Chapter XX: Book III: The Treasury. 1801-1813 (7)

The reduction of the public debt was certainly the principal object in bringing me into office, and our success in that respect has been due both to the joint and continued efforts of the several branches of government and to the prosperous situation of the country. I am sensible that the work cannot progress under adverse circumstances. If the United States shall be forced into a state of actual war, all the resources of the country must be called forth to make it efficient, and new loans will undoubtedly be wanted. But whilst peace is preserved the revenue will, at all events, be sufficient to pay the interest and to defray necessary expenses. I do not ask that in the present situation of our foreign relations the debt be reduced, but only that it shall not be increased so long as we are not at war. I do not pretend to step out of my own sphere and to control the internal management of other Departments. But it seems to me that, as Secretary of the Treasury, I may ask that whilst peace continues the aggregate of expenditure of those Departments be kept within bounds, such as will preserve the equilibrium between the national revenue and expenditure without recurrence to loans. I cannot, my dear sir, consent to act the part of a mere financier, to become a contriver of taxes, a dealer of loans, a seeker of resources for the purpose of supporting useless baubles, of increasing the number of idle and dissipated members of the community, of fattening contractors, pursers, and agents, and of introducing in all its ramifications that system of patronage, corruption, and rottenness which you so justly execrate. I thought I owed it to candor and friendship to communicate as I did to Mr. Madison and to yourself my fears of a tendency in that direction, arising from the quarter and causes which I pointed out, and the effect such a result must have on my conduct. I earnestly wish that my apprehensions may have been groundless, and it is a question which facts and particularly the approaching session of Congress will decide. No efforts shall be wanted on my part in support of our old principles. But, whatever the result may be, I never can forget either your eminent services to the United States, nor how much I owe to you for having permitted me to take a subordinate part in your labors.

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Mr. Jefferson's letter was obviously written not merely to encourage Mr. Gallatin, but to be shown to members of Congress. From it one would suppose that Mr. Gallatin had in the moment of departure merely suggested the possibility of his retirement; from Mr. Gallatin's reply, which has no such semi-official reticence, the real import of the conversation, and the fact that it was addressed to Mr. Madison, are made evident.

"Those who thought they had injured were disposed to destroy, and were sufficiently skilful and formidable to effect their object." Mr. Gallatin's life for the next four years was little more than a commentary on this paragraph. There has, perhaps, never in our history been a personal contest more determined, more ferocious, more mischievous than this between Mr. Gallatin, with the Executive behind him, and the knot of his enemies who controlled the Senate; it is not too much to say that to this struggle, complicating itself with the rising spirit of young nationality, we owe the war of 1812, and some of the most imminent perils the nation ever incurred. It was not unlike the great contest of ten years before between John Adams and a similar group of Senators; it went through a similar phase, and in each case the result was dependent on the question of war or peace. There are few more interesting contrasts of character in our history than that between the New England President, with his intense personality and his overpowering bursts of passion, confronting his enemies with a will that could not control or even mask its features, and "the Genevan," as the Aurora called him, calm, reticent, wary, never vehement, full of resource, ignoring enmity, hating strife. Perhaps a combination of two such characters, if they could have been made to work in harmony, might have proved too much even for the Senate; and, if so, a problem in American history might have been solved, for, as it was, the Senate succeeded in overthrowing both.

As Mr. Gallatin had predicted, the mission of Mr. Jackson proved to be merely one more insult, and our government very soon put an end to its relations with him and sent him away; but, in doing so, Mr. Madison expressly declared the undiminished desire of the United States to establish friendly relations with Great Britain, so that the only effect of this episode was to procure one year more of delay; precisely the object which Mr. Canning had in view. As the country now stood, Mr. Canning's policy had been completely successful; he had taken away the neutral commerce of the United States, and the United States had submitted to his will; he had taken away her seamen, and she forced her seamen to go. Just at this moment Mr. Canning himself was thrown out of office; his dictatorial temper met more resistance from his colleagues than from America, and he found himself a private man, with a duel on his hands, at the instant when his administration of foreign affairs was most triumphant. His successor was the Marquess Wellesley, whose reputation for courtesy and liberality was high, and therefore inspired the United States with a hope of justice, for even Mr. Madison, as his letters show, could never quite persuade himself that the British government meant what its acts proclaimed.

The dismissal of Mr. Jackson immediately preceded the meeting of Congress; the interval was hardly sufficient to supply time for elaborating a new policy. The President's message, sent in on the 29th November, 1809, was very non-committal on the subject of further legislation, and only expressed two opinions as to its character; he was confident that it would be worthy of the nation, and that it would be stamped with unanimity. What ground Mr. Madison had for this confidence, nowhere appears; and if he was honest in expressing this as an opinion rather than as a hope, he was very little aware of the condition of Congress; even Mr. Jefferson never was more mistaken.

