The navy found no more favor in his eyes. He denied that fleets were necessary to protect commerce. He challenged its friends to show, from the history of any nation in Europe as from our own, that commerce and the navy had gone hand in hand. There was no nation except Great Britain, he said, whose navy had any connection with commerce. Navies were instruments of power more calculated to annoy the trade of other nations than to protect that of the nations to which they belonged. The price England had paid for her navy was a debt of three hundred millions of pounds sterling. He opposed appropriations even for the three frigates, United States, Constitution, and Constellation,—the construction of which had been ordered,—the germs of that navy which was later to set his theory at naught, redeem the honor of the flag, protect our commerce, and release the country and the civilized world from ignominious tribute to the Mediterranean pirates, who were propitiated in this very session only at the cost of a million of dollars to the Treasury of the United States, and by the gift of a frigate.

In the debate over the payment of the sum of five millions, which the United States Bank had demanded from the government, the greatest part of which had been advanced on account of appropriations, he lamented the necessity, but urged the liquidation. This was the occasion of another personal encounter. In reply to a charge of Gallatin that the Federalists were in favor of debt, Sedgwick alluded to Gallatin's part in the Whiskey Insurrection, and said that none of those gentlemen whom Gallatin had charged with "an object to perpetuate and increase the public debt" had been known to have combined "in every measure which might obstruct the operation of law," nor had declared to the world "that the men who would accept of the offices to perform the necessary functions of government were lost to every sense of virtue;" "that from them was to be withheld every comfort of life which depended on those duties which as men and fellow-citizens we owe to each other. If," he said, "the gentlemen had been guilty of such nefarious practices, there would have been a sound foundation for the charge brought against them." Gallatin made no reply. This was the one political sin he had acknowledged. His silence was his expiation.

The Treasury Department and its control, past and present, was the object of his unceasing criticism. In April, 1796, he said, "The situation of the gentleman at the head of the department [Wolcott] was doubtless delicate and unpleasant; it was the more so when compared with that of his predecessor [Hamilton]. Both indeed had the same power to borrow money when necessary; but that power, which was efficient in the hands of the late secretary and liberally enough used by him, was become useless at present. He wished the present secretary to be extricated from his present difficulty. Nothing could be more painful than to be at the head of that department with an empty treasury, a revenue inadequate to the expenses, and no means to borrow." Nevertheless he feared that if it were declared that the payment of the debt incurred by themselves were to be postponed till the present generation were over, it might well be expected that the principle thus adopted by them would be cherished, that succeeding legislatures and administrations would follow in their steps, and that they were laying the foundations of that national curse,—a growing and perpetual debt.

On the last day of the session W. Smith had challenged the correctness of Gallatin's charge that there had been an increase of the public debt by five millions under the present administration, and claimed that there were errors in Gallatin's statement of more than four and a half millions. Gallatin defended his figures. At this day it is impossible to determine the merits of this dispute.

One incident of this session deserves mention as showing the distaste of Gallatin for anything like personal compliment, stimulated in this instance, perhaps, by his sense of Washington's dislike to himself. It had been the habit of the House since the commencement of the government to adjourn for a time on February 22, Washington's birthday, that members might pay their respects to the President. When the motion was made that the House adjourn for half an hour, the Republicans objected, and Gallatin, nothing loath to "bell the cat," moved that the words "half an hour" be struck out. His amendment was lost without a division. The motion to adjourn was then put and lost by a vote of 50 nays to 38 ayes. The House waited on the President at the close of the business of the day. On June 1 closed this long and memorable session, in which the assaults of the Republicans upon the administration were so persistent and embarrassing as to justify Wolcott's private note to Hamilton, April 29, 1796, that "unless a radical change of opinion can be effected in the Southern States, the existing establishments will not last eighteen months. The influence of Messrs. Gallatin, Madison, and Jefferson must be diminished, or the public affairs will be brought to a stand." Here is found an early recognition of the political "triumvirate," and Gallatin is the first named.

Gallatin seems to have had some doubts as to his reelection to Congress. As he did not reside in the Washington and Allegheny district, his name was not mentioned as a candidate, and, to use his own words, he expected to "be gently dropped without the parade of a resignation." In his distaste at separation from his wife, the desire to abandon public life grew upon him. But personal abuse of him in the newspapers exasperating his friends, he was taken up again in October, and he arrived on the scene, he says, too late to prevent it. He had no hope, however, of success, and was resolved to resign a seat to which he was in every way indifferent. "Ambition, love of power," he wrote to his wife on October 16, he had never felt, and he added, if vanity ever made one of the ingredients which impelled him to take an active part in public life, it had for many years altogether vanished away. He was nevertheless reelected by the district he had represented.

* * * * *

The second session of the fourth Congress began on December 5, 1796. At the beginning of this session Mr. Gallatin took the reins of the Republican party, and held them till its close. The position of the Federalists had been strengthened before the country by the energy of Washington, who, impatient of the delays which Great Britain opposed to the evacuation of the posts, marched troops to the frontier and obtained their surrender. Adet, the new French minister, had dashed the feeling of attachment for France by his impudent notice to the President that the dissatisfaction of France would last until the executive of the United States should return to sentiments and measures more conformable to the interests and friendships of the two nations. In September Washington issued his Farewell Address, in which he gave the famous warning against foreign complications, which, approved by the country, has since remained its policy; but neither the prospect of his final withdrawal from the political and official field, nor the advice of Jefferson to moderate their zeal, availed to calm the bitterness of the ultra Republicans in the House.

The struggle over the answer to the President's message, which Fisher Ames on this occasion reported, was again renewed. An effort was made to strike out the passages complimentary to Washington and expressing regret at his approaching retirement. Giles, who made the motion, went so far as to say that he 'wished him to retire, and that this was the moment for his retirement, that the government could do very well without him, and that he would enjoy more happiness in his retirement than he possibly could in his present situation.' For his part he did not consider Washington's administration either "wise or firm," as the address said. Gallatin made a distinction between the administration and the legislature, and in lieu of the words, wise, firm, and patriotic administration, proposed to address the compliment directly to the wisdom, firmness, and patriotism of Washington. But Ames defended his report, and it was adopted by a vote of 67 to 12. Gallatin voted with the majority, but Livingston, Giles, and Macon held out with the small band of disaffected, among whom it is amusing also to find Andrew Jackson, who took his seat at this Congress to represent Tennessee, which had been admitted as a State at the last session.[5]

The indebtedness of the States to the general government, in the old balance sheet, on the payment of which Gallatin insisted, was a subject of difference between the Senate and the House. Gallatin was appointed chairman of the committee of conference on the part of the House. The reduction of the military establishment, which he wished to bring down to the footing of 1792, was again insisted upon. Gallatin here ingeniously argued against the necessity for the number of men proposed, that it was a mere matter of opinion, and if it was a matter of opinion, it was not strictly necessary, because if necessary it was no longer a matter of opinion. Naval appropriations were also opposed, on the ground that a navy was prejudicial to commerce. Taxation, direct and indirect, and compensation to public officers were also subjects of debate at this session. On the subject of appropriations, general or special, he was uncompromising. He charged upon the Treasury Department that notwithstanding the distribution of the appropriations they thought themselves at liberty to take money from an item where there was a surplus and apply it to another where it was wanted. To check such irregularity, he secured the passage of a resolution ordering that "the several sums shall be solely applied to the objects for which they are respectively appropriated," and tacked it to the appropriation bill. The Senate added an amendment removing the restriction, but Gallatin and Nicholas insisting on its retention, the House supported them by a vote of 52 to 36, and the Senate receded.

Notwithstanding the apparent enthusiasm of the House in the early part of the session, when the tricolor of France, a present from the French government to the United States, was sent by Washington to Congress, to be deposited with the archives of the nation, French influence was on the wane. The common sense of the country got the better of its passion. In the reaction the Federalists regained the popular favor for a season.

Whatever latent sympathy the French people may have had for America as the nation which set the example of resistance to arbitrary rule, the French government certainly was moved by no enthusiasm for abstract rights. Its only object was to check the power of their ancient enemy, and deprive it of its empire beyond the seas. Nevertheless, France did contribute materially to American success. The American government and people acknowledged the value of her assistance, and, in spite of the prejudices of race, there was a strong bond of sympathy between the two nations; and when, in her turn, France, in 1789, threw off the feudal yoke, she expected and she received the sympathy of America. Beyond this the government and the people of the United States could not and would not go. The position of France in the winter of 1796-97 was peculiar. She was at war with the two most formidable powers of Europe,—Austria and England, the one the mistress of Central Europe, the other supreme ruler of the seas. The United States was the only maritime power which could be opposed to Great Britain. The French government determined to secure American aid by persuasion, if possible, otherwise by threat. The Directory indiscreetly appealed from the American government to the American people, forgetting that in representative governments these are one. Nor was the precedent cited in defense of this unusual proceeding—namely, the appeal of the American colonists to the people of England, Ireland, and Canada to take part in the struggle against the British government—pertinent; for that was an appeal to sufferers under a common yoke.

