Chapter XXII: Book III: The Treasury. 1801-1813 (9)

The papers of Mr. Gallatin, like those of Mr. Madison and Mr. Monroe, are quite silent upon this subject. On the other hand, the papers of Timothy Pickering supply at least the authority on which the charge was made. The two following letters tell their own story, and, although they affect Mr. Gallatin's reputation only indirectly, they have a considerable negative value even for him.

TIMOTHY PICKERING TO ABRAHAM SHEPHERD.

CITY OF WASHINGTON, February 12, 1814.

DEAR SIR,--At the last autumn session, Mr. Hanson, noticing the manner in which the war was produced, in addressing Clay, the Speaker, spoke to this effect: "_You know, sir_, that the President was coerced into the measure; that a committee called upon him and told him that if he did not recommend a declaration of war, he would lose his election. And then he sent his message recommending the declaration."

Now, my dear sir, I learn from Mr. Hanson that Colonel Thomas Worthington, Senator, on his way home to Ohio, gave you the above information, and mentioned the names of Henry Clay, Felix Grundy, and some other or others who composed the committee. This is a very important fact, and I pray you will do me the favor to recollect and state to me all the information you possess on the subject; at what time and from whom you received it.

ABRAHAM SHEPHERD TO TIMOTHY PICKERING.

Near SHEPHERDSTOWN, February 20, 1814.

DEAR SIR,--I received your favor of the 12th instant, and observed the contents. Some time in the beginning of April, 1812, General Worthington came to my house from the city to see Mrs. Worthington and children set out for Ohio; he continued part of two days at my house, within which time we had considerable conversation on the prospect of war. He insisted war was inevitable. I condemned the folly and madness of such a measure. He then told me that Mr. Bayard would first be sent to England to make one effort more to prevent the war; that Mr. Madison had consented to do so; and that Mr. Bayard had agreed to go; that he had used every means in his power with some more of the moderate men of their party to effect this object, and that he had frequent conversations with Mr. Madison and Bayard on this subject before it was effected, and that I might rely upon it that such measures would be adopted. He left my house and returned to the city. After the declaration of war and rising of Congress, General Worthington, on his way home to the State of Ohio, called at my house and stayed a night. I then asked him what had prevented the President from carrying into effect this intended mission to England, and observed I was very sorry it had not been put in execution. He answered he was as sorry as I possibly could be, and that he had never met with any occurrence in his life that had mortified him so much. He said as soon as he returned to the city from my house he was informed of what had taken place by a set of hot-headed, violent men, and he immediately waited on Mr. Madison to know the cause. Mr. Madison told him that his friends had waited upon him and said, if he did send Mr. Bayard to England they would forsake him and be opposed to him, and he was compelled to comply, or bound to comply, with their wishes. I then asked General Worthington who those hot-headed, violent men were. He said Mr. Clay was the principal. I cannot positively say, but think Grundy was mentioned with Clay.

I clearly understood that Clay and Grundy were two of the number that waited on the President. I did not ask him how he got his information. As I understood the business, a caucus was held and Mr. Clay and others appointed, and waited on the President in the absence of Worthington, which will ascertain when this business took place.

* * * * *

Mr. Pickering seems to have thought that this explanation hardly supported the charge, and he discreetly allowed the subject to drop. So far, indeed, as the original charge was concerned, the letter of Mr. Shepherd entirely disposed of it, and proved that Mr. Hanson and Mr. Pickering had no authority for asserting that the President was coerced into sending the message of June 1, or that this message was the price of his re-nomination. On the other hand, Mr. Shepherd's statement raises a new charge against Mr. Madison. In his letter of 24th April, 1812, to Mr. Jefferson, the President said: "You will have noticed that the embargo, as recommended to Congress, was limited to sixty days. Its extension to ninety proceeded from the united votes of those who wished to make it a negotiating instead of a war measure," &c., &c. Of these Senator Worthington was doubtless one, for the substitution of "90" for "60" was made by the Senate on April 3, on motion of Dr. Leib, and Worthington voted for it. There was, then, a party in Congress which wished to use the embargo as a weapon of negotiation. It is not improbable that this party may have wished Mr. Madison to send a special mission to England, and that they may have pressed Mr. Bayard for the place. It is possible that Clay and his friends may have told Mr. Madison that in such a step he must not expect their support. This is all that can be now affirmed in regard to the celebrated charge that Mr. Madison made war in order to obtain a re-election.