As usual, the task of creating and carrying through Congress the Executive policy fell upon Mr. Gallatin, and as usual, bowing to the necessities of the situation, he set himself to invent some scheme that would have a chance of uniting a majority in its support and of giving government solid ground to stand upon. The task was more than difficult, it was impossible. Since the war-policy broke down and the embargo was abandoned, no solid ground was left; Mr. Gallatin, however, had this riddle to solve, and his solution was not wanting in ingenuity.

His report, sent in on December 8, 1809, for the first time announced a deficit. "The expenses of government, exclusively of the payments on account of the principal of the debt, have exceeded the actual receipts into the Treasury by a sum of near $1,300,000." This was a part of the price of the embargo. For the next year authority for a loan of $4,000,000 would be required in case the military and naval expenditure were as large as in 1809; if Congress should resolve on a permanent increase in the military and naval establishments, additional duties would be requisite; if not, a continuation of the Mediterranean Fund would be sufficient.

But the essence of the report lay in its last paragraph. "Whatever may be the decision of Congress in other respects, there is a subject which seems to require immediate attention. The provisions adopted for the purpose of carrying into effect the non-intercourse with England and France, particularly as modified by the act of last session, under an expectation that the orders of council of Great Britain had been revoked, are inefficient and altogether inapplicable to existing circumstances. It will be sufficient to observe that exportation by land is not forbidden, and that no bonds being required from vessels ostensibly employed in the coasting-trade, nor any authority vested by law which will justify detention, those vessels daily sail for British ports without any other remedy but the precarious mode of instituting prosecutions against the apparent owners. It is unnecessary and it would be painful to dwell on all the effects of those violations of the laws. But without any allusion to the efficiency or political object of any system, and merely with a view to its execution, it is incumbent to state that from the experience of the last two years a perfect conviction arises that either the system of restriction, partially abandoned, must be reinstated in all its parts and with all the provisions necessary for its strict and complete execution, or that all the restrictions, so far at least as they affect the commerce and navigation of the citizens of the United States, ought to be removed."

[Sidenote: 1810.]

This report, as already said, was sent to Congress on the 8th December, 1809. On the 19th December, Mr. Macon, from the Committee on Foreign Relations, reported a bill which was understood to come from the Treasury Department, and which explained the somewhat obscure suggestion in the last lines of the report. This bill, commonly known as Macon's bill, No. 1, contained twelve sections. The 1st and 2d excluded English and French ships of war from our harbors; the 3d excluded English and French merchant vessels from our harbors; the 4th restricted all importations of English and French goods to vessels owned wholly by United States citizens; the 5th, 6th, 7th, and 8th restricted these importations to such as came directly from England and France; the 9th authorized the President to remove these restrictions whenever either England or France should remove theirs; the 11th repealed the old non-intercourse, and the 12th limited the duration of the act to the 4th March, 1810.

The bill was in short a Navigation Act of the most severe kind, and met the orders in council and the French edicts on their own ground. The Federalists at once pointed out that the measure was a violent one; that it would be immediately met by Great Britain with retaliatory measures, and that the result must amount to a new embargo or to war. To this the supporters of the bill replied that government contemplated such retaliation; that it was intended to throw the burden upon England and compel her to carry it; that Congress had tried an embargo, the principle of which was non-exportation; that it had tried non-intercourse, the principle of which was non-importation; and now, since both these had failed, it must try a navigation law that could only be countervailed by restrictive measures to be carried out by England herself.

The fact soon appeared that this bill was a very difficult one for its opponents to deal with; it did in fact strike out the only policy, short of war, which was likely to bring England to terms, and which, according to Mr. Huskisson's assertion some years later,[99] she has always found herself powerless to meet. The opponents of the bill at once showed their embarrassment in a manner which is always proof of weakness; they adopted in the same breath two contradictory arguments; the bill was too strong, and it was too weak. For the Federalists it was too strong; they wished frankly to take sides with England. For Duane and Leib it was too weak, a mean submission, a futile and disgraceful measure; not that they wished war, for they did not as yet venture to take that ground; not that they suggested any practical measure that would stand a moment's criticism; but that they were decidedly opposed to this special plan. So far as war was concerned, the President was still in advance of Congress, for not only was Macon's bill a stronger measure than the majority relished, but the President was calling upon Congress to fill up the army and the navy, and Mr. Gallatin was steadily pressing for war taxes.

After more than a month of debate, Macon's bill passed the House by 73 to 52, and went up to the Senate, where it was consigned to the tender mercies of General Smith and Mr. Giles. On the motion of General Smith, February 21, 1810, all the clauses except the 1st, 2d, and 12th were struck out by a vote of 16 to 11. The Senate debates are not reported, but General Smith subsequently made a speech on the bill, which he printed, and in which he took the ground that the measure was feeble, and that it was so strong as to justify England in confiscating all our trade. This was the ground also taken by the Aurora. General Smith proposed to arm our merchant vessels and furnish them convoy, a measure over and over again rejected. By a vote of 17 to 15 the Senate ultimately adhered to its amendments and killed the bill, Gallatin's personal enemies deciding the result.

