The Life of Albert Gallatin

To one standing, therefore, as Mr. Gallatin was now standing, on the verge of several years’ inaction, out of which the nation could rescue itself only by a slow process of growth, the ends to be attained and the dangers to be feared would arrange themselves almost axiomatically. War was out of the question, not only because both parties had united against it, but because the Treasury was very rapidly losing its war fund and would soon be unable to promise resources. If peace, therefore, were to be preserved, the policy of commercial restrictions was the only form of protest practicable, and it must again become the task of diplomacy to re-establish the old Jeffersonian “balance” between the belligerents. In other words, diplomacy had become more important than finance.

Candid criticism certainly tends to show that the only national policy which had a chance of success was also the only one which had not a chance of adoption. A sudden, concentrated, and determined attack upon Bonaparte would, in all human probability, have been successful; the Emperor would have given way, and in this case England must also have receded; but this would have been a mere repetition of the Federalist policy of 1798, and the Republican party had no fancy for Federalist precedents. The behavior of Canning had roused so bitter a feeling as to paralyze measures against Bonaparte, while the Republican party was as little competent to imitate the dash and stubborn intensity of the Federalists as the calm temperament of Mr. Madison to lash itself into the fiery impetuosity of John Adams. Nothing remained but to settle the nature and extent of the mild protest which was to be maintained against the armed violence of the two belligerents, and, now that the doors of the State Department were closed in Mr. Gallatin’s face, his only hope was to create a new financial system that would serve to meet the wants of the new political situation as Congress might ultimately give it shape. Throwing behind him, therefore, all his old hopes and ambitions, all schemes for discharging debt and creating canals, roads, and universities, he turned his energies to the single point of defending the Treasury and resisting follies. He 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. The experience of only last winter had shown how readily Congress wasted its resources: although Mr. Gallatin had succeeded in partially checking the navy appropriations, nearly three millions were voted, and two and a half millions were actually spent on the navy in 1809, without increasing its force or effecting the smallest good; and meanwhile the surplus upon which Mr. Gallatin had relied to carry on the first year of war was rapidly vanishing, while the militia were not organized, the forts were not completed, arms were not on hand, and military roads were wholly wanting.

To raise by taxation, so long as peace lasted, all the money to be spent by Congress, was the rule which Mr. Gallatin was now struggling to enforce. If Congress appropriated money, Congress must lay taxes. To maintain this ground required a firm, almost a rough hand, and unless both the Cabinet and the Senate were ready to support the Secretary of the Treasury in his effort, his position was untenable, and resignation must follow of course.

The question whether the Cabinet and Senate would support Mr. Gallatin was, therefore, the necessary point to decide in advance. In the Cabinet, Mr. Robert Smith was the dangerous element. In the Senate, General Samuel Smith and his friend Mr. Giles were the chief disturbing forces, since without them the fulminations of Leib and the Aurora offered, after all, no very serious danger. Unfortunately, a circumstance had now occurred which seriously embittered the relations between Mr. Gallatin and the Smiths. The failure and disappearance of the navy agent at Leghorn disclosed a somewhat loose way of managing business in the Navy Department, which had bought exchange on Leghorn, largely in bills on Samuel Smith and his relations, in excess of its wants, while at the same time it had neglected to make its naval officers draw on Leghorn, so that they had drawn on London at considerable extra expense. Thus, at the close of the Tripoli war a large balance had remained in the hands of the navy agent at Leghorn, which was partly sent back in specie to America by a ship of war, and partly carried off by the navy agent to Paris, where he was arrested by the interposition of our minister, General Armstrong, and compelled to disgorge. In all this there was enough to irritate Mr. Gallatin, who had for eight years endured, with such patience as he could command, the loose and extravagant habits of the Navy Department, and who was now making a new effort to enforce a thorough system of accountability in that department. But there appeared at first sight to be something still more objectionable in this transaction. Mr. Robert Smith, as Secretary of the Navy, had bought bills of exchange to the amount of a quarter of a million dollars, within two years, from his brother General Smith and 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 by collusion left in the hands of General Smith’s firm until it suited their convenience to remit it to Leghorn. The effect of this operation was to give the firm of Smith & Buchanan the use of public money without obliging them to make the same immediate provision for honoring their bills as would in other cases have been necessary; to give them also the almost exclusive privilege of selling bills on Leghorn, and to throw upon the public the risk arising from protested bills. This affair came to the knowledge of Mr. Gallatin at the time when General Smith was, with the aid of Mr. Giles and Dr. Leib, forcing Mr. Robert Smith upon Mr. Madison as Secretary of State, and in conjunction with his brother-in-law, Mr. Wilson Cary Nicholas, overthrowing Mr. Gallatin’s plans of public expenditure. He was very indignant, and expressed his opinions to his friend Joseph H. Nicholson, who made no secret of the story and used it to prevent the re-election of General Smith to the Senate. In the extra session in June, 1809, John Randolph, at the urgent request of Judge Nicholson, procured the appointment of an investigating committee, which published the facts. Mr. Gallatin was called upon for a report, which he made in February, 1811. General Smith on his side made a statement which certainly relieved him to a considerable extent from the weight of some of the most doubtful parts of the transaction. Mr. Gallatin had nothing to do with Judge Nicholson’s proceeding, and gave it no encouragement, but his feeling in regard to the scandal was very strong, and after the attacks made upon the Smiths, both by the investigating committee of the House and by the Baltimore press, the following exchange of letters occurred:

