the gun-boats lasted long enough to give him great trouble and to be one of the principal means of bankrupting the Treasury even before the war; unfortunately, he had exhausted his strength in complaints of the Navy Department; he had spoken again and again in language which for him was without an example; in the present instance he had Mr. Jefferson himself for his strongest opponent, and there was nothing to be done but to submit.”⁵¹¹ Gallatin never lost his skepticism of naval spending, writing President Jefferson in May 1805 that naval appropriations were “greater than the object seemed to require, and a merely nominal accountability. I have, for the sake of preserving perfect harmony in your councils, however grating to my feelings, been almost uniformly silent, and I beg that you will ascribe what I now say to a sense of duty and to the grateful attachment I feel for you.”⁵¹²

Just as controversial, Gallatin did not believe that soldiers had a role in civil society. In 1802 he attended a part at the Navy Yard at which marines served as sentries. He later wrote his wife: “The very sight of a bayonet to preserve order amongst citizens rouses my indignation, and you may judge of my feelings when I tell you that one of the sentries actually stabbed a mechanic who abused him because he had been ordered away. The distribution of our little army to distant garrisons where hardly any other inhabitant is to be found is the most eligible arrangement of that perhaps necessary evil that can be contrived. But I never want to see the face of one in our cities and intermixed with people.”⁵¹³

Reduction in military expenditures was a major part of the Gallatin program. “Sending Jefferson rough sketches relative to finances shortly after the inauguration, Gallatin said they could save hundreds of thousands in the Departments of War and the Navy, while they could only save thousands in the others,” wrote Jefferson biographer Dumas Malone. “One reason why the President gave first attention to naval reduction was that, by an act passed at the end of the Adams administration, he was given discretion to sell all naval vessels except thirteen frigates and to take all except six of the latter out of active service.”⁵¹⁴ Gallatin even favored continued payment of extortion money to the Barbary pirates rather than confront them on the high seas: “Eight years hence we shall, I trust, be able to assume a different tone; but our exertions at present consume the seeds of our greatness and retard to an indefinite time the epoch of our strength.”⁵¹⁵ He wrote Jefferson “that in our present situation, I consider it a mere matter of calculation whether the purchase of peace is not cheaper than the expense of a war...”⁵¹⁶ He was overruled by Jefferson and had to find new customs duties to pay for the naval force to subdue to pirates off Tripoli in 1804.

There were limits to Gallatin’s opposition to war. Although Gallatin backed appeasing the Barbary pirates, he did not favor appeasing Britain in 1807 after the HMS Leopard boarded the USS Chesapeake and seized four sailors in an incident in which three Americans were killed. Gallatin believed this provocation over the simmering issue of British impressment of American sailors was cause for war. Gallatin wrote his wife after the incident: “It is our duty to ask for reparation, to avert war if it can be done honorably, and in the meanwhile not to lose an instant in preparing for war. On that last point I doubt, between ourselves, whether everything shall be done which ought to be done.”⁵¹⁷ A few days later, Gallatin wrote his father-in-law: “I believe that war is inevitable.” Gallatin understood the implications of war: “We will be poorer, both as a nation and as a government, our debt and taxes will increase, and our progress in every respect will be interrupted. But all those evils are not only to be put in competition with the independence and honor of the nation; they are, moreover, temporary, and very few years of peace will obliterate their effects.”⁵¹⁸

Gallatin biographer John Austin Stevens wrote: “The only charge which has ever been made against Gallatin’s administration was, that he reduced the debt at the expense of the defenses and security of the country; but, to quote the words of one of his biographers: ‘Mr. Gallatin had the sagacity to know that it [the redemption of the debt] would make but little difference in the degree of preparation of national defense and means of contest, for which it is impossible ever to obtain a considerable appropriation before ht near approach of the danger that may render them necessary. He knew that the money thus well and wisely devoted to the payment of the debt was only rescued from a thousand purposes of extravagance and mal-application to which all our legislative bodies are so prone whenever they had control of surplus funds.”⁵¹⁹

Financial historian Albert S. Bolles wrote: “The country was swiftly nearing the point of war; yet the cost of waging it was a highly important matter, which Congress, nevertheless, shrank from considering. Under the operation of the embargo, the revenues were rapidly diminishing, while the expenses were far more rapidly swelling. Neither the President nor Gallatin recommended war, but they were desirous of providing for it; and the secretary recommended increased taxes, and a loan of $1,200,000, to pay troops, and to support them. When war was really imminent, the Committee of Ways and Means requested Gallatin to appear before them to discuss the question of war taxes. He appeared; and, after declaring that he did not feel himself particularly responsible for the position occupied by the nation, he added, that it could not recede therefrom with honor and safety, and that it must maintain that position with all the available means which could be brought to bear on the enemy, and that a system of increased taxation, which he fully set forth, ought to be immediately put into operation.” Congress refused to act and blamed the Swiss-American messenger for his message. Bolles wrote:

It was a sad and humiliating spectacle to behold Gallatin strenuously exerting all his great energies to prepare his country for the coming struggle, and this cabal madly trying to overthrow him and all his works, no matter how manifest was their wisdom, or great their necessity.... During the earlier years of Gallatin's administration of the treasury, he had exercised an extraordinary power over his party in Congress, and also over Jefferson. This was due mainly to the fact that he was almost the only one who knew any thing about the national finances. Jefferson had at all times trusted his faithful and able secretary. He had clung to him as his sheet-anchor, although not always in favor of the secretary's economies, especially in the navy department. Yet Jefferson would often yield to the superior reasoning of Gallatin, as we have shown.⁵²⁰

Democracy

America has seldom witnessed two more industrious immigrants than Alexander Hamilton and Albert Gallatin. They changed America and they shaped their adopted hometown of New York City. Hamilton biographer Richard Brookhiser wrote: “New York’s style – intense, commercial, go-getting – reflected his vision of America; New York politics – brawling and byzantine, stirred by mobs and newspapers and controlled by a handful of rich families – shaped his options and his agendas.”⁵²¹ New York in turn owes much of his character to the influence of its adopted sons. Both were New York boosters and organizers. Gallatin was one of the founders of New York University. He was elected chairman of the organizing group at a meeting held at the New-York Historical Society in 1830. Biographer Raymond Walters, Jr., noted that “New York University opened its doors in 1832 and, in the course of several decades, adopted Gallatin’s principles of scientific and English instruction to serve the people of many stocks in the city, and of graduate training.”⁵²² A decade later in 1842, Gallatin became president of the New-York Historical Society and a founder of the American Ethnological Society. In his eighties, Gallatin was still an active scholar, writing a paper for the Ethnological Society in 1848, “On the Geographical Distribution and Means of Subsistence of the North American Indians at the Time of the Discovery of America.”