Throughout all this transaction the Secretary of State had acted a curious part. Silent or assenting in the Cabinet, where, notwithstanding rumors to the contrary, there was always apparent cordiality, Mr. Smith's conversation out-of-doors, and especially with opponents of the Administration, was very free in condemnation of the whole policy which he officially represented.[100] No one, indeed, either in or out of the Cabinet, pretended an enthusiastic admiration of Macon's bill; Mr. Madison, Mr. Gallatin, Mr. Macon himself, only regarded it as "better than nothing," and "nothing" was the alternative. Congress had put the country into a position equally humiliating, ridiculous, and unprofitable; it had for two sessions refused to follow the Administration and had refused to impose any policy of its own. The influence of General Smith, solitary and unsupported except by Leib and the Aurora faction, now barred the path of legislation and held Congress down to its contemptible and crouching attitude of impotent gesticulation and rant. The Secretary of State was a party to his brother's acts, and although too dull a man to have any distinct scheme of his own or any depth of intrigue; although obliged to let the President write his official papers and Mr. Gallatin control both his foreign and his domestic policy, he nevertheless used the liberty thus obtained to talk with unreserved freedom both to Federalists and discontented Republicans about the characters of his associates and the contents of his despatches.

Thus the policy of a Navigation Act was defeated, and another year was lost. Only at the very close of the session, when it became apparent that something must be done, Mr. Macon got his bill No. 2 before the House. This was on April 7, and on the 10th he wrote to Nicholson: "I am at a loss to guess what we shall do on the subject of foreign relations. The bill in the enclosed paper, called Macon's No. 2, is not really Macon's, though he reports it as chairman. It is in truth Taylor's. This I only mention to you because when it comes to be debated I shall not act the part of a father but of a step-father." After a violent struggle between the two Houses, a bill was at length passed, on May 1, 1810, which has strong claims to be considered the most disgraceful act on the American statute-book. It surrendered all resistance to the British and French orders and edicts; it repealed the non-importation law; it left our shipping unprotected to the operation of foreign municipal laws; it offered not even a protest against violence and robbery such as few powerful nations had ever endured except at the edge of the sword; and its only proposition towards these two foreign nations, each of which had exhausted upon us every form of insult and robbery, was an offer that if either would repeal its edicts, the United States would prohibit trade with the other.

The imagination can scarcely conceive of any act more undignified, more cowardly, or, as it proved, more mischievous; but in the utter paralysis into which these party quarrels had now brought Congress, this was all the legislation that could be got, although, in justice to Congress, it is but fair to add that even this was universally contemned. The Administration had nothing to do but to execute it, and to make what it could of the policy it established.

In the contest upon Macon's bill, Mr. Gallatin had the President's full support and co-operation. But in another and to him a much more serious struggle he stood quite alone, and all he could obtain from the President was that the Executive influence should not be thrown against him. The charter of the United States Bank was about to expire. In the present condition of the country, with war always in prospect and public and private finances seriously disordered, the bank was an institution almost if not quite indispensable to the Treasury. To abolish it was to create artificially and unnecessarily a very serious financial embarrassment at the moment when the national existence might turn on financial steadiness. To create a new system that would answer the same purposes would be the work of years, and would require the most careful experiments. The subject had been referred to Mr. Gallatin by the Senate, and he had at the close of the last session sent in a report representing in strong language the advantages derived from the bank. He now drew up a bill by which the existing charter was to be considerably modified; the capital raised to thirty millions, three-fifths of which was to be lent to the government; branch banks to be established in each State, and half the directors appointed by the State; with various other provisions intended to secure the utmost possible advantage to the government. Parties at once divided on this question as on the foreign intercourse question, but with a change of sides. The Federalists favored, the old Republicans resisted, the bank, and General Smith resisted Mr. Gallatin. During this session, however, little more was done than to introduce the bills; the matter was then thrown aside until next year.

These subjects, and a hasty report on domestic manufactures, occupied the session almost exclusively, so far as Mr. Gallatin was concerned. When Congress rose, on the 1st May, 1810, every one was obliged to concede that a more futile session had never been held, and the Aurora fulminated against Mr. Gallatin as the cause of all its shortcomings. More and more the different elements of personal discontent made common cause against the Secretary of the Treasury, and before the end of the year 1810 the Aurora and its allies opened a determined assault upon him with the avowed intention of driving him from office.

It was in reference to these attacks, which incessantly recurred to the old stories of 1806, that Mr. Jefferson wrote to Mr. Gallatin as follows:

JEFFERSON TO GALLATIN.

16 August, 1810.

I have seen with infinite grief the set which is made at you in the public papers, and with the more as my name has been so much used in it. I hope we both know one another too well to receive impression from circumstances of this kind. A twelve years' intimate and friendly intercourse must be better evidence to each of the dispositions of the other than the letters of foreign ministers to their courts, or tortured inferences from facts true or false. I have too thorough a conviction of your cordial good-will towards me, and too strong a sense of the faithful and able assistance I received from you, to relinquish them on any evidence but of my own senses. With entire confidence in your assurance of these truths I shall add those only of my constant affection and high respect.