Mr. Madison's Administration wanted energy and force. No one who is at all familiar with the private history of this party can escape the confession that the President commanded personal love and esteem in a far higher degree than obedience. Whether Senator Worthington counted Mr. Madison and Mr. Gallatin among the active supporters of his proposed peace mission does not appear, nor is there any clue to the other friends of that policy; but there can be little doubt that this was merely one of many suggestions with which the remnant of the old Jeffersonian democracy struggled in a helpless way to stem the current of the times. Mr. Gallatin's ears were wearied with the complaints and remonstrances of his friends, the Macons, the Worthingtons, the Dallases, the Nicholsons; and the strident tones of John Randolph echoed their complaints to the public. The President heard, but, both by temperament and conviction, followed the path which seemed nearest the general popular movement, without a serious effort to direct it or to provide for its consequences. Even Mr. Worthington believed war to be inevitable. Yet had they known that only the utter disorganization of the British government now prevented a repeal of the orders in council; had there been an American minister in London capable of seeing through the outer shell of politics and of measuring the force of social movements, war might even yet have been avoided. Nay, had Mr. Madison thrown himself at this decisive moment into the arms of the peace party; had he, on the 1st April, 1812, sent to the Senate, together with his embargo message, the nominations of Mr. Bayard and Mr. Monroe or Mr. Gallatin as special commissioners to England, the war could hardly have happened, for the commissioners would have found the orders in council revoked before negotiations could have been seriously begun.

This, however, Mr. Madison did not know, and, perhaps, even had he known it, the fate of John Adams might have seemed to his gentler spirit a warning not to thwart a party policy. His action was founded on the official utterances of the British government and the temper of our own people; it was perfectly consistent from beginning to end, and there was no disagreement in the Cabinet on the subject. It is true that until Congress met he was in doubt what course was best to pursue; his message did not directly recommend war; but from the moment Congress assembled and showed a disposition to support the national dignity, Mr. Madison and his Cabinet accepted the situation and needed no outside compulsion. To use his own words, as written down by a celebrated visitor in the year 1836, "he knew the unprepared state of the country, but he esteemed it necessary to throw forward the flag of the country, sure that the people would press onward and defend it."[113] He had been ready to do this in the winter of 1808-09. He had urged measures almost equivalent to war in every following session, so far as Congress would allow him to do so. He had wished to maintain peace, but he had been quite aware that government must have the moral courage to resist outrage, as a condition of maintaining peace. It is not to be denied that his party was far behind him, and that, as a consequence, the whole foreign policy from February, 1809, to June, 1812, was one long series of blunders and misfortunes. France made a dupe of him and betrayed him into a diplomatic position which was, as regarded England, untenable. To use his own words in a letter to Joel Barlow, his minister at Paris, dated August 11, 1812: "The conduct of the French government ... will be an everlasting reproach to it.... In the event of a pacification with Great Britain, the full tide of indignation with which the public mind here is boiling, will be directed against France, if not obviated by a due reparation of her wrongs. War will be called for by the nation almost _una voce_." But the diplomatic mistake did not affect the essential merits of the case, and the factiousness of Congress merely prevented the possibility of a peaceable solution. Neither the one nor the other offers the smallest evidence of inconsistency in Mr. Madison or in his Cabinet. Even Mr. Gallatin, to whose success peace was essential, had never wished and did not now wish to obtain it by deprecating war.

The real trouble which weighed upon the mind of Mr. Gallatin was not the war; he accepted this as inevitable. His difficulty was that the government wanted the faculties necessary for carrying on a war with success, and that Mr. Madison was not the person to supply, by his own energy and will, the deficiencies of the system. Mr. Gallatin knew, what was known to every member of Congress and every newspaper editor in the land, that both the Navy and Army Departments were wholly unequal to the war. With regard to the navy, this was of the less consequence, because the subordinate material was excellent, and our naval officers were sure to supply the lack of energy in their official head; yet even here the mere fact that Governor Hamilton wanted the qualities necessary to a Secretary of the Navy in war times diminished the confidence of the public and the vigor of the Cabinet. In regard to Dr. Eustis and the War Department the situation was far worse; this had always been the weak branch of our system, for the army was wanting in very nearly every element of success derived from efficient organization. Complete collapse was inevitable if the situation were prolonged.