The enthusiasm awakened in France by the dramatic reception of the American flag, presented by Monroe to the French Convention, was somewhat dampened by the cooler manner with which Congress received the tricolor, and was entirely dashed by the moderation of the reply of the House to Washington's message. The consent of the House to the appropriations to carry out the Jay Treaty decided the French Directory to suspend diplomatic relations with the United States. The marvelous successes of Bonaparte in Italy over the Austrian army encouraged Barras to bolder measures. The Directory not only refused to receive Charles C. Pinckney, the new American minister, but gave him formal notice to retire from French territory, and even threatened him with subjection to police jurisdiction. In view of this alarming situation, President Adams convened Congress.

The first session of the fifth Congress began at Philadelphia on Monday, May 15, 1797. Jonathan Dayton was reelected speaker of the House. Some new men now appeared on the field of national debate: Samuel Sewall and Harrison Gray Otis from Massachusetts, James A. Bayard from Delaware, and John Rutledge, Jr., from South Carolina. Madison and Fisher Ames did not return, and their loss was serious to their respective parties. Madison was incontestably the finest reasoning power, and Ames, as an orator, had no equal in our history until Webster appeared to dwarf all other fame beside his matchless eloquence. Parties were nicely balanced, the nominal majority being on the Federal side. Harper and Griswold retained the lead of the administration party. Giles still led the Republican opposition, but Gallatin was its main stay, always ready, always informed, and already known to be in the confidence of Jefferson, its moving spirit. The President's message was, as usual, the touchstone of party. The debate upon it unmasked opinions. It was to all intents a war message, since it asked provision for war. The action of France left no alternative. The Republicans recognized this as well as the Federalists. They must either respond heartily to the appeal of the executive to maintain the national honor, or come under the charge they had brought against the Federalists of sympathy with an enemy. At first they sought a middle ground. Admitting that the rejection of our minister and the manner of it, if followed by a refusal of all negotiation on the subject of mutual complaints, would put an end to every friendly relation between the two countries, they still hoped that it was only a suspension of diplomatic intercourse. Hence, in response to the assurance in the message that an attempt at negotiation would first be made, Nicholas moved an amendment in this vein. The Federalists opposed all interference with the executive, but the Republicans took advantage of the debate to clear themselves of any taint of unpatriotic motives in their semi-opposition. The Federalists, repudiating the charge of British influence, held up Genet to condemnation, as making an appeal to the people, Fauchet as fomenting an insurrection, and Adet as insulting the government. The Republicans retorted upon them Grenville's proposition to Mr. Pinckney, to support the American government against the dangerous Jacobin factions which sought to overturn it. Gallatin deprecated bringing the conduct of foreign relations into debate, and hoped that the majority would resist the rashness which would drive the country into war; he claimed that a disposition should be shown to put France on an equal footing with other nations. He would offer an ultimatum to France. Harper closed the debate in a powerful and brilliant speech, opposing the amendment because he was for peace, and because peace could only be maintained by showing France that we were preparing for war. So the rival leaders based their opposite action on a common ground. Dayton, the speaker, now embodied Gallatin's idea in another form, and introduced a paragraph to the effect that "the House receive with the utmost satisfaction the information of the President that a fresh attempt at negotiation will be instituted, and cherish the hope that a mutual spirit of conciliation and a disposition on the part of the United States to place France on grounds as favorable as other countries will produce an accommodation compatible with the engagements, rights, and honor of our nation."

Kittera, who was one of the committee on the address, then moved to add after "mutual spirit of conciliation" the clause, "to compensate for any injury done to our neutral rights," etc. This both Harper and Gallatin opposed. Gallatin objected to being forced to this choice. To vote in its favor was a threat, if compensation were refused; to vote against it was an abandonment of the claim. But he should oppose it, if forced to a choice. The Federal leaders insisted; the previous question was ordered, 51 to 48. Here Mr. Gallatin showed himself the leader of his party. He stated that, the majority having determined the question, it was now a choice of evils, and he should vote for the amendment, and it was adopted, 78 ayes to 21 nays. Among the nays were Harper, the Federalist leader, Giles, the nominal chief of the Republicans, and Nicholas, high in rank in that party. But the last word was not yet said. Edward Livingston, who day by day asserted himself more positively, denied that the conduct of the executive had been "just and impartial to foreign nations," and moved to strike out the statement; Gallatin was more moderate. Though he did not believe that in every instance the government had been just and impartial, yet, generally speaking, it had been so. He did not approve the British treaty, though he attributed no bad motives to its makers; but he did not think that the laws respecting the subordinate departments of the executive and judiciary had been fairly executed. He therefore would not consent to the sentence in the answer to the address, that the House did not hesitate to declare that "they would give their most cordial support to principles so deliberately and uprightly established."

What, he asked, were these principles? Otis denounced this as an artful attempt to cast a censure, not only on the executive, but on all the departments of government, and Allen of Connecticut declared "that there was American blood enough in the House to approve this clause and American accent enough to pronounce it." The rough prejudice of the Saxon against the Latin race showed itself in this language, and expressed the antagonism which Mr. Gallatin found to increase with his political progress. Both the resolution and the amendment were defeated, 53 nays to 45 yeas. But when the final vote came upon the address, Mr. Gallatin, with that practical sense which made him the sheet anchor of his party in boisterous weather, voted with the Federalists and carried the moderate Republicans with him. The vote was 62 to 36. Among the irreconcilables the name of Edward Livingston is recorded.

The answer of the President was a model of good sense. "No event can afford me so much cordial satisfaction as to conduct a negotiation with the French Republic to a removal of prejudices, a correction of errors, a dissipation of umbrages, an accommodation of all differences, and a restoration of harmony and affection to the mutual satisfaction of both nations."

This was the leading debate of the session. The situation was too grave for trifling. On June 5, two days after the President's reply, resolutions were introduced to put the country in a state of defense. Gallatin struggled hard to keep down the appropriations, and opposed the employment of the three frigates, which as yet had not been equipped or manned. If they got to sea, the President would have no option except to enforce the disputed articles of the French treaty. Gallatin laid down also the law of search in accordance with the law of nations, and pointed out that resistance to search or capture by merchantmen would not only lead to war, but was war. In the remaining acts of the session he was in favor of the defense of ports and harbors, with no preference as to fortification on government territory; in favor of a prohibition of the export of arms; against raising an additional corps of artillery; against expatriation of persons who took service under foreign governments. He opposed the duty on salt as unequal and unnecessary, and sought to have the loan, which became necessary, cut down to the exact sum of the deficiency in the appropriations; and finally, on the impeachment of William Blount, Senator of the United States, charged with having conspired with the British government to attack the Spaniards of St. Augustine, he pointed out the true method of procedure in the preparation of the bill of impeachment and the arraignment of the offender.

The House adjourned on July 10. Jefferson complained of the weakness and wavering of this Congress, the majority of which shifted with the breeze of "panic or prowess." This was, however, a very narrow view; for at this session the House fairly represented the prevailing sentiment of the country, which was friendly to France as a nation, but indignant with the insolence of her rulers. Gallatin, in the middle of the session, wrote to his wife that the Republicans "were beating and beaten by turns." He supposed that her father, Commodore Nicholson, 'thought him too moderate and about to trim,' and then declared, 'Moderation and firmness hath ever been, and ever will be, my motto.' Gallatin tells a story of his colleague from Pennsylvania, the old Anti-Federalist, Blair McClanachan, which shows the warmth of party feeling. They were both dining with President Adams, who entertained the members of Congress in turn. "McClanachan told the President that, by God, he would rather see the world annihilated than this country united with Great Britain; that there would not remain a single king in Europe within six months, etc., all in the loudest and most decisive tone."

Jefferson, who, as vice-president, presided over the debates in the Senate, had no cause to complain of any hesitation in that body, in which the Federalists had regained a clear working majority, giving him no chance of a deciding vote.

* * * * *

The second session of the fifth Congress began on November 13, 1797. The words of the President's address, "We are met together at a most interesting period, the situation of the powers of Europe is singular and portentous," was not an idle phrase. The star of Bonaparte already dominated the political firmament. Europe lay prostrate at the feet of the armies of the Directory. England, who was supposed to be the next object of attack, was staggering under the load of debt; and the sailors of her channel fleet had risen in mutiny. Even the Federalists, the aristocrats as Mr. Gallatin delighted to call them, believed that she was gone beyond recovery. But the admirers of France were no better satisfied with the threatening attitude of the Directory towards America, and eagerly waited news of the reception given to the envoys extraordinary, Gerry, Pinckney, and Marshall, whom Adams with the consent of the Senate dispatched to Paris in the summer. Even Jefferson lost his taste for a French alliance, and almost wished there were "an ocean of fire between the new and the old world."

The tone of the President's address was considered wise on all sides, and it was agreed that the answer should be general and not a subject of contention. One of the members asked to be excused from going with the House to the President, but Gallatin showed that, as there was no power to compel attendance, no formal excuse was necessary. When the motion was put as to whether they should go in a body as usual to present their answer, Mr. Gallatin voted in the negative. He nevertheless accompanied the members, who were received pleasantly by President Adams and "treated to cake and wine."

