5th March, 1801.
... The President was inaugurated yesterday, and this day has nominated Messrs. Madison, Dearborn, Lincoln, and Robert R. Livingston for Secretaries of State and War, Attorney-General and minister to France, respectively, all of which have been approved of by the Senate. A majority of that body would, it is supposed, have rejected a nomination for a new Secretary of the Treasury; whether that be true or not I cannot tell, but as I could not at any event have accepted immediately, no nomination was made. Mr. Dexter has with great civility to the President agreed to stay until a successor shall have been appointed. Both Smith and Langdon decline. Mrs. Smith is here and hates this place. But to come to the point: Mr. Jefferson requested that I should stay three days longer in order to see Mr. Madison and that I should be able to understand the general outlines which are contemplated or may be agreed on as the leading principles of the new Administration. As it was for my convenience that the appointment was delayed, I could not, even had I thought my presence useless, have objected to his wish.... Mr. Adams left the city yesterday at four o’clock in the morning. You can have no idea of the meanness, indecency, almost insanity, of his conduct, specially of late. But he is fallen and not dangerous. Let him be forgotten. The Federal phalanx in Senate is more to be feared. Yet with the people on our side and the purity of our intentions, I hope we will be able to go on. But indeed, my dear, this is an arduous and momentous undertaking in which I am called to take a share....
The struggle was completely over. All the dangers, real and imaginary, had vanished. The great Federal party which had created, organized, and for twelve years administered the government, and whose chief now handed it, safe and undisturbed, to Mr. Jefferson and his friends, was prostrate, broken and torn by dying convulsions. The new political force of which Mr. Jefferson was the guide had no word of sympathy for the vanquished. Full of hope and self-confidence, he took the helm and promised that “now the ship was put on her Republican tack she would show by the beauty of her motion the skill of her builders.” Even Mr. Gallatin’s cooler head felt the power of the strong wine, success. He too believed that human nature was to show itself in new aspects, and that the failures of the past were due to the faults of the past. “Every man, from John Adams to John Hewitt, who undertakes to do what he does not understand deserves a whipping,” he wrote to his wife a year later, when his tailor had spoiled a coat for him. He had yet to pass through his twelve years of struggle and disappointment in order to learn how his own followers and his own President were to answer his ideal, when the same insolence of foreign dictation and the same violence of a recalcitrant party presented to their and to his own lips the cup of which John Adams was now draining the dregs.
BOOK III.
THE TREASURY. 1801-1813.
IN governments, as in households, he who holds the purse holds the power. The Treasury is the natural point of control to be occupied by any statesman who aims at organization or reform, and conversely no organization or reform is likely to succeed that does not begin with and is not guided by the Treasury. The highest type of practical statesmanship must always take this direction. Washington and Jefferson doubtless stand pre-eminent as the representatives of what is best in our national character or its aspirations, but Washington depended mainly upon Hamilton, and without Gallatin Mr. Jefferson would have been helpless. The mere financial duties of the Treasury, serious as they are, were the least of the burdens these men had to carry; their keenest anxieties were not connected most nearly with their own department, but resulted from that effort to control the whole machinery and policy of government which is necessarily forced upon the holder of the purse. Possibly it may be said with truth that a majority of financial ministers have not so understood their duties, but, on the other hand, the ministers who composed this majority have hardly left great reputations behind them. Perhaps, too, the very magnitude and overshadowing influence of the Treasury have tended to rouse a certain jealousy in the minds of successive Presidents, and have worked to dwarf an authority legitimate in itself, but certainly dangerous to the Executive head. Be this as it may, there are, to the present time, in all American history only two examples of practical statesmanship which can serve as perfect models, not perhaps in all respects for imitation, but for study, to persons who wish to understand what practical statesmanship has been under an American system. Public men in considerable numbers and of high merit have run their careers in national politics, but only two have had at once the breadth of mind to grapple with the machine of government as a whole, and the authority necessary to make it work efficiently for a given object; the practical knowledge of affairs and of politics that enabled them to foresee every movement; the long apprenticeship which had allowed them to educate and discipline their parties; and finally, the good fortune to enjoy power when government was still plastic and capable of receiving a new impulse. The conditions of the highest practical statesmanship require that its models should be financiers; the conditions of our history have hitherto limited their appearance and activity to its earlier days.