The weight of government now fell almost wholly upon Mr. Monroe and Mr. Gallatin; it is believed that even the Act for the organization of the army at the beginning of the war was drawn up by Mr. Gallatin. The Cabinet broke down first of all, and this helplessness of the War Secretaries, as they were called, has led to a strange mystification of history in regard to the first achievements of our navy in 1812. Long afterwards, in the year 1845, Mr. C. J. Ingersoll published a history of the war, in which he dealt his blows very freely upon Mr. Madison and Mr. Gallatin, and charged them, among other things, with having meant to dismantle our frigates and convert them into harbor defences. This attack drew a paper from Commodore Stewart, who gave another account of the affair. His statement was that he and Commodore Bainbridge arrived at Washington on the 20th June; that on the 21st they were shown by Mr. Goldsborough, chief clerk of the Navy Department, a paper containing the orders, which had just been drawn, for Commodore Rodgers not to leave the waters of New York with his naval force; that on the same day the Secretary of the Navy informed them that it had been decided by the President and the Cabinet, to lay up our vessels of war in the harbor of New York; that they had an interview with the President on the same day, in which the President confirmed this decision; that on the 22d the two commodores presented a joint remonstrance; and that the subsequent orders, under which the vessels went to sea, were the result of this remonstrance. A letter of Mr. Goldsborough to Commodore Bainbridge, dated May 4, 1825, confirmed the fact of the joint remonstrance, and added some details in regard to the transaction.

This statement of Commodore Stewart drew from Mr. Gallatin a reply, which will be found in his printed Writings.[114] He asserted that he had no recollection of any such scheme for laying up the frigates; that he was confident no such Cabinet council was ever held as was referred to by Commodore Stewart; that the President, under the laws, had no power to make such a disposition of the navy; that Congress had never contemplated anything of the sort; and that the orders previously or simultaneously given contradicted such an idea.

His remarks upon the Secretary of the Navy, however, show the situation as it then existed: "Owing to circumstances irrelevant to any question now at issue, my intercourse with Mr. Hamilton was very limited. He may have been inefficient; he certainly was an amiable, kind-hearted, and honorable gentleman. From his official reports he appears to have been devoted to the cause of the navy, and I never heard him express opinions such as he is stated to have entertained on that subject. Yet his official instructions of 18th June and 3d July, 1812, to Commodore Hull, which I saw for the first time in Mr. Ingersoll's work, evince an anxiety bordering on timidity, a fear to assume any responsibility, and a wish, if any misfortune should happen, to make the officer solely responsible for it."

Mr. Ingersoll and Commodore Stewart, though in different ways, both in effect charged upon Mr. Gallatin this scheme of laying up the navy; it was, according to them, his influence in the Cabinet which had almost deprived the nation of its maritime glories. This is one of those curious echoes of popular notions which so often bias historians, and was founded partly on his old hostility to the navy, partly on his known indisposition towards the war. There was, in fact, no truth in it. Mr. Gallatin has himself, in the paper quoted above, recorded his feelings about the navy at this time:

"For myself I have no reason to complain. Commodore Stewart, in mentioning my name, only repeats what he heard another say, and he ascribes to me none but honorable motives and opinions, which, as he believed, were generally those of the public at large. He says, indeed, that out of the navy he knew at Philadelphia but one man who thought otherwise. My associations were, however, more fortunate. From my numerous connections and friends in the navy, and particularly from conversations with Commodore Decatur, who had explained to me the various improvements introduced in our public ships, I had become satisfied that our navy would, on equal terms, prove equal to that of Great Britain, and I may aver that this was the opinion not only of Mr. Madison, but of the majority of those in and out of Congress with whom I conversed. The apprehension, as far as I knew, was not on that account, but that by reason of the prodigious numerical superiority of the British there would be little chance for engagements on equal terms, and that within a short time our public ships could afford no protection to our commerce. But this did not apply to the short period immediately subsequent to the declaration of war, when the British naval force in this quarter was hardly superior to that of the United States. The expectation was general, and nowhere more so than in New York, where the immediate capture of the Belvidere was anticipated, that our public ships would sail the moment that war was declared. In keeping them in port at that time the Administration would have acted in direct opposition to the intentions of Congress and to public opinion."