Harper was made the chairman of the Ways and Means Committee. Though of high talents and a fine speaker, Gallatin found him a "great bungler" in the business of the House, a large share of which fell upon his own shoulders as well as the direction of the Republicans, of whom, notwithstanding the jealousy of Giles, he now was the acknowledged leader. As a member for Pennsylvania, Mr. Gallatin presented a memorial from the Quakers with regard to the arrest of fugitive slaves on her soil; the law of Pennsylvania declaring all men to be free who set foot in that State except only servants of members of Congress. There was already an opposition to hearing any petition with regard to slaves, but Gallatin insisted on the memorial taking the usual course of reference to a committee. He directed the House also in the correct path in its legislation as to foreign coins. It was proposed to take from them the quality of legal tender; but he showed that it was policy not to discriminate against such coins until the mint could supply a sufficiency for the use of the country. In this argument he estimated the entire amount of specie in the United States at eight millions of dollars. At this early period in his political career he was acquiring that precise knowledge of the facts of American finance which later served to establish the principles upon which it is based.

This session was noteworthy by reason of the first personal encounter on the floor of the House. It was between two Northern members, Lyon of Vermont and Griswold of Connecticut. Gallatin stood by Lyon, who was of his party, and showed that the House could not expel him, since it was not at the time in organized session. As the Federalists would not consent to censure Griswold, both offenders escaped even a formal reproof. The general bitterness of feeling which marked the summer session was greatly modified in the expectant state of foreign politics; but the occasion for display of political divergence was not long delayed.

On January 18, 1798, Mr. Harper, who led the business of the House, moved the appropriation for foreign intercourse. This was seized upon by the opposition to advance still further their line of attack by a limitation of the constitutional prerogative of the President. In addition to the usual salaries of the envoys to Great Britain and France, appropriations were asked for the posts at Madrid, Lisbon, and Berlin, which last Mr. Adams had designated as a first-class mission. The discussion on the powers of the President, and the extent to which they might be controlled by paring down the appropriations, lifted the debate from the narrow ground of economy in administration to the higher plane of constitutional powers. Nicholas opened on the Republican side by announcing that it was seasonable to bring back the establishment of the diplomatic corps to the footing it had been on until the year 1796. In all governments like our own he declared that there was a tendency to a union and consolidation of all its parts into the executive, and the limitation and annexion of the parts with each other as settled by the Constitution would be destroyed by this influence unless there were a constant attention on the part of the legislature to resist it. The appointment of a minister plenipotentiary to Prussia, with which we had little or no commercial intercourse, offered an opportunity to determine this limitation. Harper said that this was a renewal of the old charge that foreign intercourse was unnecessary, and the old suggestion that our commerce ought to be given up or left to shift for itself. Mr. Gallatin laid down extreme theories which have never yet found practical application. He took the question at once from party or personal ground by admitting that the government was essentially pure, its patronage not extensive, or its effect upon the legislative or any other branch of the government as yet material. The Constitution had placed the patronage in the executive. There he thought it was wisely placed. The legislature would be more corrupt than the executive were it placed with them. While not willing at once to give up political foreign intercourse, he thought that it should by degrees be altogether declined. To it he ascribed the critical situation of the country. Commercial intercourse could be protected by the consular system. He then argued that the power to provide for expenses was the check intended by the Constitution. To this Griswold answered that this doctrine of checks contained more mischief than Pandora's box; Bayard, that the checks were all directed to the executive, and that they would check and counter-check until they stopped the wheels of government.[6] When the President was manacled and at the mercy of the House they would be satisfied. He held the executive to be the weakest branch of the government, because its powers are defined; but the limits of the House are undefined.

As the debate advanced, Nicholas declared that the purpose of the Republicans was to define the executive power and to put an end to its extension through their power over appropriations. Later he would bring in a motion to do away with all foreign intercourse. Goodrich answered that the office of foreign minister was created by the Constitution itself, and the power of appointment was placed in the President. The House might speculate upon the propriety of doing away with all intercourse with foreign powers, but could not decide on it, for political intercourse did not depend on the sending of ministers abroad. Foreign ministers would come here and the Constitution required their reception. The idea that we should have no foreign intercourse was taken from Washington's Farewell Address, but his words applied only to alliances offensive and defensive. If ministers were abandoned, envoys extraordinary must be sent, a much more dangerous practice; the only choice was between ministers and spies. In conclusion he accused the Republicans of making one continuous attack upon the administration, and charged that the opposition to the appropriation bill was not a single measure, but connected with others, and intended to clog the wheels of government.

The purpose of the Republicans being thus declared by Nicholas and squarely met by the friends of the administration, Mr. Gallatin, March 1, 1798, summed up the opposition arguments in an elaborate speech three hours and a quarter in length. He denied the novel doctrine that each department had checks within itself, but none upon others; he claimed that the principle of checks is admitted in all mixed governments. Commercial intercourse, he said, is regulated by the law of nations, by the municipal law of respective countries and by treaties of commerce, the application of which is the province of consuls. What advantages, he asked, had our commercial treaties given us, either that with France or that with England? He excepted that part of the treaty with Great Britain which arranged our difference with that power, as foreign to the discussion. He claimed that the restriction which we had laid upon ourselves by our commercial treaties had been attended with political consequences fatal to our tranquillity. Washington had advised a separation of our political from our commercial relations. The message of President Adams intimated a different policy and alluded to the balance of power in Europe as not to be forgotten or neglected. Interesting as that balance may be to Europe, how does it concern us? We shall never throw our weight into the scale. Passing from this to the danger of the absorption of powers by the executive, he cited the examples of the Cortes of Spain, the Etats Generaux of France, the Diets of Denmark. In all these countries the executive is in possession of legislative, of absolute powers. The fate of the European republics was similar. Venice, Switzerland, and Holland had shown the legislative powers merging into the executive. The object of the Constitution of the United States is to divide and distribute the powers of government. With uncontrolled command over the purse of the people the executive tends to prodigality, to taxes, and to wars. He closed with a hope that a fixed determination to prevent the increase of the national expenditure, and to detach the country from any connection with European politics, would tend to reconcile parties, promote the happiness of America, and conciliate the affection of every part of the Union. No such admirable exposition of the true American doctrine of non-interference with European politics had at that time been heard in Congress.

In reply, Harper insisted on the admission that the purpose of the amendment of Nicholas was to restrain the President; that it was a question of power, not of money. Mr. Gallatin admitted the right of appointment, but denied that the House was bound to appropriate. Harper rejoined that the offices did not originate with the President but with the Constitution, and that they could not be destroyed by the action of the House, and, leaving the general ground of debate, made a brilliant attack upon the Republicans as revolutionists, whom he divided into three classes: the philosophers, the Jacobins, and the sans-culottes. The philosophers are most to be dreaded. "They declaim with warmth on the miseries of mankind, the abuses of government, and the vices of rulers; all which they engage to remove, providing their theories should once be adopted. They talk of the perfectibility of man and of the dignity of his nature; and, entirely forgetting what he is, declaim perpetually about what he should be." Of Jacobins there are plenty. They profit by the labors of others; tyrants in power, demagogues when not. Fortunately for America there are few or no sans-culottes among her inhabitants. Jefferson, he said, returned from France a missionary to convert Americans to the new faith, and he charged that the system of French alliance and war with Great Britain by the United States was a part of the scheme of the French revolutionists, and was imported into this country. Gallatin and his friends he regarded in the light of an enemy who has commenced a siege against the fortress of the Constitution.

The restricting amendment was lost, and the bill passed by a vote of 52 yeas to 43 nays. Nor is it easy to see how the theory of Mr. Gallatin with regard to diplomatic relations could have been applied successfully with the existing channels of intercourse. Now that the ocean cable brings governments into direct relation with each other, there is a tendency to restrict the authority of ambassadors, for whom there is no longer need, and the entire system will no doubt soon disappear. Mr. Gallatin's speech was the delight of his party and his friends. He was called upon to write it out, and two thousand copies of it were circulated as the best exposition of Republican doctrine.

Early in February the President informed Congress of certain captures and outrages committed by a French privateer within the limits of the United States, including the burning of an English merchantman in the harbor of Charleston. On March 19, in a further special message, he communicated dispatches from the American envoys in France, and also informed Congress that he should withdraw his order forbidding merchant vessels to sail in an armed condition. A collision might, therefore, occur at any moment.

On March 27, 1798, a resolution was introduced that it is not now expedient for the United States to resort to war against the French Republic; a second, to restrict the arming of merchant vessels; and a third, to provide for the protection of the seacoast and the internal defense of the country. Speaking to the first resolution, Mr. Gallatin said that the United States had arrived at a crisis at which a stand must be made, when the House must say whether it will resort to war or preserve peace. If to war, the expense and its evils must be met; if peace continue, then the country must submit: in either case American vessels would be taken. It was a mere matter of calculation which course would best serve the interest and happiness of the country. If he could separate defensive from offensive war, he should be in favor of it; but he could not make the distinction, and therefore he should be in favor of measures of peace. The act of the President was a war measure. Members of the House so designated it in letters to their constituents.