GENERAL SAMUEL SMITH TO GALLATINBaltimore, 26th June, 1809.

Sir, – I do myself the honor to enclose two papers for your perusal. The editors of the Federal Republican make use of your name to bolster them up in the nefarious charge they have made against me, in the following manner, to wit: “Mr. Gallatin, we understand, spoke of this transaction in terms of great indignation.” I will not believe that any of that indignation could have been directed at me. I believe it impossible that any man who has the least pretensions to character would commit an act so base as that charged on me, to wit: “to secure a debt which I considered bad by transferring the same to the Navy Department, and thus involving the United States in the loss.” Some time after my house drew the last bill (for I was at Washington), an evil report had been sent from Leghorn relative to Degen, Purviance & Co., in consequence whereof Mr. Oliver (who had a ship ready to sail to their address) sent an agent, who, finding the house in as good credit as any in that city, did put the cargo under their care. I thought the house superior to any in Leghorn.

I am, sir, your obedient servant,S. Smith.GALLATIN TO GENERAL SMITHTreasury Department, 29th June, 1809.

Sir, – I received the day before yesterday your letter of 26th inst., enclosing two Baltimore papers.

I have no other knowledge of the circumstances connected with the naval agency of Degen and Purviance than what is derived from their account as stated by the accountant of the Navy Department. The transaction, such as it appears there, is, under all its aspects, the most extraordinary that has fallen within my knowledge since I have been in this Department. It has certainly left very unfavorable impressions on my mind, and these have on one occasion been communicated verbally to a friend. Yet I hardly need say that I never supposed that the bills had been sold to government for the purpose “of securing a debt which you then considered bad, and of thus throwing the loss on the United States.” But I did believe that you had drawn without having previously placed sufficient funds in the hands of Degen and Purviance, and that they had accepted your bills and passed the amount to the credit of the United States, without having at the time in their hands sufficient funds belonging to you. That this was my impression you will perceive by the enclosed extract of a letter to Mr. Armstrong; and Mr. Purviance’s statement, which you enclosed to me, shows that I was not mistaken. I do not intend to comment on this and other circumstances of the case. Taking them altogether, I have believed that, if we failed in our endeavors to recover the money from Degen and from Mr. Purviance, we might have recourse against the drawers of the bills.

I am, sir, &c.

Such a letter was not calculated to conciliate the Smiths, and appears to have received no reply. General Smith ultimately secured his re-election to the Senate. As the case stood, therefore, Mr. Gallatin could count with absolute certainty upon the determined personal hostility of General Smith, Mr. Giles, and Dr. Leib, backed by the vigorous tactics of Duane and the Aurora, and he had to decide the very serious question whether he should remain in the Cabinet in the face of so alarming a party defection, or whether he should give way to it and retire. On the 11th May, 1809, he wrote to Judge Nicholson that the ensuing session would decide this point. Judge Nicholson replied in his own impetuous style: “Your retiring from office is a subject upon which I do not like to reflect, because I believe that you will be a great public loss. It will be a loss that Mr. Madison will feel immediately, but the public will not perceive it in its full extent for some years. When the government gets entirely in the possession of those men who are resolved to seize it, and their selfish and mercenary motives and conduct are hereafter exposed, as they must be, the public will then perceive how important it would have been to retain a man who was at once capable and honest. But I think, were I in your situation, I should not continue in the present state of the Cabinet, and I should tell Mr. Madison that it was impossible to serve with Mr. Smith after a development of the late transaction. The most perverse man must acknowledge the absolute dishonesty that is apparent on the face of it. I have never believed that you took as strong ground in the Cabinet as you ought to do, and it is time that you should do more than content yourself with a bare expression of opinion. I should say that Mr. Smith or myself must go out, and Mr. Madison ought to know you too well to believe that this contained anything of a threat. If you are disposed to continue in the Treasury, the Department of State might certainly be filled with an abler and a better man. Our love to Mrs. Gallatin. Tell her I agree with her that vice and corruption do rule everywhere, and it arises entirely from the ill-timed modesty of virtue.”