Commodore Stewart replied in rather indifferent temper to Mr. Gallatin's very mild statement,[115] but in doing so he printed the sailing orders of June 22, 1812. An examination of the Madison papers in the State Department at Washington also brings to light the following note, and by placing the note of Mr. Gallatin side by side with the sailing orders sent by the Secretary of the Navy to Commodore Rodgers, it will be easily seen who was responsible for sending Rodgers to sea.

GALLATIN TO MADISON.

[No date. June 20 or 21, 1812.]

DEAR SIR,--I believe the weekly arrivals from foreign ports will for the coming four weeks average from one to one and a half million dollars a week. To protect these and our coasting vessels whilst the British have still an inferior force on our coasts, appears to me of primary importance. I think that orders to that effect ordering them to cruise accordingly ought to have been sent yesterday, and that at all events not one day longer ought to be lost.

Respectfully.

SECRETARY HAMILTON TO COMMODORE RODGERS.

NAVY DEPARTMENT, 22d June, 1812.

... For the present it has been judged expedient so to employ our public armed vessels as to afford to our returning commerce all possible protection. Nationally and individually the safe return of our commercial vessels is obviously of the highest importance, and, to accomplish this object as far as may be in your power, you will without doubt exert your utmost means and consult your best judgment.... Your general cruising ground for the present will be from the Capes of the Chesapeake eastwardly. Commodore Decatur, ... having the same object in view, will, for the present, cruise from New York southwardly.... You are now in possession of the present views of the government in relation to the employment of our vessels of war....

* * * * *

These two documents establish beyond question the curious fact that it was Mr. Gallatin who fixed the policy of the Administration in regard to the navy in 1812; that it was he who urged the President and the Navy Department up to their work; and that it was he who should have had the credit, whatever it may be, of sending Rodgers and Decatur to sea. These orders of June 22 were the actual cruising orders which settled the policy of the navy for the time, and took the place of temporary orders issued to Rodgers on June 18, in which he was directed to make a dash at the British cruisers off Sandy Hook and return immediately to New York.

In the face of these incontrovertible pieces of evidence, one is left to wonder what can have been the foundation for the circumstantial story told by Stewart and Bainbridge that they read on June 21, 1812, in the chief clerk's room at the Navy Department in Washington, orders which had just been drawn at the instance of Mr. Gallatin for Commodore Rodgers not to leave the waters of New York with his naval force; orders issued, as the Secretary of the Navy then and there explained, because it had been decided by the President and Cabinet, also at Mr. Gallatin's suggestion, to dismantle the ships and use them as floating batteries to defend New York harbor; and that the cancelling of these orders and the reversal of this policy were due to the vehement remonstrances of these two gallant naval officers, who won a victory in the President's mind over the blasting and fatal influence of Mr. Gallatin. It is a new illustration of the old jealousy between arms and gowns.

GALLATIN TO JOSEPH H. NICHOLSON.

WASHINGTON, 26th June, 1812.

DEAR SIR,--I am just informed that you are in Baltimore. If it be true that your Legislature has authorized the banks to lend a portion of their capital to the United States, can you ascertain what amount may be obtained from them all either by taking stock or by way of temporary loans reimbursable at the expiration of one or more years? We have not money enough to last till 1st January next, and General Smith is using every endeavor to run us aground by opposing everything, Treasury notes, double duties, &c. The Senate is so nearly divided and the divisions so increased by that on the war question that we can hardly rely on carrying anything....

