Albert Gallatin

Born January 29, 1761 (Geneva, Switzerland)

Died August 12, 1849 (Astoria, New York)

U.S. secretary of the treasury, congressman, diplomat

Albert Gallatin was the fourth U.S. secretary of the treasury, serving from 1801 until 1814. He held the office longer than any other person in U.S. history, and he became one of the most influential men of the early American republic. Gallatin served for eight years under President Thomas Jefferson (1743–1826; served 1801–9; see entry in volume 1) and then for four more years under President James Madison (1751–1836; served 1809–17; see entry in volume 2).

A native of Switzerland, Gallatin began life in his adopted country as a land speculator and farmer. Land speculation is the buying of undeveloped frontier land cheaply with the intention of later reselling it to settlers at a higher price, thus making a profit. In the early American period, it was a common means of gaining wealth. Gallatin also built a glass factory in 1796, the first factory of its kind west of the Appalachian Mountains.

"The ground which I occupied in that body [Congress] is well known, and I need not dwell on the share I took in all the important debates and on the great questions which during that period agitated the public mind...."

Gallatin laid the foundation for sound governmental fiscal (economic) policies that would guide the young nation for years to come. While in Congress, he established a standing committee on finance that later became the House Ways and Means Committee. Later, as secretary of the treasury, Gallatin assumed a major role in promoting the exploration and settlement of the western frontier. He also helped negotiate the Treaty of Ghent, ending the War of 1812 (1812–15). Gallatin served as U.S. ambassador to France and to England before ending a public career that lasted almost four decades.

Noble beginnings

Abraham Alfonse Albert Gallatin was born on January 29, 1761, in Geneva, Switzerland. His mother was Sophie Albertine Rolaz du Rosey, and his father, Jean Gallatin, was a merchant. Although Albert came from an old and noble family, his parents were not wealthy. Young Albert became orphaned at the age of nine and was sent to live with a distant relative, Catherine Picket.

When Albert turned thirteen, he entered the Academy of Geneva, where he received an excellent education. During Albert's time at the Academy, his natural abilities and intelligence were recognized by several renowned scholars. Albert graduated in 1779; the following year, just weeks short of his nineteenth birthday, he boarded a ship for America in search of his fortune.

Gallatin and a friend arrived in Boston, Massachusetts, in July 1780 with a shipment of tea they hoped would produce a large profit for them. Disappointed by the results, Gallatin purchased a wagon and loaded it with sugar, tobacco, and rum. He headed northward to Machias, Maine, where he hoped to sell his supplies to the local Native Americans, farmers, and soldiers stationed there. Gallatin returned to Boston in the fall of 1781 with little to show for his economic pursuits and his year on the road.

In order to pay his bills, Gallatin taught French as a resident tutor at Harvard College, but he continued searching for the means to earn his fortune. In 1783, Gallatin met Jean Savary de Valcoulon, a representative of a firm in Lyons, France, that purchased American real estate and public securities. Gallatin approached Savary with a land development project. He planned to settle European farmers and craftsmen in frontier American communities. Savary agreed to join the enterprise on the condition that Gallatin supervise the project. The men purchased 120,000 acres of land along the Ohio River in Virginia, which at that time extended far to the west past the Appalachians, and Pennsylvania. Gallatin set out to survey and register their holdings in April 1784. He settled on a rented farm in Fayette County, Pennsylvania, and opened a small store and office in preparation for the expected land rush.

Later the following year in October 1785, Gallatin took the oath of allegiance to the Commonwealth of Virginia and became an American citizen. He owned land in Monongalia County, Virginia (modern-day West Virginia), but his permanent residence was actually in the neighboring county of Fayette, Pennsylvania. Gallatin made his political debut in September 1788 as a delegate from Fayette County to an anti-Federalist convention in Harrisburg, Pennsylvania. The anti-Federalists opposed the creation of a stronger national government as recently created at the Constitutional Convention in Philadelphia in the summer of 1787. They wanted to keep most government powers at the state level.

The delegates at Harrisburg met to consider proposed revisions to the U.S. Constitution that Pennsylvania ratified in December 1787. Gallatin's political talents and leadership skills showed at the convention and placed him in a prominent position within the new state.

Gallatin also continued speculating in land and acquired 400 acres in western Pennsylvania overlooking the Monongahela River, where he built his home. By 1789, Gallatin had completed the rustic mansion which he called Friendship Hill. He brought his new bride, Sophie Allegre, to their wilderness home, but she died that fall after only a few months of marriage. Distraught, Gallatin considered returning to Geneva. However, the turmoil caused by the growing French Revolution in his native city and his heavy investments in frontier real estate kept Gallatin in America.

