The early republic was blessed with two financial geniuses, one Federalist, one Republican. Everybody remembers Alexander Hamilton, and if there were justice in the world, they would equally well remember Albert Gallatin, who was to Jefferson what Hamilton was to Washington. The two Virginia planter-statesmen were highly intelligent and sophisticated men of the world, but they were babes in the woods when it came to finance. Hamilton and Gallatin, between them, educated the statesmen and shaped the financial underpinnings of the new republic.
Abraham Alfonse Albert Gallatin was half a generation younger than his great chief, having been born, in 1761, in Geneva, and emigrating to Pennsylvania in the 1780s. (All his life, Gallatin spoke with a decided French accent.) Gallatin’s early life is highly interesting in its up-and-down experiences typical of so many immigrants, but the story can’t be told here. He tried his hand at trading in Maine, taught French at Harvard College, bought land in western Pennsylvania, planned various schemes that didn’t come off, and one — making glass – that did. But mainly, Gallatin participated in Pennsylvania politics, first as a member of the state constitutional convention in 1789, then, the following year, as a member of the General Assembly.
He was elected to the United States Senate, but was disqualified (in a party-line vote of the full Senate) as not having had the required constitutional minimum nine years of citizenship. Gallatin pointed out his unbroken residence of thirteen years in the United States, his 1785 oath of allegiance to the Commonwealth of Virginia, his service in the Pennsylvania legislature, and his substantial property holdings in the United States, but he was removed.
Back home, he was instrumental in securing a peaceful end to the whiskey rebellion of 1791. Gallatin’s neighbors approved his advocacy of their cause and elected him to the U.S. House of Representatives for three terms, 1795-1801, where he became the major spokesman on finance for Jefferson’s party. In 1797, when majority leader Madison retired, Gallatin took his place, leading the opposition to many of Hamilton’s policy proposals. Gallatin’s mastery of public finance was an ability rare among the Jeffersonian party. It was natural that Jefferson, upon his election as president, would name him Secretary of the Treasury. Gallatin would hold that office until February, 1814, five years into Madison’s presidency.
It was a highly successful tenure. First in order of importance was the problem of dealing with the national debt. Hamilton considered a national debt a “national blessing,” because it gave so many well-to-do citizens a financial stake in the survival and success of the new republic. Jefferson and Gallatin saw it quite differently. Gallatin worked hard to lower taxes and lower the debt at the same time. In 1801, the national debt was $80 million. Gallatin applied three quarters of federal revenues to the debt, and was able to reduce it to $45 million despite the loss of revenue that followed repeal of the whiskey tax in 1802, and despite spending $15 million on Louisiana.
Reducing the debt that drastically required starving the army and navy, which could be done in those first years when Neither England nor France nor Spain was in shape to molest our finances or commerce. Later, when British harassment of America’s merchant trade led Jefferson to propose an embargo on foreign commerce, Gallatin supported him, but reluctantly. He knew the harm the policy would inevitably do to the nation’s finance.
But then he lived long enough to see the War of 1812 do far worse harm, not to mention threatening the country’s survival. In 1813, with expenditures of $39 million met by only $15 million in revenue, Gallatin was forced to reintroduce taxes on whiskey and salt, and a direct tax on land and slaves. He financed the deficit and paid the direct cost of the war by issuing $87 million in bonds. Then, seeing the need for a national bank, he helped charter the Second Bank of the United States that Andrew Jackson would kill 20 years later.
Gallatin resigned as Secretary of the Treasury to head the United States delegation in negotiating the Treaty of Ghent, which ended the war of 1812. From 1816 to 1823 Gallatin served as minister to France, then returned home to Pennsylvania. In 1825, John Quincy Adams offered him another term as Secretary of the Treasury, but Gallatin declined. In 1826 and 1827, he served as minister to Great Britain. Retiring again, he settled in New York City, and helped found New York University so that working and merchant class people might have access to university education. Finally, he founded the American science of ethnology, helping to found the American Ethnological Society in 1842. He himself was the author of A Table of Indian Languages of the United States (1826) and Synopsis of the Indian Tribes of North America (1836).
Consider the list: politician, diplomat, ethnologist, linguist, founder of the University of the City of New York, co-founder of the American Ethnological Society, author of two scholarly books, and, not least, the longest-serving Treasury Secretary in our history. He died in 1849, and was gradually forgotten, which hardly seems just.