Hamilton and Gallatin had, admittedly, very different views of society. Biographer Forrest McDonald wrote that Hamilton “abhorred the leveling spirit. But his detestation of dependency and servility was stronger yet, for those were contrary to this very idea of manhood, and the American system of pluralistic local oligarchies made everyone dependent upon those born to the oligarchy. He hated the narrow provincialism that the system nourished and fed upon; and he resented, as only a natural-born outsider can, the clannishly closed quality of the system. Most objectionable of all was that the system failed to reward industry – industry in the sense of self-reliance and habitual or constant work and effort.”⁵²³ On the other hand, noted historian Gordon S. Wood: “Hamilton was so wedded to a hierarchical view of society that he could only imagine industrial investment and development coming from the top down. Thus he was incapable of foreseeing that the actual source of America’s manufacturing would come from below, from the ambitions, productivity, and investments of thousands upon thousands of middling artisans and craftsmen who eventually became America’s businessmen.” Wood wrote: “Although Hamilton’s financial program was designed with these moneyed interests in mind, it was never intended for their exclusive benefit. They would no doubt prosper from it, but that would be incidental to his larger economic and political plans. In addition to bringing prosperity to the whole country, Hamilton hoped that his new economic and fiscal measures would tie moneyed men and other influential individuals to the new central government.”⁵²⁴

Dictatorship, aristocracy and militarism were criticisms often made of Hamilton. “Hamilton’s fondness for things military provoked suspicion from those who feared him as a Caesar – yet so little was he a Caesar that twice during his years in the army he personally tried to save Congress from hostile soldiers, both British and American,” wrote biographer Richard Brookhiser.⁵²⁵ Still, noted historians Larry Schweikart and Michael Allen: “Hamilton had no illusions about the dangers inherent in big government. He rightly understood that over the long term, prices did not lie. Monetary values reflect real value in short order. While the will of the people might swing wildly, depending on emotions, news coverage, propaganda, or other factors, markets generally are constrained by reality, and he wanted to let that reality enforce its discipline on American finances.”⁵²⁶ Biographer Ron Chernow wrote that Hamilton “was the messenger from a future that we now inhabit. We have left behind the rosy agrarian rhetoric and slaveholding reality of Jeffersonian democracy and reside in the bustling world of trade, industry, stock markets and banks that Hamilton envisioned. (Hamilton’s staunch abolitionism formed an integral part of his economic vision.) He has also emerged as the contested visionary in anticipating the shape and power of the federal government. At a time when Jefferson and Madison celebrated legislative power as the purest expression of the popular will, Hamilton argued for a dynamic executive branch and an independent judiciary, along with a professional military, a central bank and an advanced financial system.”⁵²⁷

Ron Chernow noted the breadth of Hamilton’s accomplishments: “The American Revolution and its aftermath coincided with two great transformations in the late eighteenth century. In the political sphere, there had been a repudiation of royal rule, fired by a new respect for individual freedom, majority rule, and limited government. If Hamilton made distinguished contributions in this sphere, so did Franklin, Adams, Jefferson, and Madison. In contrast, when it came to the parallel economic upheavals of the period – the industrial revolution, the expansion of global trade, the growth of banks and stock exchanges – Hamilton was an American prophet without peer. No other founding father straddled both of these revolutions – only Franklin even came close – and therein lay Hamilton’s novelty and greatness.”⁵²⁸

Gallatin would never endorse a professional military establishment, but he embraced many of Hamilton’s financial innovations. Like Hamilton, Gallatin was committed to the Union and to unity. Unlike Hamilton, who was a frustrated military commander, Gallatin neither sought nor encouraged the prospect if war. L. B. Kuppenheimer argued that Gallatin’s vision was “just as farsighted and integrated as that of Hamilton. One also finds a consistent adherence to certain fundamental principles, most basic of which was Gallatin’s commitment to liberty – not only in politics, but in economics as well.” According to Kuppenheimer, “Gallatin saw the principles of democracy as being best protected by full participation in both the political and economic process.” Gallatin was the more committed democrat. Kuppenheimer wrote that Gallatin “combined the Federalist vision of a broadly diversified independent economy with the all-inclusive democratic values of the Republicans.” Kuppenheimer argued: “Despite what he and many others viewed as an abuse of national authority under the Washington administration, Gallatin was still able to see the important benefits of a strong central government. Unhampered by Hamilton’s fear of the mass of people, Gallatin could envision a national economy that incorporated all factions of society. Consequently, the programs he offered were designed to embrace all interests – geographical, political, and economic.”⁵²⁹

Hamilton feared the implications of unchecked democracy. With time, Gallatin came to share some of those concerns – especially when General Andrew Jackson sought the Presidency in 1824. “General Jackson has expressed a greater and a bolder regard of the first principles of liberty than I have ever known to be entertained by any American, or, indeed, by any person professing himself to be either a Republican or only a friend to a government of laws.” Gallatin had a fear of a popular dictator: “That they should add one more proof to those with which the history of mankind abounds, & which the fact of the Globe & even of Europe exhibits, that dazzled by military glory, they, the people are naturally disposed to sacrifice their rights & liberties to the shrine of glory, and to substitute the worship of a chieftain to the exercise of those rights & to the maintenance of that liberty.”⁵³⁰ Like Hamilton, Gallatin was a relentless advocate for personal and national economic development. He understood that economic growth and personal liberty both needed to be protected and encouraged. As L.B. Kuppenheimer concluded: “Throughout his political life, Albert Gallatin held a clear and consistent vision of democratic republicanism as the most enlightened form of government ever devised for the preservation of individual freedom. It was his basic commitment to that principle that motivated all of his actions, not only in his role as political but in every facet of his life.”⁵³¹