* * * * *

War being now declared, Mr. Gallatin was condemned to do that which, of all financial work, he most abhorred; to pile debt upon debt; "to act the part of a mere financier; to become a contriver of taxes, a dealer of loans," and, in the inevitable waste of war, to be the helpless abettor of extravagance and mismanagement. These were not the objects for which he had taken office; they were, in fact, precisely the acts for which he had attacked his predecessors, had driven them from power, and appropriated their offices and honors, and no one felt this inconsistency more severely than Mr. Gallatin himself, although five years of painful effort and constant failure had taught him how feeble were party principles and private convictions in the face of facts. He was compelled to go on and to see worse things still. Every part of the administrative system, except one, collapsed. The war was miserably disastrous. The Act for raising 25,000 men had not become law until the 11th January, 1812; the selection of officers was not completed until the close of the year; the recruiting service was not organized in time; the enlistments fell short of the most moderate calculation, and the total number of recruits was so small as to make impossible any decisive movement on the line of Lake Champlain, although Montreal was almost unprotected. No sufficient naval force was provided on the Lakes, and in consequence an American army at Detroit was surrounded and captured by a mere mob of Canadians and Indians, who, inferior in every other respect to their opponents, had the inestimable advantage of a brave, energetic, and capable leader. Bad as this experience was, it hardly equalled the military performances at Niagara, where the commanding generals showed a degree of incompetence that descended at last to sheer buffoonery. The War Department in all its branches completely broke down, and if it had not been for the exploits of those half-dozen frigates whose construction had been so vehemently resisted by the Republican party under Mr. Gallatin's lead, the Navy Department would have appeared equally poorly. The control of the Lakes was in fact lost, and only partially regained in 1813; the whole gun-boat system, on which millions had been wasted, went to pieces; even the frigates were mostly soon captured or blockaded, and, but for the privateers, England, at the end of the war, had little to fear on the ocean. Amid this general collapse of administration, Mr. Gallatin might have found hope and comfort had Congress shown capacity, but Congress was at least as inefficient as the Executive. Nothing could induce it to face the situation; with the exception of an Act for doubling the duties on importations, it passed no tax law until more than a year after the declaration of war, and it was not till the public credit was ruined and the Treasury notes were dishonored that Mr. Dallas, then Secretary of the Treasury, succeeded in bringing the Legislature to double the direct tax, to increase the rate of the internal duties and add new ones, immediately before the peace.[116]

A thorough reorganization of the Executive Departments was necessary, and should have been undertaken by the President before the war was even declared, but energy in administration was not a characteristic of Mr. Madison. He hesitated, delayed, postponed, and at length, as in the case of Robert Smith, he was dragged at the heels of men and events. Hardly a month had passed since the declaration of war, and Congress had adjourned on July 6 to meet again on the 3d November; Mr. Gallatin had just started for New York to seek for money, and the President had set out for his farm at Montpelier, when an express arrived with the news that General Hull had surrendered Detroit. What Mr. Gallatin thought of this affair may be inferred from the following extract of a letter to his wife:

GALLATIN TO HIS WIFE.

WASHINGTON, 31st August, 1812.

... Hull has in unaccountable manner surrendered all his troops (about 1800) prisoners of war to an inferior force. We have no direct accounts from him, but the fear of Indians for himself and the inhabitants is the probable cause of his not having extricated himself by retiring and abandoning the country. Proper measures for repairing the loss will be adopted; but how they will be executed by Eustis, no one can say....

* * * * *

The disaster at Detroit made a change in the War Department inevitable, but the change was not yet made. Mr. Gallatin pressed it as necessary from a financial point of view. When he found that the army and navy estimates would require a loan of $21,000,000 for the year 1813, he wrote to the President as follows: "I think a loan to that amount to be altogether unattainable. From banks we can expect little or nothing, as they have already lent nearly to the full extent of their faculties. All that I could obtain this year from individual subscriptions does not exceed $3,200,000. There are but two practicable ways of diminishing the expenditure: 1, by confining it to necessary objects; 2, by introducing perfect system and suppressing abuses in the necessary branches. 1. In the War Department, to reduce the calls for militia, and, above all, to keep the control over those calls and other contingent expenses; in the Navy, to diminish greatly the number of gun-boats, and to strike off all supernumerary midshipmen, pursers, sailing-masters, and other unnecessary officers. 2. System requires skill in forming and decision in executing. But the preparing and executing such plans must rest almost exclusively with the heads of the Departments. I have no doubt that knowledge and talents would save several millions, and the necessary business be better done."

This letter was written towards the end of October, 1812. Already on the 11th of that month, as appears from a brief note written by Mr. Gallatin to the President,[117] some exchange of places had been suggested by Mr. Madison, perhaps between Eustis and Monroe, but the suggestion was condemned by Gallatin as more open to criticism than almost any other course that could be adopted. So far as can now be guessed, it is probable that Mr. Gallatin and Mr. Monroe wished to reorganize the Cabinet throughout; Mr. Monroe would then have become Secretary of War, Mr. Gallatin would have succeeded him as Secretary of State, and possibly William H. Crawford would have taken the Treasury; an arrangement which would have given great strength to the government and eliminated many causes of weakness. To this, however, Mr. Madison would not consent, probably from the belief that it would infallibly be defeated in the Senate. In this state of suspense the Administration stumbled on until the end of the year; then Dr. Eustis resigned of his own accord, and Mr. Monroe assumed temporarily the duties of his office, as he easily might, since the war had made the Department of State a sinecure. Governor Hamilton also resigned of his own accord, and immediate action by the President thus became necessary.