Friendship Hill

Gallatin's political career continued. In the winter of 1789, Gallatin was elected as a delegate to the Pennsylvania state convention, which rewrote the state constitution. The following year, he was elected to the Pennsylvania legislature as a representative of Fayette County. He was returned to office in 1791 and again in 1792 with uncontested elections. Gallatin earned a reputation as an expert in the area of public finance, and he was considered an able spokesman for the small farms and businesses he represented. During his time in the Pennsylvania Assembly, Gallatin worked to reduce the public debt left by the Revolutionary War and to abolish slavery. He pushed for prison reforms and was an advocate for a public education system. He was also instrumental in obtaining a charter (government authorization) for the Bank of Pennsylvania which was created to help manage state finances.

In 1793, Gallatin was elected to the U.S. Senate from Pennsylvania, but he was denied his seat for political reasons as there was a strong distrust of people who appeared to be foreigners. His opponents claimed Gallatin had not been an American citizen for the nine years required by the Constitution. Indeed, his strong European accent would remain a factor throughout his political career. In November 1793, Gallatin married Hannah Nicholson, a New York socialite, and returned home to Friendship Hill. The couple would have two sons and four daughters.

Gallatin found many things had changed during his absence from western Pennsylvania. An open rebellion was growing against the federal excise tax that Congress had imposed on distilled spirits. The Whiskey Rebellion resulted in the formation of a militia that attacked public offices in Pittsburgh as well as any government agents sent to collect the tax from local farmers. A militia is an organized military force, made up of citizens, that serves in times of emergency. Gallatin did not support the tax, but he spoke out in favor of the need for it at various public gatherings. During the summer of 1794, he urged all citizens to peacefully submit to the tax in order to restore law and order in the state. When federal troops arrived at the end of summer to put down the rebellion, they found only a few remaining lawbreakers who were taken to Philadelphia for trial.

Gallatin's role in settling the Whiskey Rebellion earned him the gratitude from the citizens of western Pennsylvania. They elected him to the U.S. House of Representatives that fall. He served from 1795 until 1801, becoming the leader of the Democratic-Republican minority in 1797. From this position of power, Gallatin once again focused on reducing the public debt. He also worked to guard against the future accumulation of debts. Gallatin insisted that the Treasury Department should be held accountable to Congress by submitting an annual report. While in office, he set up the House Committee on Finance, which was the forerunner of the present-day Ways and Means Committee (see box). By publishing a number of reports and pamphlets, Gallatin kept the public aware of his views and activities. Sketch of the Finances of the United States was published in 1796, and Views of the Public Debt, Receipts, and Expenditures was published in 1800.

The House Committee on Ways and Means

The U.S. House of Representatives is the larger of two houses composing the U.S. Congress. The other is the U.S. Senate. The House first created a Committee on Ways and Means on July 24, 1789, during its opening session, but it was disbanded after only two months. Albert Gallatin and James Madison worked to reestablish a legislative finance committee to monitor government taxes and spending. From 1795 until 1801, the House reappointed the Committee on Ways and Means to supervise the Fourth through the Sixth Congresses. On January 7, 1802, Congress officially created a permanent Committee on Ways and Means. Originally, it held power over both taxes and spending. A reorganization in 1865 separated the Committee on Ways and Means into three parts, with one new branch becoming the Committee on Banking and Commerce and a second new branch becoming the Committee on Appropriations.

The Committee on Ways and Means retained its control over all taxes and revenue measures collected to pay the debts of the United States. All bills proposing to raise revenue must originate in the House and go through the Committee on Ways and Means. This committee is very important and powerful because it also supervises a number of entitlement (guaranteed benefits to citizens) programs. Six subcommittees—on Trade, Oversight, Health, Social Security, Human Resources, and Select Revenue Measures—operate within the Committee on Ways and Means.

Secretary of the treasury

After Thomas Jefferson was inaugurated as U.S. president in March 1801, Gallatin became the secretary of the treasury. Gallatin was the first secretary of the treasury to submit an annual treasury report to Congress under a law he helped pass that same year. Gallatin worked hard to eliminate the public debt and simplify government. His efforts were complicated by high military expenditures and the purchase of the Louisiana territory in 1803. In what became known as the Louisiana Purchase, the United States bought 800,000 square miles for $15 million, although Congress had authorized only $2 million for a much smaller area. The purchase instantly doubled the size of the United States. Gallatin supported and secured the financing for the Louisiana Purchase and called for some federal support for improving roads into western lands and opening up the means for getting produce to markets. After eight years as one of the most influential figures in Jefferson's Cabinet, Gallatin continued to serve as secretary of the treasury under President Madison.

Despite overwhelming challenges, Gallatin was able to reduce the public debt by over $30 million by 1812. However, the War of 1812 with England again forced the nation to raise taxes and increase government borrowing. When Madison asked Congress for a declaration of war, the national debt was higher than ever. Gallatin was able to convince Congress to raise customs duties to help finance the war. However, he failed in his attempt to obtain a charter for the Bank of the United States. The lack of a national bank made it difficult to raise the necessary loans and left the United States in a weak financial position.