Albert Gallatin and Alexander Hamilton were very different politicians and frequent political opponents. One area where Albert Gallatin and Alexander Hamilton shared a common goal was the abolition of slavery. As an emigrant farmer in Western Pennsylvania, Gallatin’s reputation had never been stained by slave ownership. While serving in the Pennsylvania House of Representatives in March 1793, Gallatin wrote a legislative report recommending the abolition of slavery within its borders. He wrote: “Slavery in inconsistent with every principle of humanity, justice and right, and repugnant to the spirit and express letter of the Constitution and the commonwealth.”⁵³² Still, Gallatin feared too much the implications of antislavery agitation on the nation’s unity to be as firm and active an opponent of slavery as was Hamilton, who was a founding member of the New York Society for Promoting the Manumission of Slaves.

Secretary of the Treasury Gallatin was in New York at the time of the 1804 duel between Alexander Hamilton and Vice President Aaron Burr. Somewhat heartlessly, Gallatin wrote President Jefferson that there was “much artificial feeling, or semblance of feeling” about Hamilton’s death.⁵³³ Gallatin himself would live more than four decades longer than Hamilton and die at 88 – the last of the great Founders to succumb to controversy and disease. For both men, their ideas and principles would survive – and become pillars of the American politics and economics. “Taken together, their policies added up to a hothouse for the germination of business,” wrote historian Thomas K. McCraw. “The plants of private enterprise did the actual growing and made up the final harvest. But without the hothouse, and without close attention to the provision of plentiful sunlight, warmth, and moisture, the harvest could never have been so bountiful.”⁵³⁴