GALLATIN TO JEFFERSON.

WASHINGTON, 18th December, 1812.

... The series of misfortunes experienced this year in our military land operations exceeds all anticipations made even by those who had least confidence in our inexperienced officers and undisciplined men. I believe that General Dearborn has done all that was in his power. The conduct of Hull, Rensselaer, and Smyth cannot be accounted for on any rational principle. It is to be hoped that Mr. Eustis's resignation will open brighter prospects. For, although those three disasters cannot with justice be ascribed to him, yet his incapacity and the total want of confidence in him were felt through every ramification of the public service. To find a successor qualified, popular, and willing to accept, is extremely difficult.

* * * * *

It was just this moment that Mr. Josiah Quincy, hottest of all Federalists, chose for his once celebrated attack on the Administration: "It is a curious fact," he said, in his speech of 5th January, 1813, "but no less true than curious, that for these twelve years past the whole affairs of this country have been managed, and its fortunes reversed, under the influence of a Cabinet little less than despotic, composed, to all efficient purposes, of two Virginians and a foreigner.... I might have said, perhaps with more strict propriety, that it was a Cabinet composed of three Virginians and a foreigner, because once in the course of the twelve years there has been a change in one of the characters.... I said that these three men constituted to all efficient purposes the whole Cabinet. This also is notorious. It is true that during this period other individuals have been called into the Cabinet; but they were all of them comparatively minor men, such as had no great weight either of personal talents or of personal influence to support them. They were kept as instruments of the master spirits; and when they failed to answer the purpose, or became restive, they were sacrificed and provided for; the shades were made to play upon the curtain; they entered; they bowed to the audience; they did what they were bidden; they said what was set down for them; when those who pulled the wires saw fit, they passed away. No man knew why they entered; no man knew why they departed; no man could tell whence they came; no man asked whither they were gone."

In this description there was truth as well as oratory; but Mr. Quincy did not add that this despotism had been tempered by faction to an extent which had left in it very little of the despotic. Even while Mr. Quincy was charging the mysterious three with the design of making Mr. Monroe "generalissimo" in order to perpetuate their power, the three were in a quandary, as much perplexed as any of their neighbors, and actually deciding to accept General Armstrong as the least of their evils. Not one of them had any confidence in General Armstrong; they knew him to be no friend of theirs; to belong to a family--the Clintons--which had for twenty years or thereabouts acted without reference to them; one of whose chiefs, George Clinton, had, as Vice-President, given infinite annoyance to the Administration, while another, De Witt Clinton, had, within three months, run a mad race to get himself elected President by the Federalists in opposition to Mr. Madison; they knew that Armstrong had been through life a master of intrigue, and that his ambition was only checked by his indolence; but they knew that he had ability and that he had loyally supported the government. General Armstrong, therefore, became Secretary of War, while the Navy Department was given to William Jones, of Philadelphia, an active merchant and politician, who, in other days, had served as lieutenant under Commodore Truxton.

Meanwhile, Mr. Gallatin had in his own department cares enough to occupy all his energies. When Congress met in November, 1812, the House was still less disposed to support the Secretary than it had been in the spring. Langdon Cheves, of South Carolina, was now chairman of the Committee of Ways and Means. The Presidential election was over and Mr. Madison was secure in his seat, but the House had less appetite for taxation than before; it refused even to support the Secretary in other money measures. The first trial of strength, in which Mr. Gallatin was worsted, came in an embarrassing form. When the British government on June 23, 1812, revoked its orders in council, the declaration of war being then unknown in England, great quantities of British merchandise were at once shipped to America on the faith of the Act of Congress of March 2, 1811, which promised a renewal of intercourse whenever the British orders should be revoked. Even after the declaration of war became known, these shipments continued, protected by British licenses from British cruisers. All these vessels and cargoes were of course seized on arriving in American ports. The next step was to release such property as was owned in good faith by Americans, the Treasury taking bonds to the value of the cargoes, and, owing to the great rise in prices consequent on the war, the owners made very large profits, in some cases even to the whole amount of the bonds. Mr. Gallatin, unwilling to assume the responsibility of remitting or exacting the forfeitures, referred the subject to Congress, and in doing so expressed the opinion that in the peculiar circumstances of the case a reasonable compromise would authorize the remission of one-half the forfeitures, due to the collectors, and the exaction of the other half, or its equivalent, due to the government. The amount of property involved was about $40,000,000, including the importers' profit. Mr. Gallatin's proposition would have assumed a forfeiture to the amount of about $9,000,000. The regular duties, if the forfeitures were wholly remitted, would amount to about $5,000,000.