Along with several other peace commissioners, appointed by Madison to end the war with England, Gallatin set sail for Europe in the spring of 1813 while still serving as treasury secretary. He was the senior diplomat in both age and experience. Alexander I (1777–1825), the Russian tsar (national leader), had offered to help the discussions get started. So Gallatin and the other commissioners arrived in St. Petersburg, Russia, to put an end to the war. Great Britain declined to negotiate through the Russians but agreed to talk directly with the U.S. delegates. With Britain agreeing to talk, Gallatin resigned his secretary's position in February 1814 to lead the negotiations for the United States with Britain. The resulting Treaty of Ghent was signed on December 24, 1814. After signing the treaty, Gallatin traveled to Geneva to visit his native land after a thirty-five year absence, and he remained in Europe throughout 1815 in order to assist U.S. minister to England John Quincy Adams (1767–1848) and Speaker of the House Henry Clay (1777–1852; see entry in volume 1) in negotiating a new trade agreement with Great Britain.

Gallatin returned to the United States in 1815, only to have President Madison persuade him to return to Europe as America's ambassador to France. Gallatin served in this capacity until 1823.

Returning home in 1823, the Gallatins settled on the family estate at Friendship Hill. The following year, in 1824, Gallatin agreed to run as the vice presidential candidate on the Democratic-Republican ticket with the current secretary of the treasury, William H. Crawford (1772–1834). However, Crawford fell ill and Gallatin decided it was time to retire and move his family to Baltimore, Maryland. He sold Friendship Hill to a Frenchman whom he had met in Paris. In 1826, Gallatin accepted a one-year appointment from President John Quincy Adams and served as the American ambassador to Great Britain, returning from London in 1827. He and his family then took up permanent residence in New York City.

National integrity

Having a strong interest in education, Gallatin in 1830 helped found New York University. In 1831, at the age of seventy, Gallatin became president of the new National Bank of New York, and in that position, he continued to advocate the nation's financial integrity. Also in 1831, Gallatin published Considerations on the Currency and Banking System of the United States. He remained in the public eye as a leader in the areas of fiscal responsibility and free trade (limited government regulation), constantly warning against speculation (high risk investments) and debt. In 1839, Gallatin stepped down as president of the National Bank, but he continued his writings well into his eighties. Gallatin's opinions were highly respected on a national level and his last pamphlet, Suggestions on the Banks and Currency of the Several United States, was well received. Gallatin also remained active in a variety of intellectual and charitable activities throughout his life.

During his final years, Gallatin served as president of the New York Historical Society. In addition, he pursued a personal interest in Native American languages, culture, and history. He published his findings in A Synopsis of the Indian Tribes within the United States East of the Rocky Mountains, and in the British and Russian Possessions of North America. The positive public reaction to the publication encouraged Gallatin to take a leading role in the creation of the American Ethnological Society in 1842. He became the Society's first president and published several more papers. Gallatin's studies of Native Americans earned him the title of "the father of American ethnology" (the study of cultures).

He also kept an interest in foreign affairs. He opposed the annexation of Texas, and he considered the Mexican American War (1846–48) an act of aggression by the United States. In 1847, toward the end of the Mexican American War, he warned against greed and racism that followed the peace with Mexico among the U.S. settlers moving into the Southwest.

At the age of eighty-seven, Gallatin experienced health problems and became bedridden. His wife Hannah died in May 1849, and the shock of his wife's death weakened Gallatin even further. He moved to his daughter's summer home in Astoria, Long Island, where he died at the age of eighty-eight. He had outlived many of his colleagues from the early days of the American republic.

For More Information

Books

Adams, Henry. The Life of Albert Gallatin. Philadelphia: J. B. Lippincott, 1879. Reprint, New York: Chelsea House, 1983.

Aitken, Thomas. Albert Gallatin: Early America's Swiss-Born Statesman. New York: Vantage Press, 1985.

Balinky, Alexander. Albert Gallatin: Fiscal Theories and Policies. New Brunswick, NJ: Rutgers University Press, 1958.

Stevens, John A. Albert Gallatin. New York: AMS Press, 1972.

Walters, Raymond, Jr. Albert Gallatin: Jeffersonian Financier and Diplomat. New York: Macmillan, 1957.

Web Sites

"Albert Gallatin in Pennsylvania." Pennsylvania Historical and MuseumCommission.http://www.phmc.state.pa.us/ppet/gallatin/page1.asp?secid=31 (accessed on August 13, 2005).

"Committee on Ways and Means, History." U.S. House of Representatives.http://waysandmeans.house.gov/legacy/history.htm (accessed on August 13, 2005).

"History of the Treasury: Secretaries of the Treasury—Albert Gallatin." United States Department of the Treasury.http://www.treas.gov/offices/management/curator/collection (accessed on August 13, 2005).