On April 2 the President was requested to communicate the instructions and dispatches from the envoys extraordinary, mention of which he had made in his message of March 19. Gallatin supported the call. He said that the President was not afraid of communicating information, as he had shown in the preceding session, and that to withhold it would endanger the safety of our commerce, or prevent the happy issue of negotiation. On April 3 Mr. Gallatin presented a petition against hazarding the neutrality and peace of the nation by authorizing private citizens to arm and equip vessels. This was signed by forty members of the Pennsylvania legislature. Protests of a similar character were presented from other parts of the country. On the same day the President sent in the famous X Y Z dispatches, in confidence. These letters represented the names of Hottinguer, Bellamy, and Hauteval, the agents of Talleyrand, the foreign minister of the First Consul, which were withheld by the President. The mysterious negotiations contained a distinct demand by Talleyrand of a douceur of 1,200,000 livres to the French officials as a condition of peace. The effect was immediately to strengthen the administration, Dayton, the speaker, passing to the ranks of the Federalists.

On the 18th the Senate sent down a bill authorizing the President to procure sixteen armed vessels to act as convoys. Gallatin still held firm. He admitted that from the beginning of the European contest the belligerent powers had disregarded the law of nations and the stipulations of treaties, but he still opposed the granting of armed convoys, which would lead to a collision. Let us not, he said, act on speculative grounds; if our present situation is better than war, let us keep it. Better even, he said, suffer the French to go on with their depredations than to take any step which may lead to war.

Allen of Connecticut read a passage from the dispatches which envenomed the debate. By it one of the French agents appears to have warned the American envoys that they were mistaken in supposing that an exposition of the unreasonable demands of France would unite the people of the United States. He said, "You should know that the diplomatic skill of France and the means she possesses in your country are sufficient to enable her, with the French party in America, to throw the blame which will attend the rupture of the negotiations on the Federalists, as you term yourselves, but on the British party, as France terms you, and you may assure yourselves this will be done." Allen then charged upon Gallatin that his language was that of a foreign agent. Gallatin replied that the representatives of the French Republic in this country had shown themselves to be the worst diplomatists that had ever been sent to it, and he asked why the gentlemen who did not come forward with a declaration of war (though they were willing to go to war without the declaration) charge their adversaries with meaning to submit to France. France might declare war or give an order to seize American vessels, but as long as she did not, some hope remained that the state of peace might not be broken; and he said in conclusion "that, notwithstanding all the violent charges and personal abuse which had been made against him, it would produce no difference in his manner of acting, neither prevent him from speaking against every measure which he thought injurious to the public interest, nor, on the other hand, inflame his mind so as to induce him to oppose measures which he might heretofore have thought proper."

The war feeling ran high in the country; "Millions for defense, but not one cent for tribute,"[7] was the popular cry. On May 28 Mr. Harper introduced a bill to suspend commercial intercourse with France. Gallatin thought this a doubtful measure. Its avowed purpose was to distress France in the West Indies, but he said that in six months that entire trade would be by neutral vessels. In the discussion on the bill to regulate the arming of merchant vessels, he showed that it was the practice of neutral European nations to allow such vessels to arm, but not to regulate their conduct. Bonds are required in cases of letter of marque, and the merchant who arms is bound not to break the laws of nations or the agreements of treaties. Restriction was therefore unnecessary. Government should not interfere. Commercial intercourse with France was suspended June 13.

In the pride of their new triumph and the intensity of their personal feeling the Federalists overleaped their mark, and began a series of measures which ultimately cost them the possession of the government and their political existence. The first of these was the Sedition Bill, which Jefferson believed to be aimed at Gallatin in person. Mr. Gallatin met it at its inception with a statement of the constitutional objections, viz., 1st, that there was no power to make such a law, and 2d, the special provision in the Constitution that the writ of habeas corpus shall not be suspended except in cases of rebellion and invasion. There was neither. The second, the Alien Bill, gave the President power to expel from the country all aliens. Over this measure Gallatin and Harper had hot words. Gallatin charged upon Harper not only a misrepresentation of the arguments of his opponents, but an arraignment of the motives of others, while claiming all purity for his own. Harper answered in words which show that Gallatin, for once, had met warmth with warmth, and anger with anger. When, Harper said, a gentleman, who is usually so cool, all at once assumes such a tone of passion as to forget all decorum of language, it would seem as if the observation had been properly applied. On the vote to strike out the obnoxious sections, the Federalists defeated their antagonists, and on June 21 the bill itself was passed with all its odious features by 46 to 40.

On June 21 President Adams sent in a message with letters from Gerry, who had remained at Paris after the return of Marshall and Pinckney, on the subject of a loan. They contained an intimation from Talleyrand that he was ready to resume negotiations. In this message Adams said, "I will never send another minister to France without assurances that he will be received, respected, and honored as the representative of a great, free, powerful, and independent nation." On the 25th an act was passed authorizing the commanders of merchant vessels to defend themselves against search and seizure under regulations by the President. On June 30 a further act authorized the purchase and equipment of twelve vessels as an addition to the naval armament. To all intents and purposes a state of war between the two countries already existed.

The 4th of July (1798) was celebrated with unusual enthusiasm all over the United States, and the black cockade was generally worn. This was the distinctive badge of the Federalists, and a response to the tricolor which Adet had recommended all French citizens to wear in 1794.

On July 5 a resolution was moved to appoint a committee to consider the expediency of declaring, by legislative act, the state of relations between the United States and the French Republic. Mr. Gallatin asked if a declaration of war could not be moved as an amendment, but the speaker, Mr. Dayton, made no reply. Mr. Gallatin objected that Congress could not declare a state of facts by a legislative act. But this view, if tenable then, has long since been abandoned. In witness of which it is only necessary to name the celebrated resolution of the Congress of 1865 with regard to the recognition of a monarchy in Mexico. July 6 the House went into committee of the whole on the state of the Union to consider a bill sent down by the Senate abrogating the treaty with France. The bill was passed on the 16th by a vote of 47 ayes to 37 nays, Gallatin voting in the negative. The House adjourned the same day.

While thus engaged in debates which called into exercise his varied information and displayed not only the extent of his learning but his remarkable powers of reasoning and statement, Mr. Gallatin never lost sight of reform in the administration of the finances of the government. To the success of his efforts to hold the Treasury Department to a strict conformity with his theory of administration, Mr. Wolcott, the secretary, gave ample if unwilling testimony. To Hamilton he wrote on April 5, 1798, "The management of the Treasury becomes more and more difficult. The legislature will not pass laws in gross; their appropriations are minute. Gallatin, to whom they yield, is evidently intending to break down this department by charging it with an impracticable detail."

During these warm discussions Gallatin rarely lost his self-control. Writing to his old friend Lesdernier at this period, he said, "You may remember I am blessed with a very even temper; it has not been altered by time or politics."

* * * * *

The third session of the fifth Congress opened on December 3, 1798. On the 8th, when the President was expected, Lieutenant-General Washington and Generals Pinckney and Hamilton entered the hall and took their places on the right of the speaker's chair. They had been recently appointed to command the army of defense.

The President's speech announced no change in the situation. "Nothing," he said, "is discoverable in the conduct of France which ought to change or relax our measures for defense. On the contrary, to extend and invigorate them is our true policy. An efficient preparation for war can alone insure peace. It must be left to France, if she is indeed desirous of accommodation, to take the requisite steps. The United States will steadily observe the maxims by which they have hitherto been governed." The reply to this patriotic sentiment was unanimously agreed to, and was most grateful to Adams, who thanked the House for it as "consonant to the characters of representatives of a great and free people."

On December 27 a peculiar resolution was introduced to punish the usurpation of the executive authority of the government of the United States in carrying on correspondence with the government of any foreign prince or state. Gallatin thought this resolution covered too much ground. The criminality of such acts did not lie in their being usurpations, but in the nature of the crime committed. There was no authority in the Constitution for a grant of such a power to the President. To afford aid and comfort to the enemy was treason, but there was no war, and therefore no enemy. He claimed the right to himself and others to do all in his power to secure a peace, even by correspondence abroad, and he would not admit that the ground taken by the friends of the measure was a proper foundation for a general law. A committee was, however, appointed, in spite of this remonstrance, to consider the propriety of including in the general act all persons who should commence or carry on a correspondence, by a vote of 65 to 23. A bill was reported on January 9, when Gallatin endeavored to attach a proviso that the law should not operate upon persons seeking justice or redress from foreign governments; but his motion was defeated by a vote of 48 to 37. Later, however, a resolution of Mr. Parker, that nothing in the act should be construed to abridge the rights of any citizen to apply for such redress, was adopted by a vote of 69 yeas to 27 nays. On this vote Harper voted yea. Griswold, Otis, Bayard, and Goodrich were found among the nays. Gallatin succeeded in carrying an amendment defining the bill, after which it was passed by a vote of 58 to 36.

