BOOK V.
AGE. 1830-1849.
1830.
WHATEVER Mr. Gallatin may have thought or said of his physical or intellectual powers, he was from 1830 to 1840 in the prime of life. Never had his mind been more clear, his judgment more keen, or his experience and knowledge so valuable as when the United States government dispensed with his further services at the close of the year 1829. Intellectually, the next fifteen years were the most fruitful of his whole long and laborious career. His case was a singular illustration of the intellectual movement of his time. Had he now been entering instead of quitting the world, he would have found himself drawn, both by temperament, by cast of mind, and by education, into science or business or literature; for the United States of 1830 was no longer the same country as the United States of 1790; it had found a solution of its most serious political problems, and its more active intellectual life was turning to the study of social and economical principles, to purely scientific methods and objects, to practical commerce and the means of obtaining wealth. Old though Mr. Gallatin might think himself, it was to this new society that he and his mental processes belonged, and he found it a pleasure rather than a pain to turn away from that public life which no longer represented a single great political conception, and to grapple with the ideas and methods of the coming generation. In fact, the politics of the United States from 1830 to 1849 offered as melancholy a spectacle as satirists ever held up to derision. Of all the parties that have existed in the United States, the famous Whig party was the most feeble in ideas and the most blundering in management; the Jacksonian Democracy was corrupt in its methods; and both, as well as society itself, were deeply cankered with two desperate sores: the enormous increase of easily acquired wealth, and the terribly rapid growth of slavery and the slave power. In such a spectacle there was to Mr. Gallatin no pleasure and deep pain. He did not, like his old colleague J. Q. Adams, return into public life to offer a violent protest against the degradation of the time, and he did not, like Mr. Adams, pour out his contempt and indignation in the bitterest and most savage comments on men and measures; but he felt quite as strongly, and his thoughts were expressed, whenever they were expressed at all, in language that meant as much. Few Americans can now look back upon that time and remember how the whole country writhed with pain and rage under the lash of Charles Dickens’s satire, without feeling that this satire was in the main deserved. Indeed, there can be no philosophy of history that would not require some vast derangement of the national health to account for the mortal convulsion with which that health was at last in part restored.
Although Mr. Gallatin was no longer in office, he was still deeply interested in public affairs. Members of the Cabinet, Senators, and members of Congress, incessantly applied to him for information and advice. Like Mr. Jefferson and Mr. Madison in their retirement, he was consulted as an oracle. His replies were oracular neither in brevity nor in doubtfulness of meaning. He never refused to assist persons, though quite unknown to him, who asked for such counsel. For a considerable time, so long as financial and economical legislation was especially prominent, in the days of tariffs, nullification, national bank, and sub-treasury, he was still a political power and made his influence deeply felt.
The first occasion for his active interference in politics under the new régime was somewhat accidental. In the early part of General Jackson’s Administration the question of renewing the charter of the Bank of the United States was not yet a prominent party issue; that the President would make a bitter personal contest for the destruction of the bank was not suspected, and the tendency of public opinion seemed to favor a renewal of the charter. In April, 1830, soon after the argument on the North-East boundary was disposed of, Mr. Gallatin received a letter from Robert Walsh, Jr., editor of the American Quarterly Review in Philadelphia, requesting an article on currency, in connection with Mr. McDuffie’s recent Congressional report on the Bank of the United States. Mr. Gallatin replied that he would be disposed to comply if he thought he could add anything to what had been done by others. He described himself as an “ultra-bullionist,” favoring the restriction of paper issues to notes of $100, to be issued only by the Bank of the United States, and a bi-metallic currency of gold and silver. This was essentially the French system, and Mr. Gallatin had, during his residence in France, become prepossessed in its favor. In reply to his request for statistical information, Mr. Walsh put him in communication with Nicholas Biddle, President of the United States Bank, and an animated correspondence was carried on for some months between the two gentlemen. Early in August, Mr. Gallatin was called upon for his paper, and wrote to say that he was not ready. He excused his apparent sluggishness by describing his method of work: “I can lay no claim to either originality of thinking or felicity of expression. If I have met with any success either in public bodies, as an executive officer, or in foreign negotiations, it has been exclusively through a patient and most thorough investigation of all the attainable facts, and a cautious application of these to the questions under discussion.... Long habit has given me great facility in collating, digesting, and extracting complex documents, but I am not hasty in drawing inferences; the arrangement of the facts and arguments is always to me a work of considerable labor; and though aiming at nothing more than perspicuity and brevity, I am a very slow writer.” This assertion must probably be received with some qualifications; at least it is clear that much of Mr. Gallatin’s diplomatic work must have been done with rapidity and ease.
1831.
In his correspondence with Mr. Biddle he gave the reasons which had produced his strong faith in a bi-metallic currency, and since these reasons are interesting as a part of his experience, they are worth quoting here: “The most skilfully administered bank can only be prepared to meet ordinary commercial fluctuations. But when a real and severe crisis occurs, you are perfectly aware that moral causes may increase the pressure to an extent which will baffle every calculation, for the very reason that those causes are beyond the reach of calculation. On the other hand, the example of France under the united pressure of a double invasion, a failure of crops, large indemnities to foreign countries, a vast portion of which was paid by the exportation of specie, an unsettled government, and wild stock speculations, is decisive to prove with what facility a crisis is met with an abundant circulating metallic currency. We were, Mr. Baring and myself, spectators of the crisis, of which I could only see the external appearances and results, whilst he was behind the scenes and deeply interested in the event. We conferred often on the subject, and came to the same conclusions. He has ever since been an advocate in England of the simultaneous use of the two metals for the sole purpose of enlarging the basis of the metallic currency.”
The “Considerations on the Currency and Banking System of the United States” appeared in December, 1830, and was republished in a separate form, with some further changes and tabular statements, in 1831.[166] As a model for clearness of statement and thorough investigation it then stood alone among American works, and even in Europe it might be difficult to find anything much superior. Nearly half a century has elapsed since this essay was written; finance has made great progress, particularly in the United States, where, under peculiar circumstances, a succession of violent convulsions ended in building up a completely new system of currency and banking; yet even to-day Mr. Gallatin’s essay is indispensable to the American student of finance. There is no other work which will guide him so surely through the intricacies of our early financial history.
1831.
The essay had, however, one effect which its author did not foresee. He wrote as an economist and financier, whereas the bank charter was a political question. As a matter of finance he argued, as every man who was not a politician and who knew anything of finance then argued, in favor of the bank. That he was perfectly right can hardly be made a matter of question; the value of the bank as a financial instrument was very great; the consequences of destroying it were disastrous in the extreme, and were acutely felt during at least five-and-twenty years. The popular fear of its hostility to our liberties was one of those delusions which characterize ignorant stages of society, and which would have had no importance unless politicians had found it a convenient ally. The kindred theory of its unconstitutionality was even then untenable, and is now ridiculous. The people of the United States have learned since that time many lessons in regard to their Constitution, and they have also learned that they hold all corporations at their mercy, and that if there is any danger to liberty it is quite as likely to be the liberties of corporations as those of the people which suffer. All this was even then plain enough to a man like Mr. Gallatin, who had in forty years of experience studied these subjects from every point of view; but there was another question, the answer to which was not so clear. Supposing the bank to be destroyed, was it worth while to attempt its reconstruction? Setting aside the financial question, was it not better to accept the pecuniary loss, even indefinitely, until some new remedy should be found, rather than convulse all economical interests with this perpetually recurring political contest? Most men would now agree with Mr. Gallatin that, under those circumstances, it was better to abandon the struggle and to seek new means for answering the same ends; but this was not the opinion of the Whig party.