This last paragraph is in reply to the concluding paragraph of Mr. Gallatin’s letter: “Mrs. Gallatin says that vice and intrigue are all-powerful here and there [in Baltimore]. I tell her that virtue is its own reward, and she insists that that language is mere affectation.”

What Mr. Gallatin’s frame of mind now was may be seen from a letter to his old friend Badollet, whom he had sent out to the land-office at Vincennes, in the Indiana Territory, and who, discovering that vice and intrigue ruled even there, was carrying on a fierce and passionate struggle with General W. H. Harrison, the governor, to prevent the introduction of negro slavery.

GALLATIN TO BADOLLETWashington, 12th May, 1809.

I have received your letter of 7th March, and am as desirous as yourself of a refreshing interview. The summer session has prevented my going to Fayette this spring, but I must go there either in August or September. I cannot yet determine the precise week or month, and will not be able to stay more than four or five days, unless I return at that time with my family for the purpose of permanently residing there, which is not impossible, though not yet decided on. The decision, not to induce you into mistake, rests entirely with myself. Will it be prudent for you to incur the expense and trouble of so long a journey merely in order to see me? It was with regret that I saw you go to Vincennes; for I apprehended the climate, and I hated the distance. But there was no option. The Ohio representative claimed for residents there the exclusive right of filling the Federal offices in that State, and it was your express opinion that you could not subsist in Greene County. The same obstacles seem to oppose a change. I see no prospect of your being transferred to a nearer district, and you will find the same difficulty in supporting your family in case you should return to Pennsylvania. Still, I not only feel your situation, but I think that your happiness in the eve of life will in part depend on our spending it in the same vicinity. I know that it will be the case with me. If you can perceive any means in which I can assist to attain that object, state it fully and in all its details; that we may attempt whatever is practicable, but nothing rashly. What would your little property in Indiana sell for? What would be the expenses of bringing your family up the river? What are the precise ages and capacities of your children? I do not know what you can do yourself without an office, but I will not prejudge, and I earnestly wish that we may discover some means of reunion.

As to your squabbles and disappointment, they are matters of course. At what time or in what country did you ever hear that men assumed the privilege of being more honest than the mass of the 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. But I may add that you practise better than I do, your complaining of the result only excepted. The purity with which you shall have exercised the duties of land-officer may be felt and continue to operate after you have ceased to act. And if you have had a share in preventing the establishment of slavery in Indiana, you will have done more good, to that part of the country at least, than commonly falls to the share of man. Be that feeling your reward. When you are tired of struggling with vice and selfishness, rest yourself, mind your own business, and fight them only when they come directly in your way.

Give my best and affectionate love to your worthy wife, who has been your greatest comfort in this world, and on whose judgment you may rely with great safety in any plan you may form.

Ever yours.

Mr. Gallatin did not follow the advice of Judge Nicholson. After the summer session of this year was over, the sudden disavowal by the British government of Mr. Erskine’s arrangement threw pressing burdens upon his shoulders. In reply to his summons to Washington, Mr. Madison wrote from Montpelier that he did not think his presence there necessary. On the 9th August the President’s proclamation was issued, accompanied by a circular from the Treasury reviving the Non-Importation Act, and the country settled back to its old condition of chronic complaint and discomfort. Nothing more could be done till the arrival of the new British envoy, Mr. Jackson, and the meeting of Congress, nor could energetic action be expected even then.

After the proclamation was issued, Mr. and Mrs. Gallatin went into Virginia to visit the Madisons, and the whole party, towards the end of August, arrived at Monticello. While there, Mr. Gallatin opened his mind fully to his friends, and the triumvirate deliberated solemnly upon the situation. What passed can only be inferred from the two following letters. No decisive action was taken or asked. Mr. Gallatin went no further than to explain his difficulties, leaving Mr. Madison to act as he pleased.

JEFFERSON TO GALLATINMonticello, October 11, 1809.

