“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.
Mr. Gallatin stated the debt of the United States—
| On January 1, 1801, at | $80,161,207.60 |
| On January 1, 1802, at | 77,881,890.29 |
| =========== | |
| Reduction | $2,279,317.31 |
This difference was the amount of principal paid during the year 1801, the result of the management of his predecessors. On December 18, 1801, Mr. Gallatin entered upon an examination of the time in which the total debt might be discharged, and showed that, by the annual application of $7,300,000 to the principal and interest the debt would in eight years, i. e. on January 1, 1810, be reduced (by the payment of $32,289,000 of the principal) to $45,592,739, and that the same annual sum of $7,300,000 would discharge the whole debt by the year 1817. The revenues of the Union he found sufficient to defray all the current expenses. In his report to Congress at the beginning of the session he designated this sum of $7,300,000 to be set aside from the revenues, and Congress gave the requisite authority. An extract from a tabular statement submitted to the House of Representatives, April 16, 1810, will show how nearly Mr. Gallatin approached the result at which he aimed, and the nature of the embarrassment he encountered on the path.