Albert Gallatin Controls America's Finances
Albert Gallatin was Secretary of Treasury for both Thomas Jefferson and James Madison.
Gallatin traversed the difficult road between Jefferson’s goals and the national debt left to him by Alexander Hamilton.
This is part two of Gallatin’s life, for part one click here.
Whiskey Rebellion
General Washington was coming.
The people had resisted his tax on whiskey, and the President was not happy.
For the first and only time in America history, the Commander-in-Chief of the United States was leading troops to battle.
As the soldiers crossed the State of Pennsylvania, Albert Gallatin confronted the rebels.
Their cause was just, he conceded, but there was no way their resistance would hold up to the might of 13,000 soldiers. One of the main reasons the Constitution had been passed was so that the government could suppress revolts of this nature.
The disgruntled citizens took his advice and dispersed before Washington arrived. The Whiskey Rebellion ended without a fight.
Democratic-Republican Economist
After defusing the tensions in western Pennsylvania, Gallatin was elected to the House of Representatives.
Due to his knowledge of taxation and finance, Albert quickly became a leader of the Democratic-Republican Party. He was the most vocal critic of Secretary of the Treasury Alexander Hamilton’s policies.
When Thomas Jefferson became president in 1801, he recruited Gallatin to take over the Treasury Department.
Secretary of the Treasury
Albert Gallatin was now the third most powerful member of the Democratic-Republican Party, after Jefferson and James Madison.
Gallatin organized the financial policy of the party, bridging the gap between Jefferson’s ideal of an agrarian republic and the legacy of industrialization/national debt left by Hamilton.
Albert went about reducing the national debt, cutting it in half by the end of Jefferson’s presidency. He also lowered taxes and reduced governmental spending.
Jefferson’ most important (and disastrous) economic decision was the Embargo Act of 1807. He pushed this legislation through in an effort to punish Europe for attempting to drag America into the Napoleonic Wars.
The Embargo Act was passed despite Gallatin’s strenuous disapproval.
Madison Administration
After James Madison was elected President, he considered Albert Gallatin for the position of Secretary of State. At the time, this was the second most powerful position in the country.
Madison was convinced by other high-ranking members of the Democratic-Republican Party to keep Gallatin in Treasury, as he was the most able person for that office.
Albert made a surprising decision when he attempted to extend the charter of the First Bank of the United States. This was voted down by his party who controlled Congress. The bank was still associated with Hamilton and there was no reasoning by Gallatin which could change their minds.
When the War of 1812 began, Gallatin had difficulty financing the Army. Although it troubled him, he was forced to increase taxes and tariffs.
Additionally, the government was forced to borrow money. By the end of the war, the national debt had skyrocketed, making Gallatin’s earlier efforts obsolete.
Peace
Gallatin was chosen as part of the delegation who went to Europe with the goal of negotiating an end to the War of 1812.
Upon his departure, Albert resigned his position as Secretary of the Treasury. He had served for thirteen consecutive years, to this day the longest person to hold that office.
After concluding peace with Great Britain, Gallatin spent seven years as the Minister to France. After an additional year as Minister to Great Britain, Albert returned to America and settled in New York City.
In his final years, Gallatin helped found New York University. He opposed most of Andrew Jackson’s, Martin Van Buren’s, and James K. Polk’s policies.
Albert Gallatin Passed away in 1849, just eleven years before the outbreak of the Civil War. Because of this, he is one of the last surviving Founding Fathers.
If you are interested in learning about other Founders who helped create the financial institutions on which the United States are based, check out these articles on Robert Morris and Thomas Willing.
For a more complete analysis of Albert Gallatin’s effect on early American, read ‘Jefferson’s Treasure’ which can be found through the affiliate link below.
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