The first official act of the Treasury Department of national interest, dated at the national capital, directed that the Secretary should make an annual report to Congress of the state of the finances of the nation, containing estimates of the public revenue and expenditure, as well as plans for improving and increasing the revenues. Hamilton had done this voluntarily, and his example, of a Cabinet officer making communications with Congress, was now made imperative by the action of law. May 10, 1800, Samuel Dexter, another signer of the Declaration of Independence, was appointed Secretary of the Treasury in place of Oliver Wolcott. On the election of Jefferson, the foe of the Hamiltonian financial policy, the Washingtonian era of the Federal Government ended, and Mr. Dexter found himself out of harmony with the Government. After the lapse of a year, President Jefferson set the precedent of removal, and, January 26, 1802, appointed Albert Gallatin, Secretary of the Treasury.
Albert Gallatin was born in Geneva, Switzerland, in 1761. After receiving a liberal education, he came to this country at the age of eighteen. He became a tutor in Harvard College, but removing to Philadelphia, then the national capital, rose so high in public esteem that in 1790, at the age of thirty, he was elected to Congress, and afterwards to the Senate. In this body, his reports on matters of finance attracted universal attention, and, as a result, he was made Secretary of the Treasury of the United States. President Jefferson, on handing him his commission, said: “Mr. Gallatin, your most important duty will be to examine the accounts, and all the records of your department, in order to discover the blunders and frauds of Hamilton, and to ascertain what changes will be required in the system. This is a most important duty, and will require all your industry and acuteness. To do it thoroughly, you may employ whatever extra service you require.”
Gallatin was an ardent partisan of the President, and declares, himself, that he undertook his task of exposing Hamilton, and bringing his lofty head low, with great zest and thoroughness. But his hunt for “blunders” and venality merged soon into a labor of love. Upon his just and comprehensive mind, Hamilton’s perfect system, day by day, revealed itself. By the time he had mastered its details, and measured its completeness, he was filled with admiration. “In the honest enthusiasm of a truly great mind he went to Mr. Jefferson and said: ‘Mr. President, I have, as you directed, made a thorough examination of the books, accounts and correspondence of my department, from its commencement. I have found,’ said the conscientious Secretary, ‘the most perfect system ever formed. Any change under it would injure it.’ Hamilton made no blunders, committed no frauds; he did nothing wrong.”
Albert Gallatin marked his administration by a series of reports regarding the best method of canceling the national debt, the proper policy of disposing of the public lands, and the legality and necessity of establishing a national bank. Thus, contrary to his original intention, he associated himself with Morris and Hamilton as one of the three founders of the financial policy of the nation.
By the year 1804, the business of the Treasury had so increased, that an effort was made toward the erection of a building, to become the especial depository of the records. An idea may be given of the demands of the infant government and its notions of economy, in the facts that this vaunted fire-proof public building is much smaller than an unpretentious private dwelling of the present time, and that it cost less than the sum of twelve thousand dollars.
Mr. Madison, on his accession to the Presidency, retained Mr. Gallatin at the head of the Treasury.
On March 1, 1809, an act of Congress directed that all warrants drawn on the Treasury by the Secretaries of the different executive departments, should designate the appropriation to which they were charged.
June 18, 1812, war was declared, and Congress was convened in special session, to consider the necessities of the Treasury. Out of the legislation which followed, came our present internal revenue laws. Mr. Gallatin, after having held his office longer than any of his predecessors, resigned, and went on a foreign mission. A period of extreme money depression succeeded his resignation. August 24, 1814, the British troops entered Washington, and, with the Capitol and other public buildings, burned the Treasury. The business of the Treasury, for a considerable time afterwards, was carried on in what was known as “the Seven Buildings,” in the western part of the city.
George N. Campbell, of Tennessee, Mr. Gallatin’s successor, attempted to negotiate a loan of twenty-five millions of dollars, but failed, and resigned his office. The national credit was at its lowest ebb.
When the need of a great man is absolute, Providence usually has one ready for the emergency. He appeared at this crisis, in the person of Alexander J. Dallas, of Pennsylvania. On entering upon his office, as head of the Treasury, he replied to the request of Congress, that he should suggest ways for the restoration of the public credit, in one of the most powerful documents extant in the archives of the Treasury. Mr. Dallas so inspired the faith of the capitalists of the country, that the national credit was at once restored. “The Treasury notes, issued on the universal opinion that they would be a drug in the market, rose to a premium.”