On this question there arose a sharp battle in the House, and Mr. Cheves led the Federalists in a vigorous assault upon the Secretary. Perhaps this attack was more honest and less spiteful than the attacks of Mr. Giles, but it was hardly less mischievous: "I would rather see the objects of the war fail; I would rather see the seamen of the country impressed on the ocean and our commerce swept from its bosom, than see the long arm of the Treasury indirectly thrust into the pocket of the citizen through the medium of a penal law. We might suffer all these disasters and our civil liberties would yet be safe. That principle of our government would still be preserved which subjects the purse of the citizen to no authority but a law so plain that he who runs may read. How are the exigencies of the government for the next year to be supplied? That portion of them which is provided is rather the result of accident than forecast. Is the deficiency to be derived from taxes? No! I will tell gentlemen who are opposed to them, for their comfort, that there will be no taxes imposed for the next year. It was said last session that you would have time to lay them at this session, but I then said it was a mistake. You now find this to be the fact. By your indecision then, when the country was convinced they were necessary, you have set the minds of the people against taxes. But were it otherwise, you have not time now to lay them for the next year."

Jonathan Roberts, of Pennsylvania, a member of the Committee of Ways and Means, led the debate in defence of Mr. Gallatin, but in the end Mr. Cheves, aided by the Federalists and by Calhoun, Lowndes, Macon, and other very honest men, carried his point, and the forfeitures were entirely remitted, by a very close vote of 63 to 61. Mr. Gallatin's hold even on the Committee of Ways and Means was now lost.

At this point of the war, within four months of its declaration, the Treasury was threatened with a collapse more fatal than that which had overwhelmed the War Department. The circulating capital of the United States was concentrated in the large cities chiefly north of the Potomac, and more than one-fourth of this capital belonged to New England. Not only did New England lend no aid to the Treasury, but her whole influence was thrown to embarrass it. Of loans to the amount of $41,000,000 paid into the Treasury during the war, she contributed less than three millions. This was not all. A large importation of foreign goods into the Eastern States, and an extensive trade in British government bills of exchange, caused a drain of specie through New England to Great Britain. The specie in the vaults of the Massachusetts banks rose from $1,700,000 in June, 1811, to $3,900,000 in June, 1812, and to $7,300,000 in June, 1814, all of which was lost to the government and the Treasury. Even the most prejudiced and meanest intelligence could now understand why the destruction of the United States Bank threatened to decide the fate of the war and of the Union itself. The mere property in the bank, important as this was, counted for comparatively little in the calculation, although seven millions of foreign capital, invested in its stock, were lost to the country by its dissolution and had been remitted to Europe shortly before the war. This was the "British gold" of which Mr. Giles and Mr. Duane were so jealous, and which, had it been allowed to remain, would have probably doubled the resources of the government in fighting British armies and navies, for, setting aside the useless wealth of New England, it is doubtful whether the country contained $7,000,000 in specie in 1812 as the basis of its entire currency system. This, however, was not the most serious loss. The State banks, with a capital of something more than $40,000,000, took up the paper previously discounted by the United States Bank, to the amount of more than $15,000,000. Then came the war, and Mr. Gallatin applied every possible inducement to borrow for government the means of the State banks. Those of New York, Philadelphia, and Baltimore responded to the call; they subscribed directly to the loans, and they enlarged their discounts to such of their customers as subscribed; in doing so they necessarily exceeded their resources and were obliged to enlarge their issues of bank paper. Meanwhile, in order to fill the chasm made by the dissolution of the United States Bank, new banks were created in the States; a bank mania broke out; in four years one hundred and twenty new banks were chartered, doubling the banking capital at a time when commerce was annihilated and banks were less needed than ever. They created no new capital and withdrew what would otherwise have been lent to the government. Governor Snyder, in Pennsylvania, was forced to veto a bill making a wholesale creation of new banks. Finally, since, in the absence of a national bank, the government had no means of controlling the issues, these rapidly increased to an amount greatly in excess of the requirements, until a suspension of specie payments and hopeless confusion of the currency became inevitable. This took place in 1814, and it was Mr. Gallatin's opinion, as it must be the opinion of every financier, that if the United States Bank had been in existence the suspension might have been delayed for a considerable time, while the terrible disorganization of the whole system of internal exchanges, by which the government was very nearly brought to a stand-still, need not have taken place at all.[118]

