Albert Gallatin
Jefferson, 1804 | 1,416,360.00 | 672,148.72 | 50,846,784.91
1808 | -- | 85,782.03 | 62,758,841.27
+--------------+----------------+----------------
| 1,416,360.00 | 757,930.75 | 113,605,626.18
------------------+--------------+----------------+----------------
EXPENDITURES.
------------------+---------------+---------------+--------------+
Four years | Civil List. | Foreign |Miscellaneous.|
ending | | Intercourse | |
December 31. | | including | |
| | Awards. | |
------------------+---------------+---------------+--------------+
Adams, 1800 | $2,329,433.08 | $1,793,879.57 | $621,633.37 |
+---------------+---------------+--------------+
Jefferson, 1804 | 2,297,648.17 | 3,144,093.00 | 1,169,601.87 |
1808 | 2,616,772.77 | 5,441,669.24 | 1,721,876.87 |
+---------------+---------------+--------------+
| 4,914,420.94 | 8,585,762.24 | 2,891,478.74 |
------------------+---------------+---------------+--------------+
------------------+---------------+-------------+--------------+
Four years | Military | Pensions. | Indian |
ending | Forts, etc. | | Department. |
December 31. | | | |
| | | |
------------------+---------------+-------------+--------------+
Adams, 1800 | $8,076,750.71 | $356,677.06 | $99,299.88 |
+---------------+-------------+--------------+
Jefferson, 1804 | 4,549,572.11 | 301,968.66 | 279,500.00 |
1808 | 6,126,656.97 | 316,806.16 | 849,700.00 |
+---------------+-------------+--------------+
| 10,676,229.08 | 618,774.82 | 1,129,200.00 |
------------------+---------------+-------------+--------------+
------------------+----------------+----------------+----------------
Four years | Naval | Public Debt. | Total.
ending | Establishment. | |
December 31. | | |
| | |
------------------+----------------+----------------+----------------
Adams, 1800 | $8,070,777.52 | $18,957,962.69 | $40,306,413.88
+----------------+----------------+----------------
Jefferson, 1804 | 5,432,049.15 | 32,258,658.68 | 49,433,091.64
1808 | 6,853,673.79 | 32,927,739.85 | 56,854,985.65
+----------------+----------------+----------------
| 12,285,722.94 | 65,186,398.53 | 106,288,077.29
------------------+----------------+----------------+----------------
Adams--Receipts $42,040,630.45
Adams--Expenditures 40,306,413.88
--------------
Under Wolcott, Secretary 1,734,216.57
Jefferson--Receipts $113,605,626.18
Jefferson--Expenditures 106,288,077.29
--------------
Under Gallatin, Secretary 7,317,584.89[12]
[**Transcriber's Note: Some of the numbers in the above tables do not
add up, but reflect the actual numbers given in the original document.]
The arrangements being completed, Jefferson called Congress together in
October, 1803, for a ratification of the treaty; the commissioners, by
virtue of the authority granted them, had already guaranteed the advance
by the Barings of ten million livres ($2,000,000). On October 25, 1803,
Gallatin made a report to Congress on the state of the finances. It
showed a reduction of the public debt in the two and one half years of
his management, April 1, 1801, to September 30, 1803, of $12,702,404.
The only question to be considered was whether any additional revenues
were wanted to provide for the _new debt_ which would result from the
purchase of Louisiana.
The sum called for by treaty, fifteen millions, consisted of two items:
1st, $11,250,000 payable to the government of France in a stock bearing
an interest of six per cent. payable in Europe, and the principal to be
discharged at the Treasury of the United States; 2d, a sum which could
not exceed, but might fall short of, $3,750,000, payable in specie at
the Treasury of the United States to American citizens having claims of
a certain description upon the government of France.
It is interesting here to note Mr. Gallatin's distinction between the
place of payment of interest and of principal as a new departure in
American finance. The principal and interest of foreign loans had up to
that period been paid abroad. But a United States stock was an
obligation of a different character and properly payable at home. In the
large negotiations which Secretary Chase had in 1862 with the Treasury
Note Committee of the Associated Banks,[13] this policy was matter of
grave debate. The determined American pride of Mr. Chase prevailed, and
both the principal _and interest_ of the loans created were made payable
at the Treasury of the United States. These may be small matters in
their financial result, but are grave points in national policy.
The only financial legislation necessary to carry out the Louisiana
purchase was a provision that $700,000 of the duties on merchandise and
tonnage, a sum sufficient to pay the interest on the new debt, be added
to the annual permanent appropriation for the sinking fund, making a sum
of $8,000,000 in all.