References

1. Ron Chernow, Alexander Hamilton, p. 469.
2. Joseph J. Ellis, Founding Brothers: The Revolutionary Generation, p. 191.
3. Esmond Wright, Fabric of Freedom: 1763-1800, p. 230.
4. Cokie Roberts, Founding Mothers: The Women Who Raised Our Nation, p. 276.
5. David McCullough, John Adams, p. 480 (Letter from Abigail Adams to John Adams, 1798).
6. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 102, 13.
7. Ron Chernow, Alexander Hamilton, p. 614.
8. (Letter from John Adams to Benjamin Rush, January 25, 1806).
9. David McCullough, John Adams, pp. 498-499.
10. (Letter from Timothy Pickering to Rufus King, June 26, 1800).
11. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 419.
12. (John Quincy Adams, December 16, 1814).
13. (Letter from Thomas Jefferson to James Madison, September 8, 1793).
14. Richard Brookhiser, Founding Father, p. 81.
15. Andrew Burstein, The Inner Jefferson: Portrait of a Grieving Optimist, p. 239.
16. Ron Chernow, Alexander Hamilton, p. 509.
17. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 280.
18. (Letter from Alexander Hamilton to George Washington, September 9, 1792).
19. Richard Brookhiser, Alexander Hamilton: American, p. 139.
20. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, pp. 109-110.
21. William Lee Miller, The Business of May Next: James Madison & the Founding, p. 155.
22. Ron Chernow, Alexander Hamilton, p. 658.
23. Henry Adams, The Life of Albert Gallatin, p. 103 (Letter from Albert Gallatin to Hannah Gallatin, August 23, 1793).
24. John Steele Gordon, Hamilton’s Blessing: The Extraordinary Life and Times of our National Debt, p. 22.
25. (Letter from John Adams to Timothy Pickering, October 14, 1798).
26. (Letter from John Adams to James Lloyd, February 17, 1815).
27. Henry Adams, The Life of Albert Gallatin, p. 347.
28. Louis M. Hacker, Alexander Hamilton in the American Tradition, pp. 130-131.
29. Gordon S. Wood, Empire of Liberty, p. 246.
30. Alf J. Mapp, Jr., Thomas Jefferson: Passionate Pilgrim, pp. 169, 199.
31. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 54.
32. James D. Grant, “Vote for the Sound Money Ticket,” Wall Street Journal, November 2, 2012.
33. (John Quincy Adams, diary entry, 1821).
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36. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 227.
37. Jay Winik, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, p. 146.
38. Roger G. Kennedy, Burr, Hamilton, and Jefferson: A Study in Character, p. 156.
39. Ron Chernow, Alexander Hamilton, p. 157.
40. Ron Chernow, George Washington: A Life, p. 391.
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51. Ron Chernow, Alexander Hamilton, pp. 136-137.
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53. Richard Norton Smith, Patriarch: George Washington and the New American Nation, p. 52.
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55. (Philadelphia Aurora, September 3, 1811).
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57. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, pp. 94-95.
58. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 21.
59. Ron Chernow, Alexander Hamilton, p. 176.
60. (Letter from Alexander Hamilton to Edward Carrington, May 26, 1792).
61. (Letter from Alexander Hamilton to Robert Morris, April 30, 1781).
62. Ron Chernow, Alexander Hamilton, p. 43,.
63. John Ferling, John Adams: A Life, p. 328.
64. James Thomas Flexner, Washington: The Indispensable Man, p. 231.
65. John Ferling, The Ascent of George Washington: The Hidden Political Genius of an American Icon, p. 284.
66. (Letter from George Washington to John Adams, September 27, 1798).
67. (Letter from George Washington to Alexander Hamilton, August 21, 1797).
68. Ron Chernow, Alexander Hamilton, p. 537.
69. Ron Chernow, Alexander Hamilton, p. 173.
70. E. M. Halliday, Understanding Thomas Jefferson, p. 126.
71. (Letter from Thomas Jefferson to Albert Gallatin, October 12, 1806).
72. (Letter from Thomas Jefferson to James Madison, March 6, 1796).
73. (Letter from Thomas Jefferson to Albert Gallatin, October 11, 1809).
74. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 74.
75. (Letter from Albert Gallatin to Thomas Jefferson, November 8, 1809).
76. John Austin Stevens, Albert Gallatin, p. 300 (Letter from Thomas Jefferson to Albert Gallatin, 1823).
77. (Letter from Albert Gallatin to William Maxwell, February 15, 1848).
78. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 43. (Albert Gallatin, Biographical Sketch).
79. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 42.
80. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 196.
81. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 45.
82. Nathan Schachner, Alexander Hamilton, p. 230.
83. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 362.
84. Richard Rush, Residence at the Court of London, p. 313.
85. (Letter from Albert Gallatin to Hannah Gallatin, February 3, 1798).
86. (Letter from Albert Gallatin to John Badollet, May 12, 1809).
87. Joseph J. Ellis, American Sphinx: The Character of Thomas Jefferson, p. 188.
88. John C. Hamilton, History of the Republic of the United States of America, p. 250.
89. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 213.
90. Stephen F. Knott, Alexander Hamilton and the Persistence of Myth, p. 27.
91. Garry Wills, James Madison, p. 151.
92. Henry Cabot Lodge, Alexander Hamilton, p. 184.
93. Henry Adams, The Life of Albert Gallatin, p. 267.
94. Henry Adams, The Life of Albert Gallatin, pp. 267-269.
95. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, p. 141.
96. Ron Chernow, Alexander Hamilton, pp. 346-347.
97. Richard Brookhiser, Alexander Hamilton: American, p. 124 (Letter from Thomas Jefferson to James Madison, September 21,1795).
98. William Peterfield Trent et al, Cambridge History of English and American Literature, p. 430.
99. Henry Adams, The Life of Albert Gallatin, pp. 491-492.
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101. Henry Adams, The Life of Albert Gallatin, p. 412.
102. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 85.
103. Henry Adams, The Life of Albert Gallatin, pp. 415-416.
104. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, p. 107, 109.
105. Henry Adams, The Life of Albert Gallatin, p. 431.
106. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 99.
107. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 65.
108. Broadus Mitchell, Heritage from Hamilton, p. 45.
109. Henry Cabot Lodge, Alexander Hamilton, pp. 132-133.
110. Ron Chernow, Alexander Hamilton, p. 296.
111. John Steele Gordon, Hamilton’s Blessing: The Extraordinary Life and Times of our National Debt, pp. 17, 20.
112. Jack Rakove, Revolutionaries: A New History of the Invention of America, p. 398.
113. John C. Hamilton, History of the Republic of the United States of America, p. 253.
114. Nathan Schachner, Alexander Hamilton, p. 237.
115. John Marshall, The Life of George Washington, Volume V, p. 247.
116. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 113.
117. James Morton Smith, Washington: A Profile, p. 198 (Esmond Wright, “President of the United States (1789-1797)).
118. Gordon S. Wood, Revolutionary Characters: What Made the Founders Different, p. 133.
119. Broadus Mitchell, Heritage from Hamilton, p. 38.
120. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 43.
121. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 135.
122. Alexander Hamilton, Reports of the secretary of the Treasury of the United States, Volume 1, p. 199.
123. Gordon S. Wood, Revolutionary Characters: What Made the Founders Different, pp. 134-135.
124. Nathan Schachner, Alexander Hamilton, p. 248.
125. Gordon S. Wood, Empire of Liberty, p. 172.
126. Ron Chernow, Alexander Hamilton, p. 281.
127. Forrest McDonald Alexander Hamilton: A Biography, p. 117.
128. E. James Ferguson, The Power of the Purse: A History of American Public Finance, 1776-1790, p. 206.
129. Broadus Mitchell, Heritage from Hamilton, p. 40.
130. Broadus Mitchell, Heritage from Hamilton, pp. 40, 55.
131. Gordon S. Wood, Empire of Liberty, p. 90.
132. Nathan Schachner, Alexander Hamilton, p. 243.
133. (Letter from Alexander Hamilton to James Madison, October 12, 1789).
134. (Letter from James Madison to Alexander Hamilton, November 19, 1789).
135. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 239.
136. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 50.
137. C. Daniel Vencill. Secretaries of the Treasury, p. 166.
138. Henry Adams, The Life of Albert Gallatin, p. 115.
139. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 56.
140. Forrest McDonald Alexander Hamilton: A Biography, p. 286.
141. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 70.
142. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 435.
143. (Letter from Alexander Hamilton to the Senate, February 22, 1794).
144. Norman Schachner, Alexander Hamilton, p. 310.
145. Christopher Hitchens, Thomas Jefferson: Author of America, p. 88.
146. Harry Ammon, James Monroe: The Quest for National Identity, p. 109.
147. Garry Wills, “Negro President”: Jefferson and the Slave Power, p. 66.
148. Henry Adams, The Life of Albert Gallatin, p. 119.
149. (Letter from Albert Gallatin to Hannah Gallatin, December 15, 1793).
150. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 201.
151. John C. Hamilton, Alexander Hamilton, Volume V, p. 480.
152. (Letter of Albert Gallatin to Thomas Clare, March 5, 1794).
153. E. James Ferguson, The Power of the Purse: A History of American Public Finance, 1776-1790, p. 292.
154. Ron Chernow,Alexander Hamilton, p. 343.
155. (Letter from Alexander Hamilton to George Washington, August 10, 1792).
156. John Ferling, The Ascent of George Washington: The Hidden Political Genius of an American Icon, p. 329-330.
157. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 21.
158. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 45.
159. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 197.
160. Forest McDonald, Alexander Hamilton, p. 297.
161. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 397.
162. Joel Achenbach, The Grand Idea: George Washington’s Potomac and the Race to the West, p. 194.
163. Forrest McDonald Alexander Hamilton: A Biography, p. 297.
164. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 135.
165. Charles Sellers, The Market Revolution: Jacksonian America, 1815-1846, p. 73.
166. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p.
167. James Roger Sharp, American Politics in the Early Republic: The New Nation in Crisis, pp. 94-95.
168. (Letter from Alexander Hamilton to George Washington, August 10, 1792).
169. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability: An Interpretative Profile, p. 6.
170. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 251.
171. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, pp. 66-67.
172. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 398.
173. James Roger Sharp, American Politics in the Early Republic: The New Nation in Crisis, p. 95.
174. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 405.
175. Forrest McDonald Alexander Hamilton: A Biography, p. 299.
176. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 67.
177. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, pp. 64-65.
178. Richard Norton Smith, Patrician, p. 216.
179. Henry Adams, Life of Albert Gallatin, p. 137.
180. Jay Winik, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, p. 486.
181. Jay Winik, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, p. 487.
182. Nathan Schachner, Alexander Hamilton, pp. 334-335.
183. Richard Norton Smith, Patriarch, p. 217.
184. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 212.
185. Forrest McDonald Alexander Hamilton: A Biography, p. 301
186. James Thomas Flexner, George Washington: Anguish and Farewell (1793-1799), p. 169.
187. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 407.
188. James Roger Sharp, American Politics in the Early Republic: The New Nation in Crisis, pp. 95, 97.
189. Nathan Schachner, Alexander Hamilton, p. 335.
190. Forrest McDonald Alexander Hamilton: A Biography, p. 302.
191. John C. Miller, Alexander Hamilton: Portrait in Paradox, pp. 407-408.
192. Nathan Schachner, Alexander Hamilton, p. 336.
193. Ron Chernow, Alexander Hamilton, p. 476.
194. Richard Brookhiser, Alexander Hamilton: American, p. 197.
195. Henry Adams, Life of Albert Gallatin, p. 139.
196. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 409.
197. (Letter from Albert Gallatin to Hannah Gallatin, December 7, 17940.
198. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability: An Interpretative Profile, p. 6.
199. Roger G. Kennedy, Burr, Hamilton, and Jefferson: A Study in Character, p. 154.
200. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 114.
201. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 100.
202. (Letter from Alexander Hamilton to Angelica Church, October 23, 1794).
203. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 202.
204. Forrest McDonald, The American Presidency: An Intellectual History, p. 240.
205. Jay Winik, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, p. 489-490.
206. James Roger Sharp, American Politics in the Early Republic: The New Nation in Crisis, p. 100.
207. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 413.
208. Lance Banning, Jefferson & Madison: Three Conversations from the Founding, p. 66-67.
209. Forrest McDonald Alexander Hamilton: A Biography, p. 296.
210. (Letter from Thomas Jefferson to James Madison, March 6, 1796).
211. (Letter from James Madison to Thomas Jefferson, January 31, 1796).
212. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 31.
213. Henry Adams, The Life of Albert Gallatin, p. 155.
214. John Ferling, John Adams: A Life, p. 363.
215. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, pp. 31-32.
216. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 56.
217. John Austin Stevens, Albert Gallatin, pp. 179, 184.
218. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 33.
219. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, p. 79.
220. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 206.
221. Holly Cowan Shulman,”Finding Hannah: Hannah Gallatin Through the Eyes of Dolley Madison,” The New-York Journal of History, p. 23.
222. Richard Brookhiser, Alexander Hamilton: American, p. 131.
223. Ron Chernow, Alexander Hamilton, p. 490.
224. Ron Chernow, Alexander Hamilton, p. 491.
225. Henry Adams, The Life of Albert Gallatin, p. 153.
226. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 376.
227. Henry Adams, The Life of Albert Gallatin, p. 169.
228. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 293.
229. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability: An Interpretative Profile, p. 8.
230. Henry Adams, The Life of Albert Gallatin, p. 155.
231. Henry Adams, The Life of Albert Gallatin, p. 161.
232. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, pp. 57, 59
233. John C. Hamilton, Life of Alexander Hamilton: A history of the Republic of the United States, Volume 6, p. 254.
234. Henry Adams, The Life of Albert Gallatin, p. 166.
235. Henry Adams, The Life of Albert Gallatin, p.244.
236. Nathan Schachner, Aaron Burr: A Biography, p.198.
237. Henry Adams, The Life of Albert Gallatin, p. 251.
238. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 132.
239. Henry Adams, The Life of Albert Gallatin, p. 289.
240. Roger G. Kennedy, Burr, Hamilton, and Jefferson: A Study in Character, p. 170.
241. John Austin Stevens, Albert Gallatin, pp. 178-179.
242. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 141.
243. Irving Brant, The Fourth President: A Life of James Madison, p. 306.
244. Henry Adams, The Life of Albert Gallatin, p. 263.
245. Leonard D. White, The Jeffersonians, p. 135.
246. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 136.
247. (Letter from Albert Gallatin to Thomas Jefferson, May 30, 1805).
248. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, pp. 138-139.
249. Garry Wills, James Madison, p. 63.
250. Harry Ammon, James Monroe: The Quest for National Identity, p. 321.
251. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 187.
252. Henry Adams, The Life of Albert Gallatin, pp. 391, 397.
253. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 198.
254. Garry Wills, James Madison, p. 65.
255. Allen Johnson, Jefferson and His Colleagues: A Chronicle of the Virginia Dynasty, p. 182.
256. Henry Adams, The Life of Albert Gallatin, p. 434.
257. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 57.
258. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 101.
259. John Austin Stevens, Albert Gallatin, p. 180.
260. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 56.
261. Henry Adams, The Life of Albert Gallatin, p. 300.
262. (Letter from Albert Gallatin to Thomas Jefferson, ca. November 16, 1791).
263. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, p. 78.
264. Ralph Ketcham, James Madison: A Biography, p. 413.
265. Dumas Malone, Jefferson the President: First Term 1801-1805, p. 56.
266. Henry Adams, The Life of Albert Gallatin, p. 300.
267. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 217, 143.
268. Jon Meacham, Thomas Jefferson: The Art of Power, p. 357.
269. Henry Adams, The Life of Albert Gallatin, p. 297.
270. Forrest McDonald, The Presidency of Thomas Jefferson, pp. 39-40.
271. Henry Adams, The Life of Albert Gallatin, p. 302.
272. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 54.
273. John Austin Stevens, Albert Gallatin, p. 245.
274. Forrest McDonald, The Presidency of Thomas Jefferson, p. 43.
275. Gordon S. Wood, Empire of Liberty, p. 298.
276. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 231.
277. Noble E. Cunningham, Jr., In Pursuit of Reason: The Life of Thomas Jefferson, p. 247.
278. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 145.
279. James Hamilton, Reminiscences of James A Hamilton, p. 23.
280. Allen Johnson, Jefferson and His Colleagues: A Chronicle of the Virginia Dynasty, p. 20.
281. Ralph Ketcham, James Madison: A Biography, p. 411.
282. Leonard D. White The Jeffersonians. p. 138.
283. Garry Wills, James Madison, p. 51.
284. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 228.
285. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 167.
286. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 145.
287. Joseph J. Ellis, American Sphinx: The Character of Thomas Jefferson, p. 193.
288. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 17.
289. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 90.
290. (Letter from Alexander Hamilton to George Washington, September 23, 1788).
291. (Albert Gallatin, October 7, 1789).
292. Ron Chernow, Alexander Hamilton, p. 229.
293. Broadus Mitchell, Heritage from Hamilton, p. 38.
294. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, p. 6.
295. Richard Brookhiser, Alexander Hamilton: American, p. 8.
296. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 363.
297. John Steele Gordon, Hamilton’s Blessing: The Extraordinary Life and Times of our National Debt, p. 20.
298. Nathan Schachner, Alexander Hamilton, p. 231.
299. Leonard D. White, The Jeffersonians. pp. 476-477.
300. Joel Achenbach, The Grand Idea: George Washington’s Potomac and the Race to the West, p. 232.
301. (Letter from Albert Gallatin to Hannah Gallatin, December 7, 1798).
302. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 17.
303. Richard Brookhiser, Alexander Hamilton: American, p. 156.
304. Richard Norton Smith, Patrician, p. 238.
305. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 122.
306. Ron Chernow, Alexander Hamilton, p. 397.
307. Richard Brookhiser, Alexander Hamilton: American, p. 2.
308. Jay Winik, The Great Upheaval: America and the Birth of the Modern World, 1788-1800, p. 478.
309. Ron Chernow, Alexander Hamilton, p. 137.
310. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 138.
311. Henry Adams, The Life of Albert Gallatin, pp. 167, 377.
312. Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies, pp. 31, 33.
313. John Austin Stevens, Albert Gallatin, p. 188 (Letter from Albert Gallatin to Thomas Jefferson, November 16, 1801).
314. Henry Adams, The Life of Albert Gallatin, pp. 270-271.
315. Sean Wilentz, The Rise of American Democracy: Jefferson to Lincoln, p. 101.
316. (Letter from Albert Gallatin to James Madison, November 8, 1809.
317. John Austin Stevens, Albert Gallatin, pp. 246-247.
318. Nathan Schachner, Alexander Hamilton, p. 228.
319. (Letter from Albert Gallatin to John Badollet, May 12, 1809).
320. Ron Chernow, Alexander Hamilton, pp. 293-294.
321. Nathan Schachner, Alexander Hamilton, p. 250.
322. John Steele Grodon, Business and Government, p. 170.
323. Ron Chernow, Alexander Hamilton, p. 287.
324. (Letter from Alexander Hamilton to Philip Livingston, April 2, 1791).
325. Forrest McDonald Alexander Hamilton: A Biography, pp. 211-212.
326. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 151.
327. Forrest McDonald, The Presidency of Thomas Jefferson, p. 42.
328. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 118.
329. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability: An Interpretative Profile, p. 2.
330. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 217.
331. Roger G. Kennedy, Burr, Hamilton, and Jefferson: A Study in Character, p. 156.
332. James Thomas Flexner, Washington: The Indispensable Man, p. 308.
333. Ron Chernow, Alexander Hamilton, p. 60.
334. (Alexander Hamilton, A Full Vindication of the Measures of Congress, December 1774).
335. Ron Chernow, Alexander Hamilton, p. 334.
336. Henry Cabot Lodge, Alexander Hamilton, pp. 271-272.
337. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 34.
338. Nathan Schachner, Alexander Hamilton, p. 294.
339. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 100.
340. Gordon S. Wood, Revolutionary Characters: What Made the Founders Different, p. 137.
341. Fergus M. Bordewich, Washington: The Making of the American Capital, p. 232.
342. John C. Miller, Alexander Hamilton: Portrait in Paradox, pp. 352-353, 4.
343. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, pp. 26, 35.
344. Henry Adams, The Life of Albert Gallatin, p. 154.
345. John Austin Stevens, Great Statesmen, p. 300.
346. Allen Johnson, Jefferson and His Colleagues: A Chronicle of the Virginia Dynasty, p. 220.
347. Garry Wills, James Madison, p. 127.
348. John Austin Stevens, Great Statesmen, p. 300.
349. Harry Ammon, James Monroe: The Quest for National Identity, pp. 319-320.
350. John Austin Stevens, Albert Gallatin, p. 204.
351. Allen Johnson, Jefferson and His Colleagues: A Chronicle of the Virginia Dynasty, p. 220.
352. John Austin Stevens, Albert Gallatin, p. 215.
353. Allen Johnson, Jefferson and His Colleagues: A Chronicle of the Virginia Dynasty, p.
354. Garry Wills, James Madison, p. 144.
355. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 181
356. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 44 (Albert Gallatin, Biographical Sketch).
357. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 31.
358. Henry Adams, The Life of Albert Gallatin, p. 198.
359. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 133
360. Charles Sellers, The Market Revolution: Jacksonian America, 1815-1846, p. 60.
361. (Letter from Albert Gallatin to Thomas Jefferson, April 13, 1803).
362. Ron Chernow, Alexander Hamilton, p 294.
363. (Letter from Albert Gallatin to Thomas Jefferson, January 13, 1803).
364. Henry Adams, The Life of Albert Gallatin, p. 320. (Letter from Albert Gallatin to Thomas Jefferson, January 13, 1803).
365. Henry Adams, The Life of Albert Gallatin p. 317.
366. Raymond a Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 181
367. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 36.
368. (Letter from Albert Gallatin to John W. Eppes, 1813).
369. Leonard D. White, The Jeffersonians. p. 476.
370. John Austin Stevens, Albert Gallatin, p. 290.
371. Robert E. Wright an David J. Cowen, Financial Founding Fathers: The Men Who Made America Rich, p. 99.
372. John Seelye, Beautiful Machine: Rivers and the Republican Plan, 1755-1825, p. 256.
373. Henry Adams, The Life of Albert Gallatin, p. 352.
374. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 37.
375. (Albert Gallatin, Report on the Subject of DomesticManufactures, 1809).
376. Louis M. Hacker, Alexander Hamilton in the American Tradition, pp. 171.
377. (Alexander Hamilton, Report on Manufactures, December 5, 1791).
378. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, pp. 183-184.
379. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 40.
380. John Austin Stevens, Albert Gallatin, pp. 204, 242.
381. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 34.
382. Ron Chernow, Alexander Hamilton, p. 379.
383. Forrest McDonald, E Pluribus Unum: The Formation of the American Republic, 1776-1790, pp. 190,193.
384. Richard Brookhiser, ‘Washington's New York,” City Journal, Spring 1994.
385. James Grant, John Adams: Party of One, p. 268.
386. Forrest McDonald, E Pluribus Unum: The Formation of the American Republic, 1776-1790, p. 229.
387. Dumas Malone, Jefferson the President: First Term, 1801-1805, pp. 100-101.
388. Henry Adams, The Life of Albert Gallatin, p. 270.
389. John Austin Stevens, Albert Gallatin, p. 191.
390. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 298.
391. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 147.
392. John Austin Stevens, Albert Gallatin, p. 202.
393. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 186.
394. Henry Adams, The Life of Albert Gallatin, p. 175.
395. John Austin Stevens, Albert Gallatin, p. 258.
396. George Rogers Taylor, editor Hamilton and the National Debt, p. 104.
397. Nathan Schachner, Alexander Hamilton, p. 268.
398. Louis M. Hacker, Alexander Hamilton in the American Tradition, pp. 149-150.
399. Richard Norton Smith, Patrician, p. 78.
400. Claude G. Bowers, Jefferson and Hamilton: The Struggle for Democracy in America, p. 74.
401. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 262.
402. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 162.
403. Forrest McDonald Alexander Hamilton: A Biography, p. 194.
404. Ron Chernow, Alexander Hamilton, p. 350.
405. (Alexander Hamilton, Opinion on the Constitutional of the Bank, February 23, 1791).
406. Gordon S. Wood, Empire of Liberty, p. 144.
407. Robert E. Wright an David J. Cowen, Financial Founding Fathers: The Men Who Made America Rich, p. 137.
408. Gordon S. Wood, Empire of Liberty, p. 154.
409. John Steele Gordon, Hamilton’s Blessing: The Extraordinary Life and Times of our National Debt, p. 37.
410. Ron Chernow, Alexander Hamilton, p. 353.
411. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 158.
412. Forrest McDonald, The Presidency of George Washington, p. 114.
413. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 211.
414. Louis M. Hacker, Alexander Hamilton in the American Tradition, p. 161.
415. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 297.
416. Albert Gallatin, Report to Senate, March 3, 1890).
417. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 171.
418. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 39.
419. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 151.
420. (Letter from Albert Gallatin to Thomas Jefferson, December 18, 1803).
421. Jerry Markham, A Financial History of the United States, p. 126.
422. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, pp. 293, 295.
423. John Austin Stevens, Albert Gallatin, p. 253.
424. Henry Adams, The Life of Albert Gallatin, p. 309.
425. (Letter from Thomas Jefferson to Albert Gallatin, July 12, 1803).
426. Joseph J. Ellis, American Sphinx: The Character of Thomas Jefferson, p. 97.
427. John Austin Stevens, Albert Gallatin, p. 254.
428. John Austin Stevens, Albert Gallatin, p. 280.
429. John Austin Stevens, Albert Gallatin, p. 266.
430. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 39.
431. Garry Wills, James Madison, p. 65.
432. John Austin Stevens, Albert Gallatin, pp. 296-297.
433. Garry Wills, James Madison, p. 76.
434. Irving Brant, The Fourth President: A Life of James Madison, p. 453.
435. John Austin Stevens, Albert Gallatin, p. 296.
436. John Austin Stevens, Albert Gallatin, p. 231.
437. John Austin Stevens, Albert Gallatin, p. 234.
438. Garry Wills, James Madison, p. 77.
439. John Austin Stevens, Albert Gallatin, pp. 296-297.
440. John Austin Stevens, Albert Gallatin, p. 297.
441. John Austin Stevens, Albert Gallatin, pp. 208, 257.
442. John Church Hamilton, History of the Republic of the United States of America as Trace in the Writings of Alexander Hamilton and of his Contemporaries, Volume VII, pp. 693-694.
443. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 363.
444. John Austin Stevens, Albert Gallatin, pp. 240, 242.
445. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 312.
446. George Rogers Taylor, editor, Hamilton and the National Debt, p. 106.
447. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 65.
448. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 170.
449. Stanley Elkins & Eric McKitrick, The Age of Federalism: The Early American Republic, 1788-1800, p. 67.
450. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, pp. 100-101.
451. John C. Miller, Alexander Hamilton: Portrait in Paradox, pp. 282-283.
452. Nathan Schachner, Alexander Hamilton, p. 278.
453. Thomas K. McCraw, The Founders and Finance, p. 125.
454. John C. Miller, Alexander Hamilton: Portrait in Paradox, pp. 286, 289.
455. Henry Cabot Lodge, Alexander Hamilton, pp. 130-132.
456. Forrest McDonald Alexander Hamilton: A Biography, pp. 231-232.
457. John C. Miller, Alexander Hamilton: Portrait in Paradox, p.300.
458. Thomas Fleming, “Wall Street’s First Collapse, American Heritage, Winter 2009, p. 58.
459. Nathan Schachner, Alexander Hamilton, p. 281.
460. Nathan Schachner, Alexander Hamilton, pp. 287, 289.
461. Forrest McDonald, The Presidency of George Washington, p. 88.
462. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 309.
463. Thomas C. McCraw, The Founders and Finance, p. 129.
464. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, pp. 170-171
465. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, pp. 704-705.
466. John C. Miller, Alexander Hamilton: Portrait in Paradox, p. 293.
467. Walter A. McDougall, Freedom Just Around the Corner: A New American History, 1585-1828, p. 420.
468. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 706.
469. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 645.
470. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 645.
471. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, pp. 70-71.
472. Noble E. Cunningham, Jr., In Pursuit of Reason: The Life of Thomas Jefferson, p. 312.
473. Henry Adams, The Life of Albert Gallatin, pp. 366-367.
474. Noble E. Cunningham, Jr., In Pursuit of Reason: The Life of Thomas Jefferson, p. 312.
475. Thomas K. McCraw, The Founders and Finance, p. 276.
476. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 654.
477. Nicholas Dungan, Gallatin, America’s Swiss Founding Father, p. 81
478. Henry Adams, The Life of Albert Gallatin, p. 367.
479. Henry Adams, The Life of Albert Gallatin, p. 369.
480. (Letter from Albert Gallatin to Hannah Gallatin, October 30 1807).
481. Garry Wills, James Madison, p. 91.
482. John Austin Stevens, Albert Gallatin, p. 293.
483. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 203.
484. Noble E. Cunningham, Jr., In Pursuit of Reason: The Life of Thomas Jefferson, pp. 315-316.
485. (Letter from Albert Gallatin to Thomas Jefferson, July 29, 1808).
486. Noble E. Cunningham, Jr., In Pursuit of Reason: The Life of Thomas Jefferson, pp. 315-316.
487. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815, p. 647, 656.
488. (Letter from Thomas Jefferson to George Logan, December 27, 1808).
489. Henry Adams, The Life of Albert Gallatin, p. 377.
490. Henry Adams, The Life of Albert Gallatin, p. 379.
491. (Albert Gallatin, Campbell Report, November 1808(.
492. (Albert Gallatin, Annual Report to Congress, December 16, 1808).
493. John Austin Stevens, Albert Gallatin, p. 204.
494. Henry Adams, The Life of Albert Gallatin, p. 387.
495. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, pp. 177-178
496. Charles Sellers, The Market Revolution: Jacksonian America, 1815-1846, p. 68.
497. Thomas K. McCraw, The Founders and Finance: How Hamilton, Gallatin and Other Immigrants Forged a New Economy, p. 208.
498. Henry Adams, The Life of Albert Gallatin, p. 170.
499. Garry Wills, James Madison, p. 107.
500. Henry Adams, The Life of Albert Gallatin, p. 171.
501. Henry Adams, The Life of Albert Gallatin, pp. 206, 202, 200.
502. Henry Adams, The Life of Albert Gallatin, p. 211.
503. Frank Ewing, America’s Forgotten Statesman: Albert Gallatin, p. 117.
504. Henry Adams, The Life of Albert Gallatin, p. 271.
505. Henry Adams, The Life of Albert Gallatin, p. 291.
506. (Letter from Albert Gallatin to Thomas Jefferson, January 18, 1803).
507. John Austin Stevens, Albert Gallatin, p. 245.
508. Albert Sidney Bolles, The Financial History of the United States, from 1789 to 1860, Volume II, p. 213.
509. Garry Wills, James Madison, pp. 109-110.
510. Henry Adams, The Life of Albert Gallatin, p. 353.
511. Henry Adams, The Life of Albert Gallatin, p. 354.
512. (Letter from Albert Gallatin to Thomas Jefferson, May 30, 1805).
513. Henry Adams, The Life of Albert Gallatin, p. 304.
514. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 102.
515. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 61.
516. Henry Adams, The Life of Albert Gallatin, p. 307.
517. (Letter from Albert Gallatin to Hannah Gallatin, July 10, 1807).
518. (Letter from Albert Gallatin to Joseph Nicholson, July 17, 1807).
519. John Austin Stevens, Albert Gallatin, p. 216.
520. Albert Sidney Bolles, The Financial History of the United States, from 1789 to 1860, Volume II, p[. 214-215.
521. Richard Brookhiser, Alexander Hamilton: American, p. 9.
522. Raymond Walters, Jr., Albert Gallatin: Jeffersonian Financier and Diplomat, p. 351.
523. Forrest McDonald Alexander Hamilton: A Biography, p. 121.
524. Gordon S. Wood, Empire of Liberty, pp. 102-104.
525. Richard Brookhiser, Alexander Hamilton: American, p. 9.
526. Larry Schweikart and Michael Allen, A Patriot’s History of the United States, p. 136.
527. Ron Chernow, Alexander Hamilton, p. 6.
528. Ron Chernow, Alexander Hamilton, p. 344.
529. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, pp. 42, 33, 38.
530. (Letter from Albert Gallatin to Chandler Price et al, February 11, 1824).
531. L.B. Kuppenheimer, Albert Gallatin’s Vision of Democratic Stability, p. 27.
532. (Albert Gallatin, report to Pennsylvania Legislature, March 22, 1793).
533. Dumas Malone, Jefferson the President: First Term, 1801-1805, p. 417.
534. Thomas K. McCraw, The Founders and Finance, p. 357.