A question less easy to decide was whether the new mission should be despatched at once, or should wait until England should formally accept the mediation. There again political motives dictated immediate action. If England should accept, much time might be saved if the mission were on the spot; if she did not accept, the peace-party in America would be more effectually silenced. In either case, Russia would be deeply pledged to support her own undertaking.
The President did not intend to lose Gallatin in the Treasury. Abundant precedents warranted the double employment of government officers. In 1794 John Jay, then chief-justice, had been sent to negotiate with England, and the Senate had approved the appointment. In 1799 Oliver Ellsworth, also chief-justice, was sent to negotiate with France, and the Senate had again approved. These were Federalist precedents, supposed to be binding, at least on the Federalist party. If the chief-justice, the head of an independent branch of government, could be sent abroad as an Envoy Extraordinary in Executive employment, no objection could exist to sending an Executive officer on a temporary service of the same kind, unless on the score of expediency. To prevent difficulty on that account, the Secretary of the Navy consented to act as head of the Treasury until Gallatin’s return. Gallatin himself inclined to look on his separation from the Treasury as final,[30] but made his arrangements in agreement with the President’s views, which looked to his return in the autumn.
Before he could depart he was obliged to complete the necessary financial arrangements for the coming year, on which he was busily engaged at the moment when Daschkoff’s letter arrived. First in importance was the loan of sixteen million dollars. March 12, subscription books were opened in all the principal towns, and the public was invited to take the whole amount at seven per cent interest, to be reduced to six per cent at the end of thirteen years. About four million dollars were offered on these terms. Proposals in writing were then invited by a Treasury circular, dated March 18, and after an active negotiation between Gallatin and three or four capitalists of New York and Philadelphia,—John Jacob Astor, Stephen Girard, David Parish,—the remainder of the loan was provided. In all about eighteen millions were offered. Fifteen and a half millions were taken, in the form of six per cent stock, issued at eighty-eight dollars for every hundred-dollar certificate, redeemable after the year 1825. About half a million was taken at par, with an annuity of 1½ per cent for thirteen years, in addition to the six per cent interest.
Calculated as a perpetual annuity, as English borrowers would have viewed it, the rate of this loan was less than seven per cent; but if the nominal capital must or should be repaid after twelve years, the rate was about 7.50 per cent. In the end, the government paid 7.487 per cent, for the use of these sixteen millions for thirteen years. The terms were not excessive when it was considered that New England in effect refused to subscribe. Perhaps the loan could not have been taken at all, had not credit and currency been already expanded to the danger-point, as the allotment showed; for while New England, where most of the specie was held, subscribed less than half a million, and Boston took but seventy-five thousand, Pennsylvania, where banking had become a frenzy, took seven million dollars. New York and Baltimore together contributed only half a million more than was given by Philadelphia alone. Ten million dollars were taken by Astor, Girard, and Parish,—three foreign-born Americans, without whose aid the money could not have been obtained on these terms, if at all. Doubtless they were bold operators; but Americans were supposed to be not wanting in the taste for speculation, and the question could not but rise how these men knew the secret of distributing the load which no native American dared carry.
The bargain was completed April 7. At that moment the Treasury was empty, and could not meet the drafts of the other departments; but with sixteen millions in hand, five millions of Treasury notes, and an estimated revenue of something more than nine millions, Gallatin collected about thirty million dollars, and April 17 wrote to the Secretaries of War and Navy,[31] allotting to the one thirteen millions and a quarter, to the other four and a half millions, which could not be exceeded without the consent of Congress. This done, and every question having been settled that could be foreseen,—the tax-bills ready to be laid before Congress, and even the draft for a new bank-charter prepared,—Gallatin bade farewell to the Treasury, and May 9 sailed from the Delaware River, with Bayard, for the Baltic.