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"The letters of foreign ministers to their courts" were Mr. Erskine's despatches of December, 1808, to Mr. Canning, which had been printed in England, and, on reaching America, compelled Mr. Gallatin very reluctantly to make a public denial of their accuracy.[101] They represented Mr. Gallatin as acquiescing in the belief that Mr. Jefferson was under French influence. Mr. Gallatin, with the aid of Mr. Madison, drew up a paper correcting Mr. Erskine's errors, and of course stimulating the attacks of the Aurora. To Mr. Jefferson's letter Gallatin replied:

GALLATIN TO JEFFERSON.

10th September, 1810.

I need not say how much shocked I was by Mr. Erskine's despatch. However reluctant to a newspaper publication and to a denial on matters of fact, I could not permit my name to be ever hereafter quoted in support of the vile charges of foreign partialities ascribed to you, and I knew that in that respect my disavowal would be decisive, for, if my testimony was believed, they did not exist, and if disbelieved, no faith could be placed in whatever I might be supposed to have said to Erskine. Although I never for a moment supposed that either his letter or any newspaper attack could, after so long and intimate acquaintance, create a doubt in your mind of the sincerity and warmth of my sentiments towards you, or alter your friendship for me, the assurance was highly acceptable and gratefully received. The newspaper publications to which you allude, I have heard of, but not seen, having not received the papers south of this place [New York] during my stay here. But I had anticipated that from various quarters a combined and malignant attack would be made whenever a favorable opportunity offered itself. Of the true causes and real authors I will say nothing. And however painful the circumstance and injurious the effect, the esteem of those who know me and the consciousness of having exclusively devoted my faculties to the public good, and of having severely performed public duties without regard to personal consequences, will, I hope, support me against evils for which there is no other remedy. Yet that a diminution of public confidence should lessen my usefulness will be a subject of deep regret.

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Meanwhile, the situation of affairs abroad was more and more becoming the measure of American politics, and the question of war or peace was more and more clearly defined as the turning-point of Mr. Gallatin's life. The exhaustion of the Treasury was alone, for him, a sufficient argument against war. He began to believe, and he was right in believing, that the worst had now passed; that, as America could hardly suffer more humiliation than she had already borne, her objects could perhaps be attained by peaceful methods; and almost mechanically, as the government became impressed with this conviction, the opposition, so far as it was personal, tended to the opposite side, and advocated war. There was no other ground to stand upon, unless they went frankly over to the Federalists, which was rapidly becoming inevitable if they continued their old tactics.

Curiously enough, the feeble and disgraceful law of May 1, 1810, known as Macon's law, had a more immediate effect on the situation abroad than any of the stronger measures which had been tried. Ever since the repeal of the embargo on March 4, 1809, England had been the favored nation; our people, in fact, gave her our commerce on her own terms, and were glad to do so. Macon's law did away with even the pretence of resistance to her authority on the ocean. Disgraceful as such a result doubtless was to the honor and dignity of the United States, it was in its effects on France a very vigorous engine, for it was nothing more nor less than taking active part with England against her; and inasmuch as Bonaparte had within his limited range shown, if possible, somewhat more disposition to rob us, and a still greater latitude of personal insult, than had been displayed even by Mr. Canning, this result might fairly be viewed with indifference, or perhaps with some slight satisfaction, by the people of the United States. Upon the Emperor it acted, as with a man of his temper was not unnatural, in a most decided manner; he was furious; he seized all the American property he could get within his clutches; he stormed at the American minister, and heaped outrage upon insult; but the fatal arrow could not be shaken out; random as the shot had been, it struck a vital spot, and Bonaparte had to submit. The change which he was thus forced to make illustrates his character.

When the Act of May 1, 1810, commonly known as Macon's Act, reached Paris, General Armstrong communicated it inofficially to the minister of foreign affairs, Champagny, Duke de Cadore, who laid it before the Emperor. According to all ordinary theories, the Act of May 1, by which the non-intercourse was repealed, would work against France and against France alone; by it America abandoned even the pretence of resisting the absolute domination of England on the seas, and accepted whatever commercial law she chose to impose. The Emperor, moreover, had no means of counteracting or punishing it. He had already resorted to the strongest measure at his command, and seized all the American vessels he could lay his hands on. These were now waiting condemnation. The next step was war, which would, of course, operate only to the advantage of England. For once Bonaparte was obliged to retrace his steps, or at least affect to do so.

On the 5th August, therefore, the Duke de Cadore wrote to General Armstrong a letter, in which, with the usual effrontery of the imperial government, he took the ground that the Act of May 1 was a concession to France, and that France recognized its obligations. "The Emperor loves the Americans;" the Emperor revoked his decrees of Berlin and Milan, which, after the 1st November next, would cease to have effect, it being understood that, in consequence of this declaration, the English should revoke their orders in council and renounce their new principles of blockade, or that America should carry out the terms of the Act and cause her rights to be respected.