The vigor and capacity of Hamilton’s mind are seen at their best not in his organization of the Treasury Department, which was a task within the powers of a moderate intellect, nor yet in the essays which, under the name of reports, instilled much sound knowledge, besides some that was not so sound, into the minds of legislature and people; still less are they shown in the arts of political management,—a field into which his admirers can follow him only with regret and some sense of shame. The true ground of Hamilton’s great reputation is to be found in the mass and variety of legislation and organization which characterized the first Administration of Washington, and which were permeated and controlled by Hamilton’s spirit. That this work was not wholly his own is of small consequence. Whoever did it was acting under his leadership, was guided consciously or unconsciously by his influence, was inspired by the activity which centred in his department, and sooner or later the work was subject to his approval. The results—legislative and administrative—were stupendous and can never be repeated. A government is organized once for all, and until that of the United States fairly goes to pieces no man can do more than alter or improve the work accomplished by Hamilton and his party.
What Hamilton was to Washington, Gallatin was to Jefferson, with only such difference as circumstances required. It is true that the powerful influence of Mr. Madison entered largely into the plan of Jefferson’s Administration, uniting and modifying its other elements, and that this was an influence the want of which was painfully felt by Washington and caused his most serious difficulties; it is true, too, that Mr. Jefferson reserved to himself a far more active initiative than had been in Washington’s character, and that Mr. Gallatin asserted his own individuality much less conspicuously than was done by Mr. Hamilton; but the parallel is nevertheless sufficiently exact to convey a true idea of Mr. Gallatin’s position. The government was in fact a triumvirate almost as clearly defined as any triumvirate of Rome. During eight years the country was governed by these three men,—Jefferson, Madison, and Gallatin,—among whom Gallatin not only represented the whole political influence of the great Middle States, not only held and effectively wielded the power of the purse, but also was avowedly charged with the task of carrying into effect the main principles on which the party had sought and attained power.
In so far as Mr. Jefferson’s Administration was a mere protest against the conduct of his predecessor, the object desired was attained by the election itself. In so far as it represented a change of system, its positive characteristics were financial. The philanthropic or humanitarian doctrines which had been the theme of Mr. Jefferson’s philosophy, and which, in a somewhat more tangible form, had been put into shape by Mr. Gallatin in his great speech on foreign intercourse and in his other writings, when reduced to their simplest elements amount merely to this: that America, standing outside the political movement of Europe, could afford to follow a political development of her own; that she might safely disregard remote dangers; that her armaments might be reduced to a point little above mere police necessities; that she might rely on natural self-interest for her foreign commerce; that she might depend on average common sense for her internal prosperity and order; and that her capital was safest in the hands of her own citizens. To establish these doctrines beyond the chance of overthrow was to make democratic government a success, while to defer the establishment of these doctrines was to incur the risk, if not the certainty, of following the career of England in “debt, corruption, and rottenness.”
In this political scheme, whatever its merits or its originality, everything was made to depend upon financial management, and, since the temptation to borrow money was the great danger, payment of the debt was the great dogma of the Democratic principle. “The discharge of the debt is vital to the destinies of our government,” wrote Mr. Jefferson to Mr. Gallatin in October, 1809, when the latter was desperately struggling to maintain his grasp on the Administration; “we shall never see another President and Secretary of the Treasury making all other objects subordinate to this.” And Mr. Gallatin replied: “The reduction of the debt was certainly the principal object in bringing me into office.” With the reduction of debt, by parity of reasoning, reduction of taxation went hand in hand. On this subject Mr. Gallatin’s own words at the outset of his term of office give the clearest idea of his views. On the 16th November, 1801, he wrote to Mr. Jefferson:
“If we cannot, with the probable amount of impost and sale of lands, pay the debt at the rate proposed and support the establishments on the proposed plans, one of three things must be done; either to continue the internal taxes, or to reduce the expenditure still more, or to discharge the debt with less rapidity. The last recourse to me is the most objectionable, not only because 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, but also, any sinking fund operating in an increased ratio as it progresses, a very small deduction from an appropriation for that object would make a considerable difference in the ultimate term of redemption which, provided we can in some shape manage the three per cents, without redeeming them at their nominal value, I think may be paid at fourteen or fifteen years.