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CHAPTER XXIV.

GALLATIN'S FINANCIAL POLICY.

FEW days before his inauguration, Jefferson wrote a letter, in which he said that he hoped that the body of the nation, even that part which French excesses forced over to the Federal side, would join the Republicans, leaving only those who were pure monarchists, and who would be too few to form a sect. This hope exerted an important influence upon his policy during the eight years of his two administrations.

Jefferson's inaugural address.

Extreme partisans on both sides were dissatisfied with his inaugural. No wonder; for one of its objects seemed to be to prove that there was no difference between them. "Let us unite with one heart and one mind," he had said; "let us restore to social intercourse that harmony and af fection, without which liberty and even life itself are but dreary things. And let us reflect, that having banished from our land that religious intolerance under which mankind so long bled and suffered, we have yet gained little, if we countenance a political intolerance as despotic, as wicked, and capable of as bitter and bloody persecutions. During the throes and convulsions of the ancient world, during the agonizing spasms of infuriated man, seeking through blood and slaughter his long lost

liberty, it was not wonderful that the agitation of the billows should reach even this distant and peaceful shore; that this should be more felt and feared by some and less by others; that this should divide opinions as to measures of safety. But every difference of opinion is not a difference of principle. We are all Republicans, we are all Federalists." Jefferson knew very well that this kind of talk was not what the extreme partisans of his own party expected. About the end of March he wrote, "I am sensible how far I should fall short of effecting all the reformation which reason would suggest and experience approve, were I free to do whatever I thought best; but when we reflect how difficult it is to move or inflect the great machine of society, how impossible to advance the notions of a whole people suddenly to ideal right, we see the wisdom of Solon's remark, that no more good must be attempted than the nation can bear, and all will be chiefly to reform the waste of public money, and thus drive away the vultures who prey upon it, and improve some little on old routines."

Whatever the motive of Jefferson's conduct, whether his conduct was due to the mere desire to gain popularity, or to the patriotic wish to bring over the great mass of the Federalists to what he conceived to be the right side, or whether, as is most probable, to a

mixture of both, it prevented him from at

tempting to give immediate effect to the

How far Jeffer

son attempted

to put in

practice the revolution of

"revolution of 1800," save in improving "some little on old

routines," and in reforming the "waste of the public money." As far back as the time of Senator Maclay, as we know, Republicans had condemned the levees and speeches of Washington as savoring of monarchy, and our diplomatic establishment as unnecessarily expensive. To do away with the levees, therefore, to communicate with Congress by message, to reduce the diplomatic establishment, was, in the eyes of Jefferson, an "improvement on old routines" which would not antagonize the "Republican Federalists," whom he hoped to win over to his party. And he knew very well that any reform in the waste of public money would be popular with the great majority of the American people, no matter which party they belonged to. Accordingly, his great Secretary of the Treasury, Albert Gallatin, was allowed to give complete expression to the "revolution of 1800," so far as it could be done in the management of the finances.

Comparison

between Hamilton and Gallatin.

Republicans had constantly charged that Hamilton and the Federalists regarded a national debt as a national blessing; Gallatin and the Republicans, on the contrary, regarded a national debt as a pillar of corruption. Both Hamilton and Gallatin had political as well as financial ends in view. Hamilton's political aim was to tie the rich and influential all over the country to the support of the general government by pecuniary interest. The political aim of Gallatin was to free the limbs of the young republic from every weight that tended to prevent them

from developing into the symmetry and proportion of an ideal state. Hamilton, with too low an estimate of human nature, thought the only way men could be induced to serve the State was by making it their pecuniary interest to do so; Gallatin, with too high an estimate of human nature, thought that one of the chief dangers of the State lay in warping men's natural desires to serve it by appeals to their pecuniary interests.

Regarding a national debt as a pillar of corruption, Gallatin based his financial system on the principle that the expenditures of the government must

Details of Gal

be so related to its income as to enable it to latin's financial system. pay the national debt in as short a time as possible, without imposing too heavy a burden on the people in the shape of taxes, and without having recourse to taxes that the general government ought not to lay. He estimated that the government could apply $7,300,000 a year to the payment of its debts, and he calculated that the whole of it, interest and principal, would be paid in sixteen years, if this sum yearly were devoted to that purpose. Proposing that this sum should be applied by law to this object, it remained to decide what further expenses should be indulged in, and how the revenue should be raised.

The net receipts from customs, lands and postage he calculated at $9,950,000 for the year. In addition to this, the internal taxes laid by the Federalists amounted in all to $650,000, which made an income of $10,600,000,

or $3,300,000 more than the sum to be devoted to the payment of the debt.

But internal taxes, as we know, were not in harmony with Republican theories. Gallatin, therefore, proposed to sacrifice the revenue obtained from this source, leaving but $2,650,000 for the entire expenses of the government. Of this sum he proposed that $930,000 should be devoted to the support of the army and $670,000 to the support of the navy.

When Henry Dearborn and Robert Smith, Secretaries of War and the Navy, respectively, accepted this scheme with unimportant modifications, and Congress embodied it in laws, it became clear that Jefferson's theory of government was actually to be put in practice. That theory was, as we know, that the general government was the foreign branch of our governmental system, its only domestic functions consisting in the promotion of agriculture and commerce, and the diffusion of information; and that its management of "foreign concerns" should proceed on the theory that nations could be compelled to respect our rights by commercial restrictions. Evidently, a government whose entire domestic expenses, excepting the postoffice, were estimated at $750,000$1,900,000 was the sum finally agreed on for the army and navy-including the cost of the collection and disbursement of the revenues, could scarcely be said to attempt the discharge of any domestic functions. And a government whose army and navy were to be supported