This letter was curious in many ways, but it is to be observed more particularly that while Macon's law required either belligerent to "so revoke or modify her edicts as that they shall cease to violate the neutral commerce of the United States," the Emperor as a matter of fact revoked only the Berlin and Milan decrees, and said nothing of others still more offensive, especially the Rambouillet decree, then only four months old, under which he now held and meant to continue holding possession of all the American property in France,--a decree unknown to Congress when the law of May 1 was passed.

Then came the Emperor's master-stroke, which was to punish the Americans for blundering into success. Long unknown to our government, it was only revealed by accident to Mr. Gallatin when minister to France in 1821, after Napoleon and his decrees had been forgotten by all but the unhappy merchants whom he had plundered. At that time the Duke de Bassano, Napoleon's Minister of State, had been allowed by the government of Louis XVIII. to return to Paris. He had preserved a register of the various acts and decrees of Napoleon, and was more intimate with their nature and bearing than any one even in the government of that time. To him the claimants sometimes applied for copies of documents to support their memorials, and he furnished them. On one occasion they sought the text of an order by which the proceeds of certain cargoes sequestered at Antwerp were transferred to the Treasury. The Duke furnished what he supposed to be the paper, and it was brought to Mr. Gallatin. The following extract from his despatch of 15th September, 1821, to the Department of State explains what this paper was, and what his sensations were in regard to it.

"The enclosed copy of a decree dated at Trianon on the 5th of August, 1810, which has never been published nor, to my knowledge, communicated to our ministers or government, was obtained through a private channel.... It bears date the same day on which it was officially communicated to our minister that the Berlin and Milan decrees would be revoked on the first day of the ensuing November, and no one can suppose that if it had been communicated or published at the same time, the United States would, with respect to the promised revocation of the Berlin and Milan decrees, have taken that ground which ultimately led to the war with Great Britain. It is indeed unnecessary to comment on such a glaring act of combined injustice, bad faith, and meanness, as the enactment and concealment of that decree exhibits."

The text of this decree which proved how "His Majesty loves the Americans. Their prosperity and their commerce are within the scope of his policy;" and which was written with the same pen on the same day as that celebrated declaration of Napoleonic affection,--the full text of this decree may be seen attached to Mr. Gallatin's despatch.[102] Under the pretext of reprisals for American confiscations which had never in fact been made,[103] it confiscated into the imperial treasury, without trial or delay, all American property in France, both that which had been already sequestered and sold, subject to final judgment, and that which was still in the form of merchandise or ships brought into France previous to the 1st May, 1810, the date of Macon's Act. And it further provided that until November 1, when the Berlin and Milan decrees were to be conditionally revoked, American ships should be allowed to enter French ports, but not to unload, and presumably not to depart, without a permission from the Emperor.

When Mr. Gallatin, at sixty years of age, used language so strong as that just quoted and characterized an act as one of combined injustice, bad faith, and meanness, the world may very reasonably conclude that he was unusually moved. On another occasion he called it "a mean and perfidious act." There was good reason why he should have been deeply exasperated at the discovery, for of that meanness and perfidy he was principal victim.

What share Mr. Gallatin now had in deciding the action of the President is unknown. In the absence of evidence to the contrary it is to be presumed that he at least acquiesced in the decision of the Cabinet, yet not only is it clear that the letter of Champagny of August 5 was not a compliance with the terms of Macon's Act; did not revoke or modify Napoleon's edicts so as that "they shall cease to violate the neutral commerce of the United States," and, therefore, that the President had no legal power to act as though it did; but it is clear, from Secretary Smith's letter on the subject to General Armstrong, dated November 2, 1810, that the President was aware of the fact and escaped it only by strange subterfuge. Already on the 5th July Mr. Smith had instructed General Armstrong that "a satisfactory provision for restoring the property lately surprised and seized by the order or at the instance of the French government must be combined with a repeal of the French edicts, with a view to a non-intercourse with Great Britain, such a provision Union being _an indispensable evidence_ of the just purpose of France toward the United States." Yet, on the 2d November, writing to General Armstrong that the President had issued his proclamation against England on the strength of the French revocation of the Berlin and Milan decrees alone, Mr. Smith could only justify this evident abandonment of his former and correct ground by adding: "You will, however, let the French government understand that this has been done _on the ground_ that the repeal of these decrees does involve an extinguishment of all the edicts of of France actually violating our neutral rights.... It is to be remarked, moreover, that in issuing the Proclamation _it has been presumed_ that the requisition contained in that letter [of July 5], on the subject of the sequestered property, will have been satisfied;" and the writer goes on to show on what evidence this presumption rested.

That is to say, President Madison did an act which he recognized as one of doubtful propriety, on the ground of two assumptions of fact, neither of which had the smallest foundation. These objections and criticisms were made at the time, and they were semi-officially answered by Joel Barlow in the National Intelligencer of July 9, 1811, by drawing a distinction between "belligerent maritime edicts violating our neutral rights, and edicts authorizing other depredations on the property of our citizens." The Berlin and Milan decrees, it appears, were maritime; the Rambouillet decree was municipal, not a violation of our neutral rights contemplated by Macon's Act. Similar British depredations had been disregarded in accepting Erskine's arrangement.