Towards the close of January, 1799, a bill was brought in authorizing the President to discontinue the restraints of the act suspending intercourse with the French West India Islands, whenever any persons in authority or command should so request. This was to invite a secession of the French colonies from the mother country. Gallatin deprecated any action which might induce rebellion against authority, or lead to self-government among the people of the islands who were unfit for it. Moreover, such action would remove still further every expectation of an accommodation with France. The bill was passed by a vote of 55 to 37. He objected to the bill to authorize the President to suspend intercourse with Spanish and Dutch ports which should harbor French privateers, as placing an unlimited power to interdict commerce in the hands of the executive. The bill was carried by 55 to 37. On the question of the augmentation of the navy he opposed the building of the seventy-fours.

In February Edward Livingston presented a petition from aliens, natives of Ireland, against the Alien and Sedition laws. Numerous similar petitions followed; one was signed by 18,000 persons in Pennsylvania alone. To postpone consideration of the subject, the Federalists sent these papers to a select committee, against the protests of Livingston and Gallatin. This course was the more peculiar because of the reference of petitions of a similar character in the month previous to the committee of the whole. The Federalists were abusing their majority, and precipitating their unexpected but certain ruin. One more effort was made to repeal the offensive penal act; the constitutional objection was again pleaded, but the repeal was defeated by a vote of 52 in the affirmative. Mr. Gallatin opposed these laws in all their stages, but, failing in this, persistently endeavored to make them as good as possible before they passed. Jefferson later said that nothing could obliterate from the recollection of those who were witnesses of it the courage of Gallatin in the "Days of Terror."[8] The vote of thanks to Mr. Dayton, the speaker, was carried by a vote of 40 to 22. On March 3, 1800, this Congress adjourned.

* * * * *

The sixth Congress met at Philadelphia on December 2, 1799. The Federalists were returned in full majority. Among the new members of the House, John Marshall and John Randolph appeared for Virginia. Theodore Sedgwick was chosen speaker. President Adams came down to the House on the 3d and made the usual speech. The address in reply, reported by a committee of which Marshall was chairman, was agreed to without amendment. Adams was again delighted with the very respectful terms adopted at the "first assembly after a fresh election, under the strong impression of the public opinion and national sense at this interesting and singular crisis." At this session it was the sad privilege of Marshall to announce the death of Washington, "the Hero, the Sage, and the Patriot of America." In the shadow of this great grief, party passion was hushed for a while.

Gallatin again led the Republican opposition; Nicholas and Macon were his able lieutenants. The line of attack of the Republicans was clear. If war could be avoided, the growing unpopularity of the Alien and Sedition laws would surely bring them to power. The foreign-born voter was already a factor in American politics. In January the law providing for an addition to the army was suspended. Macon then moved the repeal of the Sedition Law. He took the ground that it was a measure of defense. Bayard adroitly proposed as an amendment that "the offenses therein specified shall remain punishable as at common law, provided that upon any prosecution it shall be lawful for the defendant to give as his defense the truth of the matter charged as a libel." Gallatin called upon the chair to declare the amendment out of order, as intended to destroy the resolution, but the speaker declined, and the amendment was carried by a vote of 51 to 47. The resolution thus amended was then defeated by a vote of 87 to 1. The Republicans preferred the odious act in its original form rather than accept the Federal interpretation of it.

On February 11, 1800, a bill was introduced into Congress further to suspend commercial intercourse with France. It passed the House after a short debate by a vote of 68 yeas to 28 nays. On this bill the Republican leaders were divided. Nicholas, Macon, and Randolph opposed it; but Gallatin, separating from his friends, carried enough of his party with him to secure its passage. Returned by the Senate with amendments, it was again objected to by Macon as fatal to the interests of the Southern States, but the House resolved to concur by a vote of 50 to 36.

In March the country was greatly excited by the news of an engagement on the 1st of February, off Guadaloupe, between the United States frigate Constellation, thirty-eight guns, and a French national frigate, La Vengeance, fifty-four guns. The House of Representatives called on the secretary of the navy for information, and, by 84 yeas to 4 nays, voted a gold medal to Captain Truxton, who commanded the American ship. John Randolph's name is recorded in the negative.

Notwithstanding this collision, the relations of the United States and France were gradually assuming a kindlier phase. The Directory had sought to drive the American government into active measures against England. Bonaparte, chosen First Consul, at once adopted a conciliatory tone. Preparing for a great continental struggle, he was concentrating the energies and the powers of France. In May Mr. Parker called the attention of the House to this change of conduct in the French government and offered a resolution instructing the Committee on Commerce to inquire if any amendments to the Foreign Intercourse Act were necessary. Macon moved to amend so that the inquiry should be whether it were not expedient to repeal the act. Gallatin opposed the resolution on the ground that it was highly improper to take any measures at the present time which would change the defensive system of the country. The resolution was negatived,—43 nays to 40 yeas.

One singular opposition of Gallatin is recorded towards the close of the session; the Committee on the Treasury Department reported an amendment to the act of establishment, providing that the secretary of the treasury shall lay before Congress, at the commencement of every session, a report on finance with plans for the support of credit, etc. Gallatin and Nicholas opposed this bill, because it came down from the Senate, which had no constitutional right to originate a money bill; but Griswold and Harper at once took the correct ground that it was not a bill, but a report on the state of the finances, in which the Senate had an equal share with the House. The bill was passed by a vote of 43 to 39. It is worthy of note that the first report on the state of the finances communicated under this act was by Mr. Gallatin himself the next year, and that it was sent in to the Senate. The House adjourned on May 14, 1800.

* * * * *

The second session of the sixth Congress was held at the city of Washington, to which the seat of government had been removed in the summer interval. After two southerly migrations they were now definitively established at a national capital. The session opened on November 17, 1800. On the 22d President Adams congratulated Congress on "the prospect of a residence not to be changed." The address of the House in reply was adopted by a close vote.

The situation of foreign relations was changed. The First Consul received the American envoys cordially, and a commercial convention was made but secured ratification by the Senate only after the elimination of an article and a limitation of its duration to eight years. While the bill was pending in the Senate, Mr. Samuel Smith moved to continue the act to suspend commercial intercourse with France. Mr. Gallatin opposed this motion; at the last session he had voted for this bill because there was only the appearance of a treaty. Now that the precise state of negotiation was known, why should the House longer leave this matter to the discretion of the President? The House decided to reject the indiscreet bill by a vote of 59 to 37. An effort was also made to repeal a part of the Sedition Law, and continue the rest in force, but the House refused to order the engrossing of the bill, taking wise counsel of Dawson, who said that, supported by the justice and policy of their measures, the approaching administration would not need the aid of either the alien, sedition, or common law. The opponents of the bill would not consent to any modification. The last scenes of the session were of exciting interest.

Freed from the menace of immediate war, the people of plain common sense recognized that the friendship of Great Britain was more dangerous than the enmity of France. They dreaded the fixed power of an organized aristocracy far more than the ephemeral anarchy of an ill-ordered democracy; they were more averse to class distinctions protected by law than even to military despotism which destroyed all distinctions, and they preferred, as man always has preferred and always will prefer, personal to political equality. The Alien and Sedition laws had borne their legitimate fruit. The foreign-born population held the balance of power; a general vote would have shown a large Republican or, it is more correct to say, anti-Federalist majority. But the popular will could not be thus expressed. Under the old system each elector in the electoral college cast his ballot for president and vice-president without designation of his preference as to who should fill the first place. New England was solid for Adams, who, however, had little strength beyond the limits of this Federal stronghold. New York and the Southern States with inconsiderable exceptions were Republican. Pennsylvania was so divided in the legislature that her entire vote would have been lost but for a compromise which gave to the Republicans one vote more than to the Federalists. Adams being out of the question, the election to the first place lay between Jefferson and Burr, both Republicans. The Federalists, therefore, had their option between the two Republican candidates, and the result was within the reach of that most detestable of combinations, a political bargain. Mr. Gallatin's position in this condition of affairs was controlling. His loyalty to Jefferson was unquestioned, while Burr was the favorite of the large Republican party in New York whose leaders were Mr. Gallatin's immediate friends and warm supporters. Both Jefferson and Burr were accused of bargaining to secure enough of the Federalist vote to turn the scale. That Mr. Jefferson did make some sacrifice of his independence is now believed. Whether Mr. Gallatin was aware of any such compromise is uncertain. If such bargain were made, General Samuel Smith was the channel of arrangement, and in view of the inexplicable and ignominious deference of Jefferson and Madison to his political demands, there is little doubt that he held a secret power which they dared not resist. Gallatin felt it, suffered from it, protested against it, but submitted to it.