Twelve years had passed since Gallatin took charge of the finances, and his retirement was an event hardly less serious than a change of President; for it implied that the political system he had done so much to create and support stood so near the brink of disaster as to call him from the chosen field of his duties into a new career, where, if anywhere, he could save it. As Monroe felt called to the army, so Gallatin turned naturally to diplomacy. He knew that after another year of war the finances must be thrown into disorder like that of the Revolutionary War, beyond the reach of financial skill; and he believed that if any one could smooth the path of negotiation, that person was likely to serve best the needs of the Treasury. Yet he took grave responsibility, of which he was fully aware, in quitting his peculiar post at a moment so serious. Success alone could save him from universal censure; and perhaps nothing in his career better proved the high character he bore, and the extraordinary abilities he possessed, than the ease with which he supported responsibility for this almost desperate venture.
The task he had set for himself was hopeless, not so much because of the concessions he was to require, as on account of the change in European affairs which made England indifferent for the moment to any injury the United States could inflict. Monroe’s instructions to the new commission, though long, consisted largely in arguments against the legality of impressment as a part of the jus gentium; although the legality of European war-measures had long ceased to be worth discussing. As the solution of the dispute, Monroe could offer only the new Foreign Seamen Act, which England had refused from the first to consider, and which was certainly open to objections,—on the American side because it offered too much; on the British side because it offered more than could in practice be performed. To make the utmost possible concession, Monroe proposed that no native-born British subject, thenceforward naturalized in America, should be allowed to serve either in the national or the private vessels of the United States,—a provision which carried one step further the offer to naturalize no British seamen except on condition of leaving the sea, and which went to the verge of conceding the right of impressment. Notwithstanding these concessions, the instructions were still positive on the main point. Without a clear and distinct stipulation against impressments, no treaty was to be signed; negotiations must cease, and the negotiators must return home.[32]
CHAPTER III.
During the winter the Republican legislature of New York chose Rufus King, the chief Federalist in the country, to succeed John Smith as United States senator. Some Republicans charged that this election was the price paid by De Witt Clinton for Federalist votes in the Presidential contest; but Clinton’s friends declared it to be the price paid by the Administration Republicans for Federalist aid in granting a corrupt bank charter. That the choice was due to a bargain of some kind no one denied, and possibly both stories were true. Rufus King himself stood above suspicion, and had been considered an opponent of the Federalist alliance with Clinton; but he was a powerful recruit to the opposition in the Senate, which numbered thenceforward nine votes, or precisely one fourth of the body. The annoyance to the Administration was the greater because King’s Republican colleague, Obadiah German, belonged to the Clintonian opposition, and voted with the Federalists. At the same time Charles Cutts of New Hampshire was succeeded by Jeremiah Mason, a very able and extreme Federalist. Three more senators—Giles, Samuel Smith, and Michael Leib—could be counted as personally hostile to the President. Jesse Franklin of North Carolina was succeeded by David Stone, an independent, opposed to the war. Already the opposition threatened to outweigh the votes on which the President could depend. As though legislation had become a matter of inferior importance, William H. Crawford of Georgia, the only vigorous Republican leader in the Senate, resigned his seat, and followed Gallatin to Europe. He was sent to take the place of Joel Barlow at Paris, and hurried to his post. In this condition of party weakness, the election of Rufus King and Jeremiah Mason to the Senate was a disaster to the Administration; and all the more anxiously the President feared lest the popular election in May should convert New York altogether into a Federalist State, and give Massachusetts the necessary strength to stop the war.
This election, on which the fate of the war was believed to turn, took place as usual, May 1, and began by a Federalist success in the city of New York, followed by another in Kings, Queens, and Westchester counties. These counties before the century ended had a voting population of near half a million, but in 1813 they cast in State elections about eight thousand votes, and gave a majority of eight hundred for the Federalist candidate Stephen Van Rensselaer, the unfortunate general of the Niagara campaign. Throughout the eastern and central counties the election was disputed; three of the four districts into which the State was divided left the result so close—within about three hundred votes—that only the western counties of Cayuga, Seneca, and Genesee turned the scale. Governor Tompkins was re-elected by the moderate majority of three thousand in a total vote of eighty-three thousand; but the Federalists obtained a majority of ten in the Assembly, and gained confidence with their strength. In this election, for the first time, the issue was distinct between those who supported and those who opposed the war. The chief towns, New York, Hudson, and Albany, were strong in opposition; the country districts tended to support.