The sums received from the sales in the second term of Jefferson's administration reached nearly two and one half millions of dollars, and in Madison's first term, nearly three millions of dollars. From first to last Mr. Gallatin never lost sight of the subject, though occasion did not serve for more than organization of the system which, in the four years ending 1836, yielded nearly fifty million dollars, and paid more than one third of the entire expenses of the government. To John W. Eppes[18] Mr. Gallatin wrote in the crisis of 1813, “The public lands constitute the only great national resource exclusive of loans and taxes. They have already been mentioned as a fund for the ultimate extinguishment of the public debt.” The land offices were then in full operation.
In 1810 Mr. Gallatin prepared an “Introduction to the collection of laws, treaties, and other documents respecting the public lands,” which was published pursuant to an act of Congress passed in April of that year.
Free Trade
While Mr. Gallatin differed from his early Republican associates in many of their theories of administration, he was a firm believer in the best of their principles, namely, the wisdom of giving free scope to the development of national resources with the least possible interference on the part of government. One of his purposes in his persistent desire for economy in expenditure was to reduce the tariff upon foreign importations to the lowest practicable limit. He was the earliest public advocate in America of the principles of free trade, and an experience of sixty years confirmed him in his convictions.
The extinguishment of the debt rendered a great reduction in the revenue possible. On the other hand, it brought the friends of a low tariff face to face with the problem of internal improvements. As the election of 1832 drew near, the advocates of the two systems ranged themselves in two great parties precisely as to-day: the advocates of the protective or American system with internal improvements as an outlet for accumulations of revenue on the one side; on the other the advocates of free trade. Between his desire for the advantages of the one with its attendant disadvantages of government interference in its prosecution, and the freedom of commerce from undue restrictions, Mr. Gallatin did not hesitate. He threw the whole force of his experience and character into the free trade cause, and became the leader of its friends.
On September 30, 1831, a convention of the advocates of free trade, without distinction of party, met at the Musical Fund Hall in Philadelphia. Two hundred and twelve delegates appeared. Among them were Theodore Sedgwick, George Peabody, and John L. Gardner from Massachusetts; Preserved Fish, John Constable, John A. Stevens, Jonathan Goodhue, James Boorman, Jacob Lorillard, and Albert Gallatin from New York; C. C. Biddle, George Emlen, Isaac W. Norris from Pennsylvania; Langdon Cheves, Henry Middleton, Joseph W. Allston, and William C. Preston from South Carolina; and men of equal distinction, bankers, merchants, statesmen, and political economists from other States. Of this convention Mr. Gallatin was the soul. He opened its business by stating the objects of the meeting, and nominated the Hon. Philip P. Barbour of Virginia for president. A general committee of two from each State was appointed, which recommended an address to the people of the United States and a memorial to Congress. The address to the people closed with a declaration that the near extinguishment of the national debt, which would be discharged by the available funds of the government on January 1, 1833, suggested that the moment was propitious for the establishment of the principles of free trade. Thus the people of the United States, who had successfully asserted the doctrines of free government, might add to its claims upon the gratitude of the world by being the first also to proclaim the theory of a free and unrestricted commerce, the genuine “American system.” Mr. Gallatin was the chairman of the committee of fourteen, one from each State represented in the convention, to prepare the memorial which was presented in their behalf to Congress, the conclusions of which, presented with his consummate ability, demonstrated with mathematical precision that a duty of twenty-five per cent. was sufficient for all the legitimate purposes of government. Here he found himself in direct opposition to Mr. Clay, whose political existence was staked upon the opposite theory. Mr. Clay answered in a great speech in the Senate in February, 1832, and forgot himself in personal denunciation of Mr. Gallatin as a foreigner with European interests at heart, and of utopian ideas; for this he expressed his regret to Mr. Gallatin in an interview arranged by mutual friends at a much later period. Mr. Gallatin's views were accepted as the policy of the country, and after some shifting of parties, in which friends and foes changed ground in subordination to other political exigencies, they prevailed in the tariff of 1846, the best arranged and most reasonable which the United States has yet seen.
It is certain that Mr. Gallatin was opposed to “protective” revenue. His preference was for an “even” duty on all imports. This is not the place for an economic discussion. The true policy of the United States is probably between the extremes of protection and free trade. The nature of our population has been changed by the enormous immigration of the last fifty years. Moreover, instead of an absolute freedom from debt the nation has had to endure the legacy of debt left by the Civil War, to meet which a development of all its resources of manufacture as well as of agriculture is required.
Administration
To arrive at a correct estimate of Mr. Gallatin's administration of the Treasury Department, a cursory review of the establishment as he received it from the hands of Mr. Wolcott is necessary. This review is confined to administration in its limited sense, namely, the direction of its clerical management under the provisions of statute law. The organization of the department as originated by Hamilton and established by the act of September 2, 1789, provided for a secretary of the treasury as head of the department, whose general duty should be to supervise the fiscal affairs of the country, and particularly to suggest and prepare plans for the improvement and support of the public credit; and, under his direction and supervision, a comptroller to adjust and preserve accounts; an auditor to receive, examine, and rectify accounts; a treasurer to receive, keep, and disburse moneys on warrants signed and countersigned; a register to keep the accounts of receipts and expenditures; and an assistant to the secretary of the treasury to fill any vacancy from absence or other temporary cause. In addition to the departments of State, Treasury, and War, a fourth, that of the Navy, was established April 30, 1798. The three departments were brought into relation with that of the Treasury by an act passed July 16, 1798, supplementary to that organizing the Treasury, and which provided, 1st, for the appointment of an accountant in each department, who was required to report to the accounting officer of the Treasury; 2d, that the Treasurer of the United States should only disburse by warrants on the Treasury, countersigned by the accountant of the Treasury; 3d, that all purchases for supplies for military or naval service should be subject to the inspection and revision of the officers of the Treasury. Mr. Jefferson, after his usual fashion of economy in the wrong direction, proposed to Mr. Gallatin “to amalgamate the comptroller and auditor into one, and reduce the register to a clerk of accounts: so that the organization should consist, as it should at first, of a keeper of money, a keeper of accounts, and the head of the department.” But in the Treasury Department there was no extravagance during Gallatin's administration, and the shifting of responsibility would bring no saving of salaries.
In May, 1800, an act was passed making it "the duty of the secretary of the treasury to digest, prepare, and lay before Congress at the commencement of every session a report on the subject of finances, containing estimates of the public revenue and expenditures, and plans for improving and increasing the revenue from time to time, for the purpose of giving information to Congress in adopting modes for raising the money requisite to meet the expenditures." Hamilton had never sent in any other than a statement of expenditure for the past fiscal year, together with the estimate of the accountant of the Treasury for the proximate wants of the departments of government. Mr. Gallatin incorporated in his annual report a balance sheet in accordance with the ordinary forms of book-keeping familiar to every accountant and indispensable in every business establishment, and such as is presented to the public in the monthly and annual statements of the Treasury Department at this day.