If this were the case in November, Mr. Madison would have done better not to have said in July that a revocation of the Rambouillet decree was an _indispensable_ evidence of the Emperor's intentions, and also that he assumed, on the part of the French government, an extinguishment of all its edicts and a restoration of the sequestered property as the ground of his proclamation. Moreover, if this were the case, it is not quite plain why Mr. Gallatin should have declared in 1821 that a knowledge of the secret Trianon decree would have prevented Mr. Madison from issuing that proclamation. The Trianon decree was merely the authority for acts which were notorious.

Although there is not a shadow of evidence to show what Mr. Gallatin's opinions on this question were, yet the result of the decision was so important in its ultimate bearings upon his fortune that the subject could not be left unmentioned. In Mr. Madison's private letters of this time there is a disposition clearly evident to subordinate all other considerations to the object of bringing England to terms, and this doubtless was the tendency of public feeling. Acting on this principle, the Administration decided that Champagny's announcement of the intended revocation of the Berlin and Milan decrees was a sufficient fulfilment of the terms of Macon's Act, and accordingly, on the 1st November, issued the proclamation to that effect. Simultaneously Mr. Gallatin issued a circular to the collectors announcing that after the 2d February, 1811, all intercourse with Great Britain and her dependencies would cease.

In this there was nothing unfair to England. Napoleon had in appearance been compelled to give way, and the United States had a perfect right to make the most of her success. If in doing so she submitted to more robbery, this was no more than she had done when she had attempted similar arrangements with England; it was less than she had done every day for nearly twenty years, in submitting to the impressments of her seamen for the benefit of the British navy. Nevertheless, the ground on which she stood was very weak as regarded argument, for there could be no reasonable doubt then, any more than there was ten years later, that Bonaparte had acted a "mean and perfidious" part, and yet she called upon England to act as though it were an honest one. England rightly enough replied that Napoleon was attempting another fraud to which England would not be a party; thus the situation was rendered more critical than ever, and Napoleon, by a course of conduct which was precisely what Mr. Gallatin described it in 1821, plunged the United States into a war with England on ground that, so far as France was concerned, would not bear examination.

[Sidenote: 1811.]

Though there is reason to regret that Mr. Madison should have made himself so eagerly the dupe of Napoleon, and though there seems to be something surprising in the irritation of Mr. Gallatin on discovering only one among the many instruments of the Emperor's duplicity, the good faith of the American government cannot fairly be called in question. The situation of the United States as regarded England was intolerable, and Mr. Madison snatched at any fair expedient to escape it. England alleged that the Berlin and Milan decrees were the cause of her orders in council. The United States, by a lucky stroke of legislation, compelled Napoleon to promise revocation of those decrees on a certain day, and then turned that promise against England. England refused belief in it, which was reasonable enough, but in reality had those decrees been the only cause of the orders in council, the alleged revocation would have afforded ample excuse for England's concession. On both sides the diplomatic veil was transparent. Napoleon, in fact, had not revoked his decrees, as he unblushingly avowed within the next year, while England cared nothing for those decrees, except so far as they were mere municipal regulations; so far as they violated international law on the ocean they were, indeed, quite ineffective. England's real object was to maintain her clutch on American shipping and sailors.

Such was the situation of affairs when Congress met on the 3d December, 1810. One more step had been taken, but no man could certainly say whether it was towards a solution. Meanwhile, Mr. Gallatin was burdened with an undertaking that plunged him deeper into the miserable complications of political warfare, disorganizing his followers and his friends, stimulating personal hostilities, and yet leaving him no choice of action. The question of the bank charter was to be decided this winter before the Congress expired on the 4th March, 1811. As a matter of public welfare, more especially in the situation the country now occupied, Mr. Gallatin was obliged to do his utmost to prevent the destruction of the bank. It was no mere matter of party or of personal feeling; the bank at that moment was essential to public safety; to lose it might be a question of national life.

Every argument which Mr. Gallatin could use was put to the service of the bill. He was its open and earnest advocate both in his special reports and in his conversation, yet even the malignity of the Aurora and the less bitter but perhaps more dangerous hostility of the Richmond Enquirer failed to find in them a single expression that could be made to rouse personal irritation or popular feeling. He conducted his case with all his usual temper, tact, and persistence; it is due also to his opponents in Congress to say that they avoided personal attacks upon him, at least for the most part, and left vituperation to the press. Not the less, however, was it distinctly understood that the bank was the test of Mr. Gallatin's power; that its overthrow was one and the most important step towards driving him from office; and that nothing less than the overshadowing growth of his influence could possibly make the continued existence of the bank even a subject of discussion in the Republican party.