The new debt would, Gallatin said, neither impede nor retard the payment
of the principal of the old debt; and the fund would be sufficient,
besides paying the interest on both, to discharge the principal of the
old debt before the year 1818, and of the new, within one year and a
half after that year. In this expectation he relied solely on the
maintenance of the revenue at the amount of the year 1802, and in no way
depended on its probable increase as a result of neutrality in the
European war; nor on any augmentation by reason of increase of
population or wealth, nor the effect which the opening of the
Mississippi to free navigation might be expected to have on the sales of
public lands and the general resources of the country.
In his report of December 9, 1805, Mr. Gallatin reviewed the results of
his first four years of service, April 1, 1801, to March 31, 1805.
RECEIPTS.
Duties on tonnage and importation of
foreign merchandise $45,174,837.22
From all other sources 5,492,629.82
--------------
$50,667,467.04
==============
EXPENDITURES.
Civil list and miscellaneous $3,786,094.79
Intercourse with foreign nations 1,071,437.84
Military establishment and Indian department 4,405,192.26
Naval establishment 4,842,635.15
Interest on foreign debt 16,278,700.95
Reimbursement of debt from surplus
revenue 19,281,446.57
--------------
$49,665,507.56
The Louisiana purchase and the admirable manner of its financial
arrangement were important factors in Jefferson's reelection. Mr.
Gallatin was now sure of four years, at least, for the prosecution of
his plan of redemption of the public debt. Estimating that with the
increase of population at the rate of thirty-five per cent. in ten
years, and the corresponding growth of the revenue, he could count upon
a net annual surplus of $5,500,000, he now proposed to convert the
several outstanding obligations into a six per cent. stock amounting,
January 1, 1809, to less than _forty millions of dollars_, which the
continued annual appropriation of $8,000,000 would, besides paying the
interest on the Louisiana debt, reimburse within a period of less than
seven years, or before the end of the year 1815. After that year no
other incumbrance would remain on the revenue than the interest and
reimbursement of the Louisiana stock, the last payment of which in the
year 1821 would complete the final extinguishment of the public debt.
The conversion act was passed February 1, 1807, and books were opened on
July 1 following. On February 27, 1807, Mr. Gallatin made a special
report on the state of the debt from 1801 to 1807, showing a diminution,
notwithstanding the Louisiana purchase, of $14,260,000.
In the summer of 1807 war with England seemed inevitable. Gallatin had
the satisfaction to report a full treasury,--the amount of specie
October 7, 1807, reaching over eight and one half millions,--and an
annual unappropriated surplus, which could be confidently relied upon,
of at least three millions of dollars. On this subject his remarks in
the light of subsequent history are of extreme interest. While
refraining from any recommendations as to the application of this
surplus, either to "measures of security and defense," or to "internal
improvements which, while increasing and diffusing the national wealth,
will strengthen the bonds of union," as "subjects which do not fall
within the province of the Treasury Department," he proceeds to consider
the advantage of an accumulation in the Treasury. In this report he
rises with easy flight far above the purely financial atmosphere into
the higher plane of political economy.
"A previous accumulation of treasure in time of peace might in a
great degree defray the extraordinary expenses of war and diminish
the necessity of either loans or additional taxes. It would provide
during periods of prosperity for those adverse events to which
every nation is exposed, instead of increasing the burthens of the
people at a time when they are least able to bear them, or of
impairing, by anticipations, the resources of ensuing
generations....
"That the revenue of the United States will in subsequent years be
considerably impaired by a war neither can nor ought to be
concealed. It is, on the contrary, necessary, in order to be
prepared for the crisis, to take an early view of the subject, and
to examine the resources which should be selected for supplying the
deficiency and defraying the extraordinary expenses....
"Whether taxes should be raised to a greater amount or loans be
altogether relied on for defraying the expenses of the war, is the
next subject of consideration.
"Taxes are paid by the great mass of the citizens, and immediately
affect almost every individual of the community. Loans are supplied
by capital previously accumulated by a few individuals. In a
country where the resources of individuals are not generally and
materially affected by the war, it is practicable and wise to raise
by taxes the greater part at least of the annual supplies. The
credit of the nation may also from various circumstances be at
times so far impaired as to have no resource but taxation. In both
respects the situation of the United States is totally
dissimilar....
"An addition to the debt is doubtless an evil, but experience
having now shown with what rapid progress the revenue of the Union
increases in time of peace, with what facility the debt, formerly
contracted, has in a few years been reduced, a hope may confidently
be entertained that all the evils of the war will be temporary and