Dear Sir – …I have reflected much and painfully on the change of dispositions which has taken place among the members of the Cabinet since the new arrangement, as you stated to me in the moment of our separation. It would be indeed a great public calamity were it to fix you in the purpose which you seemed to think possible. I consider the fortunes of our Republic as depending in an eminent degree on the extinction of the public debt before we engage in any war; because that done we shall have revenue enough to improve our country in peace and defend it in war without recurring either to new taxes or loans. But if the debt should once more be swelled to a formidable size, its entire discharge will be despaired of, and we shall be committed to the English career of debt, corruption, and rottenness, closing with revolution. The discharge of the debt, therefore, is vital to the destinies of our government, and it hangs on Mr. Madison and yourself alone. We will never see another President and Secretary of the Treasury making all other objects subordinate to this. Were either of you to be lost to the public, that great hope is lost. I had always cherished the idea that you would fix on that object the measure of your fame and of the gratitude which our country will owe you. Nor can I yield up this prospect to the secondary considerations which assail your tranquillity. For sure I am, they never can produce any other serious effect. Your value is too justly estimated by our fellow-citizens at large, as well as their functionaries, to admit any remissness in their support of you. 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. You have nothing, therefore, to apprehend in the dispositions of Congress, and still less of the President, who above all men is the most interested and affectionately disposed to support you. I hope, then, you will abandon entirely the idea you expressed to me, and that you will consider the eight years to come as essential to your political career. I should certainly consider any earlier day of your retirement as the most inauspicious day our new government has ever seen. In addition to the common interest in this question, I feel, particularly for myself, the considerations of gratitude which I personally owe you for your valuable aid during my administration of public affairs, a just sense of the large portion of the public approbation which was earned by your labors and belongs to you, and the sincere friendship and attachment which grew out of our joint exertions to promote the common good, and of which I pray you now to accept the most cordial and respectful assurances.

GALLATIN TO JEFFERSONWashington, November 8, 1809.

Dear Sir, – I perused your affectionate letter of the 11th ult. with lively sensations of pleasure, excited by that additional evidence of your continued kindness and partiality. 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. [Had I listened only to those feelings, I would have resigned and probably taken this winter a seat in Congress, which as a personal object would have been much more pleasing than my present situation, and also better calculated to regain the ground which to my surprise I found I had lost at least in one of the branches of the Legislature. After mature consideration I relinquished the idea, at least for that time, in a great degree on account of my personal attachment to Mr. Madison, which is of old standing, I am sure reciprocal, and strengthened from greater intimacy; and also because I mistrusted my own judgment, and doubted whether I was not more useful where I was than I could be as a member of Congress. All this passed in my mind before the last session; and the communication which I made to you at Monticello arose from subsequent circumstances.]98

Yet I can assure you that I will not listen to those feelings in forming a final determination on the subject on which I conversed with you at Monticello. The gratitude and duty I owe to the country which has received me and honored me beyond my deserts, the deep interest I feel in its future welfare and prosperity, the confidence placed by Mr. Madison in me, my personal and sincere attachment for him, the desire of honorably acquiring some share of reputation, every public and private motive would induce me not to abandon my post, if I am permitted to retain it, and if my remaining in office can be of public utility. But in both respects I have strong apprehensions, to which I alluded in our conversation. It has seemed to me from various circumstances that those who thought they had injured were disposed to destroy, and that they were sufficiently skilful and formidable to effect their object. As I may not, however, perhaps see their actions with an unprejudiced eye, nothing but irresistible evidence both of the intention and success will make me yield to that consideration. But if that ground which you have so forcibly presented to my view is deserted; if those principles which we have uniformly asserted and which were successfully supported during your Administration are no longer adhered to, you must agree with me that to continue in the Treasury would be neither useful to the public or honorable to myself.

The reduction of the public debt was certainly the principal object in bringing me into office, and our success in that respect has been due both to the joint and continued efforts of the several branches of government and to the prosperous situation of the country. I am sensible that the work cannot progress under adverse circumstances. If the United States shall be forced into a state of actual war, all the resources of the country must be called forth to make it efficient, and new loans will undoubtedly be wanted. But whilst peace is preserved the revenue will, at all events, be sufficient to pay the interest and to defray necessary expenses. I do not ask that in the present situation of our foreign relations the debt be reduced, but only that it shall not be increased so long as we are not at war. 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 whilst peace continues the aggregate of 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. 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. I earnestly wish that my apprehensions may have been groundless, and it is a question which facts and particularly the approaching session of Congress will decide. No efforts shall be wanted on my part in support of our old principles. But, whatever the result may be, I never can forget either your eminent services to the United States, nor how much I owe to you for having permitted me to take a subordinate part in your labors.