The debate in the House was long and able, but when a vote was reached on January 24, 1811, the numbers stood 65 to 64 in favor of indefinite postponements. Many of Mr. Gallatin's best friends voted with the majority; the Federalists in a mass voted on his side; his personal enemies turned the scale. Whatever Mr. Gallatin's feelings were at this defeat, he made no display of them even to his intimates. On the 28th January, Mr. Macon wrote to Judge Nicholson: "I was at Gallatin's yesterday; all well. He is, I fear, rather mortified at the indefinite postponement of the bill to renew the charter of the Bank of the United States. I am really sorry that my best judgment compelled me on that question to vote agreeable to what I believe to be the anxious wish of the invisibles. Mr. Madison was at the last session, I am informed, in favor of the renewal; that he considered it, according as my informant gave his words, _res adjudicata_. What cause has produced the change in his mind I have not heard. I have also been told that Mr. Giles was of the same opinion then and that he also has changed. These are natural rights, and ought to be exercised whenever the mind is convinced that opinions are founded in error; but when great men, or rather men in high, responsible stations, change their deliberate opinions it seems to me that they in some way or other ought to give the reason of the change. I incline to think that Mr. Madison's opinion last winter had a good deal of weight, and it is presumed it may have been the means of inducing a few members to take pretty strong hold of the constitutional side of the question. Now that he has changed, they are thrown with Gallatin on the Federal side of the question. I also incline to think that his present opinion has had some weight in the late decision."

Mr. Macon was probably mistaken in thinking that the President had changed his position; the letter is curious as showing what confusion Mr. Madison's course created, but the story itself was apparently a mere rumor set afloat by the enemies of the bank, those "invisibles," as the Smith faction were significantly called by Mr. Macon and his friends, and whose alliance with the Aurora was now complete. A few days later, on the 9th February, Mr. Macon wrote: "It seems to me not very improbable that Mr. Madison's Administration may end something like Mr. Adams's. He may endeavor to go on with the government with men in whom he has not perfect confidence, until they break him down, and then, as John did, turn them out after he has suffered all that they can do to injure him. It is true, if he means ever to turn out, he has now delayed it almost too long, because the senatorial elections are over, while these people retained their influence, if they can be said to have a fixed influence in the nation."

Meanwhile the debate on the bank charter had begun in the Senate, and a curious debate it was. Mr. William H. Crawford, of Georgia, appeared as Mr. Gallatin's champion, and supported the charter with such energy, courage, and ability as earned Mr. Gallatin's lasting gratitude, and made Mr. Crawford the representative of the Administration in the Senate, and the favorite candidate of the Jeffersonian triumvirate for succession to the Presidency. Mr. Giles, on the other hand, spoke judicially. The Legislature of Virginia, like the Legislatures of Pennsylvania and Kentucky, had instructed their Senators to vote against the charter. Mr. Giles declared himself a representative of the people of the United States, not a mere agent of the Virginia Legislature, and his speech was an elaborate effort at candid investigation, unaffected, as he averred, by his personal sentiments towards the Secretary of the Treasury. But he, too, at last concluded that the bank was a British institution, which had not prevented the orders in council or the attack on the Chesapeake, and therefore should be suppressed. He admitted that the time was inauspicious for putting an end to the establishment, but the danger from British influence was greater than the danger from financial confusion. Henry Clay, the young Senator from Kentucky, followed and ridiculed the ponderous Mr. Giles, who had "certainly demonstrated to the satisfaction of all who heard him, both that it was constitutional and unconstitutional, highly proper and improper, to prolong the charter of the bank." Mr. Clay was not disposed to enlist with Mr. Giles in factious opposition to the government, but he was still less disposed to join Mr. Crawford in its support; he hotly denied the constitutionality of the charter, and, like Mr. Giles, he declared that the bank was responsible for not preventing impressments and orders in council. Then General Smith, in a speech covering two days, proved that the whole theory of the usefulness of a national bank was a delusion; that State institutions were better depositaries of the public money; that the Secretary of the Treasury was quite mistaken in all his statements about the convenience of the bank, even in regard to remittances, and knew nothing about foreign exchange; that no possible trouble could arise from abolishing the bank; and that the constitutional objection was final.

On the 20th February, 1811, the Senate reached a vote. It was 17 to 17, and the Vice-President, George Clinton, whose personal hostility to the President was notorious, decided the question in the negative. Among the votes which then settled the fate of the bank, and incidentally the fate of Mr. Gallatin, were those of Joseph Anderson, of Tennessee, Henry Clay, of Kentucky, William B. Giles, of Virginia, Michael Leib, of Pennsylvania, and Samuel Smith, of Maryland. Readers who are curious in matters of biography will naturally ask how the opinions of these men stood the test of time. Less than four years later, after Mr. Gallatin had been fairly driven from the Treasury, his most intimate friend, Alexander J. Dallas, was called to fill the place. Government was bankrupt, the currency in frightful disorder, and loans impracticable. Mr. Dallas, as his last resource, insisted upon a bank, and he got it. Michael Leib was then no longer in the Senate; his political career had come to an untimely end. Gideon Granger, Postmaster-General, and one of the factious number, had exhausted President Madison's patience by appointing Leib postmaster at Philadelphia, and had lost his office in consequence; Leib was removed, and disappeared into political obscurity. Giles was consistent in opposing the bank, and in 1816, so soon as his senatorial term expired, he too subsided into obscurity, from which he only rescued himself by his success in using the same tactics against John Quincy Adams that he had used against Albert Gallatin. Anderson, Clay, and Smith have left their names recorded among the supporters of the new charter.