The fear was that Congress might adjourn without a conclusion. To meet this emergency Mr. Gallatin devised a plan of balloting in the House, which he communicated to Mr. Jefferson and Mr. Nicholas. It stated the objects of the Federalists to be, 1st, to elect Burr; 2d, to defeat the present election and order a new one; 3d, to assume executive power during the interregnum. These he considers, and suggests alternative action in case of submission or resistance on the part of the Republicans. The Federalists, holding three branches of government, viz., the presidency, a majority in the Senate, and a majority in the House, might pass a law declaring that one of the great officers designated by the Constitution should act as president pro tempore, which would be constitutional. But while Mr. Gallatin in this paragraph admitted such a law to be constitutional, in the next he argued that the act of the person designated by law, or of the president pro tempore, assuming the power is clearly "unconstitutional." By this ingenious process of reasoning, to which the strict constructionists have always been partial, it might be unconstitutional to carry out constitutional law. The assumption of such power was therefore, Mr. Gallatin held, usurpation, to be resisted in one of two ways; by declaring the interval till the next session of Congress an interregnum, allowing all laws not immediately connected with presidential powers to take their course, and opposing a silent resistance to all others; or by the Republicans assuming the executive power by a joint act of the two candidates, or by the relinquishment of all claims by one of them. On the other hand, the proposed outlines of Republican conduct were, 1st, to persevere in voting for Mr. Jefferson; 2d, to use every endeavor to defeat any law on the subject; 3d, to try to persuade Mr. Adams to refuse his consent to any such law and not to call the Senate on any account if there should be no choice by the House.

In a letter written in 1848 Mr. Gallatin said that a provision by law, that if there should be no election the executive power be placed in the hands of some public officer, was a revolutionary act of usurpation which would have been put down by force if necessary. It was threatened that, if any man should be thus appointed President he should instantly be put to death, and bodies of men were said to be organized, in Maryland and Virginia, ready to march to Washington on March 4 for that purpose. The fears of violence were so great that to Governor McKean of Pennsylvania was submitted the propriety of having a body of militia in readiness to reach the capital in time to prevent civil war. From this letter of Mr. Gallatin, then the last surviving witness of the election, only one conclusion can be drawn: that the Republicans would have preferred violent resistance to temporary submission, even though the officer exercising executive powers was appointed in accordance with law. Fortunately for the young country there was enough good sense and patriotism in the ranks of the Federalists to avert the danger.

On the suggestion of Mr. Bayard it was agreed by a committee of sixteen members, one from each State, that if it should appear that the two persons highest on the list, Jefferson and Burr, had an equal number of votes, the House should immediately proceed in their own chamber to choose the president by ballot, and should not adjourn until an election should have been made. On the first ballot there was a tie between Jefferson and Burr; the deadlock continued until February 17, when the Federalists abandoned the contest, and Mr. Jefferson received the requisite number of votes. Burr, having the second number, became vice-president.

Mr. Gallatin's third congressional term closed with this Congress. In his first term he asserted his power and took his place in the councils of the party. In his second, he became its acknowledged chief. In the third, he led its forces to final victory. But for his opposition, war would have been declared against France, and the Republican party would have disappeared in the political chasm. But for his admirable management, Mr. Jefferson would have been relegated to the study of theoretical government on his Monticello farm, or to play second fiddle at the Capitol to the music of Aaron Burr.

In the foregoing analysis of the debates and resolutions of Congress, and the recital of the part taken in them by Mr. Gallatin, attention has only been paid to such of the proceedings as concerned the interpretation of the Constitution or the forms of administration with which Mr. Gallatin interested himself. From the day of his first appearance he commanded the attention and the respect of his fellows. The leadership of his party fell to him as of course. It was not grasped by him. He was never a partisan. He never waived his entire independence of judgment. His ingenuity and adroitness never tempted him to untenable positions. Hence his party followed him with implicit confidence. Yet while the debates of Congress, imperfectly reported as they seem to be in its annals, show the deference paid to him by the Republican leaders, and display the great share he took in the definition of powers and of administration as now understood, his name is hardly mentioned in history. Jefferson and Madison became presidents of the United States. They, with Gallatin, formed the triumvirate which ruled the country for sixteen years. Gallatin was the youngest of the three.[9] To this political combination Gallatin brought a knowledge of constitutional law equal to their own, a knowledge of international law superior to that of either, and a habit of practical administration of which they had no conception. The Republican party lost its chief when Gallatin left the House; from that day it floundered to its close.

In the balance of opinion there are no certain weights and measures. The preponderance of causes cannot be precisely ascertained. The freedom which the people of the United States enjoy to-day is not the work of any one party. Those who are descended from its original stock, and those whom its free institutions have since invited to full membership, owe that freedom to two causes: the one, formulated by Hamilton, a strong, central power, which, deriving its force from the people, maintains its authority at home and secures respect abroad; the other, the spirit of liberty which found expression in the famous declaration of the rights of man. This influence Jefferson represented. It taught the equality of man; not equality before the law alone, nor yet political equality, but that absolute freedom from class distinction which is true social equality; in a word, mutual respect. But for Hamilton we might be a handful of petty States, in discordant confederation or perpetual war; but for Jefferson, a prey to the class jealousy which unsettles the social relations and threatens the political existence of European States.

FOOTNOTES:

[Footnote 4: Lord Sheffield to Mr. Abbott, November 6, 1812. Correspondence of Lord Colchester, ii. 409.]

[Footnote 5: Gallatin later described Jackson as he first saw him in his seat in the House: "A tall, lank, uncouth looking individual, with long locks of hair hanging over his brows and face, while a queue hung down his back tied in an eelskin. The dress of this individual was singular, his manners and deportment that of a backwoodsman." Bartlett's Reminiscences of Gallatin.]

[Footnote 6: The phrase "stop the wheels of government" originated with "Peter Porcupine" (William Cobbett) and was on every tongue.]

[Footnote 7: Charles C. Pinckney, when ambassador to France, 1796.]

[Footnote 8: Jefferson to William Duane, March 28, 1811. Jefferson's Works, vol. v. p. 574.]

[Footnote 9: Jefferson was born in 1743, Madison in 1751, Gallatin in 1761.]



CHAPTER VI

SECRETARY OF THE TREASURY

Funding

The material comfort of every people depends more immediately upon the correct management of its finances than upon any other branch of government. Haute finance, to use a French expression for which there is no English equivalent, demands in its application the faculties of organization and administration in their highest degree. The relations of money to currency and credit, and their relations to industry and agriculture, or in modern phrase of capital to labor, fall within its scope. The history of France, the nation which has best understood and applied true principles of finance, supplies striking examples of the benefits a finance minister of the first order renders to his country, and the dangers of false theories. The marvelous restoration of its prosperity by the genius of Colbert, the ruin caused by the malign sciolism of Law, are familiar to all students of political economy. Nor has the United States been less favored. The names of Morris, Hamilton, Gallatin, and Chase shine with equal lustre.

Morris, the Financier of the Revolution, was called to the administration of the money department of the United States government when there was no money to administer. Before his appointment as "Financier" the expenses of the government, military and civil, had been met by expedients; by foreign loans, lotteries, and loan office certificates; finally by continental money, or, more properly speaking, bills of credit emitted by authority of Congress and made legal tender by joint action of Congress and the several States. The relation of coin to paper in this motley currency appears in the appendix to the "Journal of Congress" for the year 1778, when the government paid out in fourteen issues of paper currency, $62,154,842; in specie, $78,666; in French livres, $28,525.[10] The power of taxation was jealously withheld by the States, and Congress could not go beyond recommending to them to levy taxes for the withdrawal of the bills emitted by it for their quotas, pari passu with their issue. When the entire scheme of paper money failed, the necessary supplies for the army were levied in kind. In the spring of 1781 the affairs of the Treasury Department were investigated by a committee of Congress, and an attempt was made to ascertain the precise condition of the public debt. The amount of foreign debt was approximately reached, but the record of the domestic debt was inextricably involved, and never definitely discovered. Morris soon brought order out of this chaos. His plan was to liquidate the public indebtedness in specie, and fund it in interest-bearing bonds. The Bank of North America was established, the notes of which were soon preferred to specie as a medium of exchange. Silver, then in general use as the measure of value, was adopted as the single standard. The weight and pureness of the dollar were fixed by law. The dollar was made the unit of account and payment, and subdivisions were made in a decimal ratio. This was the dollar of our fathers. Gouverneur Morris, the assistant of the Financier, suggested the decimal computation, and Jefferson the dollar as the unit of account and payment. The board of treasury, which for five years had administered the finances in a bungling way, was dissolved by Congress in the fall of 1781, and Morris was left in sole control. Semi-annual statements of the public indebtedness were now begun. The expenses of the government were steadily and inflexibly cut down to meet the diminishing income. A loan was negotiated in Holland, and, with the aid of Franklin, the amount of indebtedness to France was established.

The public debt on January 1, 1783, was $42,000,375, of which $7,885,088 was foreign, bearing four and five per cent. interest; and $34,115,290 was held at home at six per cent. The total amount of interest was $2,415,956. No means were provided for the payment of either principal or interest. In July of the previous year Morris urged the wisdom of funding the public debt, in a masterly letter to the president of Congress. On December 16 a sinking fund was provided for by a resolution, which, though inadequate to the purpose, was at least a declaration of principle. In February, 1784, Morris notified Congress of his intended retirement from office. He may justly be termed the father of the American system of finance. In his administration he inflexibly maintained the determination, with which he assumed the office, to apply the public funds to the purpose to which they were appropriated. He declared that he would "neither pay the interest of our debts out of the moneys which are called for to carry on the war, nor pay the expenses of the war from the funds which are called for to pay the interest of our debts." One new feature of Morris's administration was the beginning of the sale of public lands.