Thus, in the face of difficulties and dangers such as might well have appalled the wisest head and the stoutest heart, the Legislature deprived the Executive of the only efficient financial agent it had ever had. What the financial consequences of destroying the bank actually were will be seen presently; it is enough to say that Congress acted in this instance with a degree of factious incompetence that cost the nation infinite loss and trouble, and was not far from imperilling its existence. No one knew better than Mr. Giles, General Smith, and George Clinton that whatever the objections to a bank might be, this was no time to destroy it, and even Henry Clay, with all his youthful self-confidence, had intelligence enough to make him inexcusable in refusing to prolong, if only for a very few years, the existence of an agent which the Treasury considered indispensable, in the face of a war which he was, against the will of the Administration, forcing upon its hands.

John Randolph was one of those who saw most clearly through the intrigues that beset the government. Never strong in common sense, Randolph's mind was yielding more and more to those aberrations which marked his later years. Though all intimacy of relation between the two men had long ceased, Randolph had yet preserved as much respect for Gallatin as his universal misanthropy permitted, while at the same time his contempt for "the invisibles" was unbounded. Whatever mistakes Randolph made, he at least never descended so low as to make the Aurora his ally. On the 14th February he wrote to Judge Nicholson: "Giles made this morning the most unintelligible speech on the subject of the Bank of the United States that I ever heard. He spoke upwards of two hours; seemed never to understand himself (except upon one commonplace topic of British influence), and consequently excited in his hearers no other sentiment but pity or disgust. But I shall not be surprised to see him puffed in all the newspapers of a certain faction. The Senate have rejected the nomination of Alex. Wolcott to the bench of the Supreme Court--24 to 9. The President is said to have felt great mortification at this result. The truth seems to be that he is President _de jure_ only. Who exercises the office _de facto_ I know not, but it seems agreed on all hands that 'there is something behind the throne greater than the throne itself.' I cannot help differing with you respecting [Gallatins]'s resignation. If his principal will not support him by his influence against the cabal _in the ministry itself_, as well as out of it, a sense of self-respect, it would seem to me, ought to impel him to retire from a situation where, with a tremendous responsibility, he is utterly destitute of power. Our Cabinet presents a novel spectacle in the political world; divided against itself, and the most deadly animosity raging between its principal members, what can come of it but confusion, mischief, and ruin? Macon is quite out of heart. I am almost indifferent to any possible result. Is this wisdom or apathy? I fear the latter."

A few hours later he added: "Since I wrote to you to-night, Stanford has shown me the last Aurora,--a paper that I never read, but I could not refrain, at his instance, from casting my eyes over some paragraphs relating to the Secretary of the Treasury. Surely, under such circumstances, Mr. G. can no longer hesitate how to act. It appears to me that only one course is left to him,--to go immediately to the P., and to demand either the dismissal of Mr. [Smith] or his own. No man can doubt by whom this machinery is put in motion. There is no longer room to feign ignorance or to temporize. It is unnecessary to say to you that I am not through you addressing myself to another. My knowledge of the interest which you take not merely in the welfare of Mr. G., but in that of the State, induces me to express myself to you on this subject. I wish you would come up here. There are more things in this world of intrigue than you wot of, and I should like to commune with you upon some of them."

Again, on February 17, Randolph wrote: "I am not convinced by your representations respecting [Gallatin], although they are not without weight. Surely it would not be difficult to point out to the President the impossibility of conducting the affairs of the government with such a counteraction in the very Cabinet itself, without assuming anything like a disposition to dictate. Things as they are cannot go on much longer. The Administration are now in fact aground at the pitch of high tide, and a spring tide too. Nothing, then, remains but to lighten the ship, which a dead calm has hitherto kept from going to pieces. If the cabal succeed in their present projects, and I see nothing but promptitude and decision that can prevent it, the nation is undone. The state of affairs for some time past has been highly favorable to their views, which at this moment are more flattering than ever. I am satisfied that Mr. G., by a timely resistance to their schemes, might have defeated them and rendered the whole cabal as impotent as nature would seem to have intended them to be, for in point of ability (capacity for intrigue excepted) they are utterly contemptible and insignificant."

Randolph did not know that even as early as the autumn of 1809 Mr. Gallatin had strained his influence to the utmost to offer "timely resistance to their schemes;" and even Randolph, on reflection, doubted "whether Madison will be able to meet the shock of the Aurora, Whig, Enquirer, Boston Patriot, &c., &c.; and it is highly probable that, beaten in detail by the superior activity and vigor of the Smiths, he may sink ultimately into their arms, and unquestionably will, in that case, receive the law from them."