On the retirement of Mr. Morris, November, 1784, a new board of treasury was charged with the administration of the finances, and continued in control until September 30, 1788, when a committee, raised to examine into the affairs of the department, rendered a pitiful report of mismanagement for which the board had not the excuse of their predecessors during the war. They had only to observe the precepts which Morris had enunciated, and to follow the methods he had prescribed, with the aid of the assistants he had trained. But the taxes collected had not been covered into the Treasury by the receivers. Large sums advanced for secret service were not accounted for; and the entire system of responsibility had been disregarded. John Adams attributed all the distresses at this period to "a downright ignorance of the nature of coin, credit and circulation;" an ignorance not yet dispelled. More truly could he have said that our distresses arose from willful neglect of the principle of accountability in the public service.

The first Congress under the new Constitution met at New York on March 4, 1789, but it was not until the autumn that the executive administration of the government was organized by the creation of the three departments: State, Treasury, and War.

The bill establishing the Treasury Department passed Congress on September 2, 1789. Hamilton was appointed secretary by Washington on September 11. On September 21 the House directed the secretary to examine into and report a financial plan. On the assembling of Congress, June 14, 1790, Hamilton communicated to the House his first report, known as that on public credit. The boldness of Hamilton's plan startled and divided the country. Funding resolutions were introduced into the House. The first, relating to the foreign debt, passed unanimously; the second, providing for the liquidation of the domestic obligations, was sharply debated, but in the end Hamilton's scheme was adopted. The resolutions providing for the assumption of the state debts, which he embodied in his report, aroused an opposition still more formidable, and it was not until August 4 that by political machinery this part of his plan received the assent of Congress. To provide for the interest on the debt and the expenses of the government, the import and navigation duties were raised to yield the utmost revenue available; but, in the temper of Congress, the excise law was not pressed at this session. The secretary had securely laid the foundations of his policy. Time and sheer necessity would compel the completion of his work in essential accord with his original design. The President's message at the opening of the winter session added greatly to the prestige of Hamilton's policy by calling attention to the great prosperity of the country and the remarkable rise in public credit. The excise law, modified to apply to distilled spirits, passed the House in January. The principle of a direct tax was admitted. On December 14, 1790, in obedience to an order of the House requiring the secretary to report further provision for the public credit, Hamilton communicated his plans for a national bank. Next in order came the establishment of a national mint. Thus in two sessions of Congress, and in the space of little more than a year from the time when he took charge of the Treasury, Hamilton conceived and carried to successful conclusion an entire scheme of finance.

One more measure in the comprehensive system of public credit crowned the solid structure of which the funding of the debt was the cornerstone. This was the establishment of the sinking fund for the redemption of the debt. Hamilton conformed his plan to the maxim, which, to use his words, "has been supposed capable of giving immortality to credit, namely, that with the creation of debts should be incorporated the means of extinguishment, which are twofold. 1st. The establishing, at the time of contracting a debt, funds for the reimbursement of the principal, as well as for the payment of interest within a determinate period. 2d. The making it a part of the contract, that the fund so established shall be inviolably applied to the object." The ingenuity and skill with which this master of financial science managed the Treasury Department for more than five years need no word of comment. Nor do they fall within the scope of this outline of the features of his policy. His reports are the textbook of American political economy. Whoever would grasp its principles must seek them in this limpid source, and study the methods he applied to revenue and loans. Well might Webster say of him in lofty praise, "He smote the rock of national resources, and abundant streams of revenue gushed forth; he touched the dead corpse of Public Credit, and it sprung upon its feet."

On the resignation of Hamilton, January 31, 1795, Washington invited Wolcott, who was familiar with the views of Hamilton and on such intimate terms with him that he could always have his advice in any difficult emergency, to take the post. Wolcott had been connected with the department from its organization, first as auditor, afterwards as comptroller of the Treasury. He held the Treasury until nearly the end of Adams's administration. On November 8, 1800, upon the open breach between Mr. Adams and the Hamilton wing of the Federal party, Wolcott, whose sympathies were wholly with his old chief, tendered his resignation, to take effect at the close of the year. On December 31 Mr. Samuel Dexter was appointed to administer the department. But the days of the Federal party were now numbered: it fell of its own dissensions, "wounded in the house of its friends."

There is little in the administration of the finances by Wolcott to attract comment. He managed the details of the department with integrity and skill. On his retirement a committee of the House on the condition of the Treasury was appointed. No similar examination had been made since May 22, 1794. On January 28, 1801, Mr. Otis, chairman of the committee, submitted the results of the investigation in an unanimous report that the business of the Treasury Department had been conducted with regularity, fidelity, and a regard to economy; that the disbursements of money had always been made pursuant to law, and generally that the financial concerns of the country had been left by the late secretary in a state of good order and prosperity. During his six years of administration of the finances Wolcott negotiated six loans, amounting in all to $2,820,000. The emergencies were extraordinary,—the expenses of the suppression of the Whiskey Insurrection in 1794, and the sum required to effect a treaty of peace with Algiers in 1795. To fund these sums Mr. Wolcott had recourse to an expedient which marked an era in American finance. This was the creation of new stock, subscribed for at home. No loan had been previously placed by the government among its own citizens. Between 1795 and 1798, four and a half, five, and six per cent. stocks were created. In 1798 the condition of the country was embarrassing. There was a threatening prospect of war. Foreign loans were precarious and improvident; the market rate of interest was eight per cent. Under these circumstances an eight per cent. stock was created, not redeemable until 1809. An Act of March 3, 1795, provided for vesting in the sinking fund the surplus revenues of each year.

In the formation of the first Republican cabinet Mr. Gallatin was obviously Mr. Jefferson's first choice for the Treasury. The appointment was nevertheless attended with some difficulties of a political and party nature. The paramount importance of the department was a legacy of Hamilton's genius. Its possession was the Federalist stronghold, and the Senate, which held the confirming power, was still controlled by a Federalist majority. To them Mr. Gallatin was more obnoxious than any other of the Republican leaders. In the few days that he held a seat in the Senate (1793) he offended Hamilton, and aroused the hostility of the friends of the secretary by a call for information as to the condition of the Treasury. As 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. The day after his election, February 18, 1801, Mr. Jefferson communicated to Mr. Gallatin the names of the gentlemen he had already determined upon for his cabinet, and tendered him the Treasury. The only alternative was Madison; but he, with all his reputation as a statesman and party leader, was without skill as a financier, and in the debate on the Funding Bill in 1790 had shown his ignorance in the impracticability of his plans. If Jefferson ever entertained the thought of nominating Madison to the Treasury, political necessity absolutely forbade it. That necessity Mr. Gallatin, by his persistent assaults on the financial policy of the Federalists, had himself created, and he alone of the Republican leaders was competent to carry out the reforms in the administration of the government, and to contrive the consequent reduction in revenue and taxation, which were cardinal points of Republican policy. Public opinion had assigned Gallatin to the post, and the newspapers announced his nomination before Mr. Jefferson was elected, and before he had given any indication of his purpose. To his wife Mr. Gallatin expressed some doubt whether his abilities were equal to the office, and whether the Senate would confirm him, and said, certainly with sincerity, 'that he would not be sorry nor hurt in his feelings if his nomination should be rejected, for exclusively of the immense responsibility, labor, etc., attached to the intended office, another plan which would be much more agreeable to him and to her had been suggested, not by his political friends, but by his New York friends.' He was by no means comfortable in his finances, and he had already formed a plan of studying law and removing to New York. He had made up his mind to leave the western country, which would necessarily end his congressional career. His wife was forlorn in his absence, and suffered so many hardships in her isolated residence that he felt no reluctance to the change. To one of his wife's family he wrote at this time:—

"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 all liable to uncertainty, and I must now cheerfully undertake that which had never been the object of my ambition or wishes."

Well might he hesitate as he witnessed the distress which had overtaken the great party which for twelve years had held the posts of political honor. Fortunately, perhaps for himself and certainly for his party and the country, the proposition came at a time when he had definitively determined upon a change of career. His situation was difficult. The hostility of the Federal senators, and the great exertions which were being made to defeat the appointment, led him to the opinion that, if presented on March 4, it would be rejected. There was the alternative of delay until after that date, which would involve a postponement of the confirmation until the meeting of Congress in December, but there was no certainty that it would then be ratified. Meanwhile he would be compelled to remove to Washington at some sacrifice and expense. He therefore at first positively refused "to come in on any terms but a confirmation by the Senate first given." He was finally induced to comply with the general wish of his political friends. The appointment was withheld by the President that the feeling in the Senate might be judged from its action on the rest of the nominations submitted. They were all approved, and Mr. Dexter consented to hold over until his successor should be appointed. Thus Mr. Gallatin's convenience was entirely consulted. He remained in Washington a few days to confer with the President as to the general conduct of the administration, and on March 14 set out for Fayette to put his affairs in order and to bring his wife and family to Washington. On May 14 Jefferson wrote to Macon, "The arrival of Mr. Gallatin yesterday completed the organization of our administration."

Mr. Gallatin soon realized the magnitude of his task. He did nothing by halves. To whatever work he had to do, he brought the best of his faculty. No man ever better deserved the epithet of "thorough." He searched till he found the principle of every measure with which he had concern and understood every detail of its application. This perfect knowledge of every subject which he investigated was the secret of his political success. As a committee man, he was incomparable. No one could be better equipped for the direction of the Treasury Department than he, but he was not satisfied with direction; he would manage also; and he went to the work with untiring energy. A quarter of a century later he said of it, in a letter to his son, "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."

Mr. Gallatin first drew public attention to his knowledge of finance in the Pennsylvania legislature. An extract from his memorandum of his three years' service gives the best account of this incident. In it appear the carefully matured convictions which he inflexibly maintained.

"The report of the Committee of Ways and Means of the session 1790-1791 (presented by Gurney, chairman) was entirely prepared by me, known to be so, and laid the foundation of my reputation. I was quite astonished at the general encomiums bestowed upon it, and was not at all aware that I had done so well. It was perspicuous and comprehensive; but I am confident that its true merit, and that which gained me the general confidence, was its being founded in strict justice without the slightest regard to party feelings or popular prejudices. The principles assumed, and which were carried into effect, were the immediate reimbursement and extinction of the state paper money, the immediate payment in specie of all the current expenses or warrants on the Treasury (the postponement and uncertainty of which had given rise to shameful and corrupt speculations), and provision for discharging, without defalcation, every debt and engagement previously recognized by the State. In conformity with this, the State paid to its creditors the difference between the nominal amount of the state debt assumed by the United States and the rate at which it was funded by the act of Congress.

"The proceeds of the public lands, together with the arrears, were the fund which not only discharged all the public debts, but left a large surplus. The apprehension that this would be squandered by the Legislature was the principal inducement for chartering the Bank of Pennsylvania with a capital of two millions of dollars, of which the State subscribed one half. This and similar subsequent investments enabled Pennsylvania to defray out of the dividends all the expenses of government without any direct tax during the forty ensuing years, and till the adoption of the system of internal improvement, which required new resources."

This report was printed in the Journal of the House, February 8, 1791. The next year he made a report on the same subject which was printed February 22, 1792.

But his equal grasp of larger subjects was shown in his sketch of the finances of the United States, which he published in November, 1796. It presents under three sections the revenues, the expenses, and the debts of the United States, each subdivided into special heads. The arguments are supported by elaborate tabular statements. 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. The public funds he regarded as three in number: 1st, the sinking fund; 2d, the surplus fund; 3d, the general fund.

In July, 1800, Mr. Gallatin published a second pamphlet, "Views of the Public Debt, Receipts, and Expenditures of the United States," the object of the inquiry being to ascertain the result of the fiscal operations of the government under the Constitution. The entire field of American finance is examined from its beginning. He severely condemns the mode of assumption of the state debts in Hamilton's original plan, and no doubt his strictures are technically correct. The debts assumed for debtor States were not due by the United States, nor was there any moral reason for their assumption. But the assumption was sound financial policy, and all the cost to the nation was amply repaid by the order which their assumption drew out of chaos, and the vigor given to the general credit by the strengthening of that of its parts. The course of the Federalists and Republicans on this question shows that the former had at heart the welfare of all the States, while the latter confined their interest to their own body politic.

Had Mr. Gallatin never penned another line on finance, these two remarkable papers would place him in the first rank of economists and statisticians. There are no errors in his figures, no flaws in his reasoning, no faults in his deductions. In construction and detail, as parts of a complete financial system of administration, they are beyond criticism. Opinions may differ as to the ends sought, but not as to the means to those ends.

For a long period Mr. Gallatin found no more time for essays; he was now to apply his methods. These may be traced in his printed treasury reports, which are lucid and instructive. He was appointed to the Treasury on May 14, 1801, as appears by the official record in the State Department. Before he entered on the duties of the office he submitted to Mr. Jefferson, March 14, 1801, some rough sketches of the financial situation, and suggested the general outlines of his policy. He insisted upon a curtailment in the appropriations for the naval and military establishments, the only saving adequate to the repeal of all internal duties; and upon the discharge of the foreign debt within the period of its obligation. He estimated that the probable receipts and expenditures for the year 1801 would leave a surplus of more than two millions of dollars applicable to the redemption of the debt.

On taking personal charge of the Treasury Department, his first business was to get rid of the arrears of current business which had accumulated since the retirement of Wolcott; his next, to perfect the internal revenue system, so far as it could be remedied without new legislation. The entire summer of 1801 was passed in "arranging, or rather procuring correct statements amongst the Treasury documents," a task of such difficulty that he was unwilling, on November 15, to arrive at an estimate of the revenue within half a million, or to commit himself to any opinion as to the feasibility of abolishing the internal revenues. In his "notes" submitted to Jefferson upon the draft of his first message, there are several passages of interest which show Mr. Gallatin's logical habit of searching out economic causes. Under the head of finances, he remarks, "The revenue has increased more than in the same ratio with population: 1st, because our wealth has increased in a greater ratio than population; 2d, because the seaports and towns, which consume imported articles much more than the country, have increased in a greater proportion." The final paragraph in these "notes" is a synopsis of his entire scheme of administration.

"There is but one subject not mentioned in the message which I feel extremely anxious to see recommended. It is generally that Congress should adopt such measures as will effectually guard against misapplications of public moneys, by making specific appropriations whenever practicable; by providing against the application of moneys drawn from the Treasury under an appropriation to any other object or to any greater amount than that for which they have been drawn; by limiting discretionary power in the application of that money; whether by heads of department or by any other agents; and by rendering every person who receives public moneys from the Treasury as immediately, promptly, and effectually accountable to the accounting officer (the comptroller) as practicable. The great characteristic, the flagrant vice, of the late administration has been total disregard of laws, and application of public moneys by the Department to objects for which they were not appropriate."

Outlines for a system of specific appropriations were inclosed.

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. To solve it required the reduction to a minimum of the departments of War and Marine. But Mr. Jefferson was not a practical statesman. His individuality was too strong for much surrender of opinion. He stated the case very mildly when he wrote in his retirement that he sometimes differed in opinion from some of his friends, from those whose views were as "pure and as sound as his own." It was not his habit to consult his entire cabinet except on general measures. The heads of each department set their views before him separately. Under this system Mr. Gallatin was never able to realize that harmonious interdependence of departments and subordination of ways to means which were his ideal of cabinet administration.

The successful application of Mr. Gallatin's plan would have subordinated all the executive departments to the Treasury. The theory was perfect, but it took no account of the greed of office, the jealousies of friends, the opposition of enemies, and the unknown factor of foreign relations. A speck on the horizon would cloud the peaceful prospect, a hostile threat derange the intricate machinery by which the delicate financial balance was maintained. Mr. Gallatin was fast realizing the magnitude of his undertaking, in which he was greatly embarrassed by the difficulty of finding faithful examining clerks, on whose correctness and fidelity a just settlement of all accounts depends. The number of independent offices attached to the Treasury made the task still more arduous. He wrote to Jefferson at this time, "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 details, but incidentally and by degrees. Until I know them all I dare not touch the machine." One of the acquirements which he considered indispensable for a secretary of the treasury was a "thorough knowledge of book-keeping." The recollection of his persistent demands for information from Hamilton and Wolcott during his congressional career would have stung the conscience of an ordinary man. But Gallatin was not an ordinary man. He asked nothing of others which he himself was not willing to perform. His ideal was high, but he reached its summit. It seems almost as if, in his persistent demand that money accountability should be imposed by law upon the Treasury Department, he sought to set the measure of his own duty, while in the requirement that it should be extended to the other departments, he pledged himself to the perfect accomplishment of that duty in his own.

In his first report to Congress,[11] made December 18, 1801, Mr. Gallatin submitted his financial estimate for the year 1802.

REVENUE. EXPENDITURES.

Imposts $9,500,000 Int. on debts. $7,100,000 Lands } 450,000 Civil List 980,000 Postages } Army 1,420,000 Internal Rev. 650,000 Navy 1,100,000 ————— ————— $10,600,000 $10,600,000

Mr. Wolcott, in his last report to the Commissioners of the Sinking Fund, stated the amount in the Treasury to its credit at $500,718. Mr. Gallatin denied that there was any such surplus, but said that instead of a credit balance the treasury books showed a deficiency of $930,128 on the aggregate revenue from the establishment of the government to the close of the year 1799. Elliott, in his "Funding System," said concerning this once vexed controversy, that it was difficult to reconcile such a diversity of opinion on so intricate a subject; and concerning the official statements of Hamilton and Wolcott, that it was hardly to be credited that they were so superficial or imperfect. Mr. Gallatin himself furnishes the apology that the difference might arise from "entries made or omitted on erroneous principles." To the Federal financiers the palliation was as offensive as the charge, and rankled long and sore. If it were not possible, when Elliott made an examination, to arrive at the precise facts, it is certainly now a secret as secure from discovery as the lost sibylline leaves.