Had Congress been more tractable, something might perhaps have been done to alleviate the situation; but the Senate was utterly beyond control, and the House was becoming almost equally perverse. The expedient adopted by government fifty years later in the face of similar difficulties, even had it been now thought of, would have had little chance of general acceptance. Mr. Gallatin could get no action from Congress. His tax bills of the preceding session had been postponed on the understanding that they should be adopted before the 1st January, 1813; but, meanwhile, experience proved that these bills, violent as they had at first been thought, were quite unequal to the occasion, and that much stronger measures were needed. The five millions which had luckily fallen in, owing to the enormous British shipments after war was declared, helped to tide the Treasury over its immediate difficulties, but it helped also to encourage the inaction of Congress. Mr. Cheves did not contribute to smooth the path of the Treasury. He wished to force Congress to raise revenue by abandoning the non-importation system, which was still maintained as a coercive measure against Great Britain; this was also Mr. Gallatin's wish, but Congress refused its consent. Meanwhile, the tax bills were untouched. Month after month passed, and still nothing was done until the session closed on March 3, 1813, when, since it was universally conceded that these bills must be taken up, an extra session in May for this express purpose became necessary. All Congress would do, meanwhile, was to authorize loans, the favorite resource of incompetent financiers.

Many years later, Mr. Jonathan Roberts, who had been a member of this Congress, writing to Mr. Gallatin in the garrulity of age, recalled his recollections of the war. The letter is dated December 17, 1847, and seems to have been merely a spontaneous expression of old feelings. "When it was first my fortune to have met you," he wrote, "I found you to be a ripe and experienced statesman, possessed of the affectionate confidence of the most eminent and wisest among your compeers. You were only about ten years my senior, but immeasurably advanced above me in capacity for usefulness for that small disparity in years. In a very early period of our intercourse you gave me proofs of your confidence, of which I felt myself not unworthy, but which I had not been taught to look for from one who had so long mixed in state affairs.... While I witnessed an admiration of your character among enlightened and liberal minds, abundant evidences were not wanting of envy, jealousy, and even hatred. My sympathies were enlisted in your favor, and my indignation was roused in witnessing ebullitions of these detestable passions. You stood the friend of peace in the crisis pending the last war,--an attitude that called for the exercise of higher moral nerve than the opposite position; while our friends Madison and Macon, feeling with you, each in your places, fulfilled every duty with the honest purpose to seek for peace as the object they most desired.

"You can hardly fail to remember how Mr. Cheves acted towards you as chairman of Ways and Means, and how Colonel Johnson baffled every effort to report the tax bills. These men, too, gave their votes for an extravagant loan bill, which probably [no] man could have raised, even on the predicate of adequate taxes. At your suggestion I hastened to visit Governor Snyder, to give him your views of what would be the effect of the measure of the forty-one new banks on the prospects of raising loans. On meeting him I found he had negatived the bank bill, and it only remained for me to leave with him the views you had charged me with."

[Sidenote: 1813.]

Mr. Gallatin's annual report in November, 1812, had been reticent in tone, perhaps because he was unwilling to discourage, and yet had nothing encouraging to say. He simply gave the condition of the Treasury and announced that a loan of twenty millions would be required. Congress authorized a loan of sixteen millions and the issue of five millions in Treasury notes; it would do no more; every other plan or suggestion of Mr. Gallatin or of the President was defeated or ignored.

Such was the situation when Congress adjourned on the 4th March, 1813. Mr. Gallatin then opened his loan. The Treasury was nearly exhausted; so nearly that on the 1st April it was absolutely empty, and must have ceased to meet the requisitions of the War and Navy Departments; the Federalists were in high hope that the loan would fail and government fall to pieces, and they made the most active efforts to force this result. The crisis was serious, and it was in this emergency that Mr. John Jacob Astor rendered to Mr. Gallatin and to the country essential aid; by his assistance Mr. Gallatin was enabled to make his terms with Mr. Parish and Mr. Girard, and thus three foreigners by birth, Mr. Gallatin himself being of foreign birth, saved the United States government for the time from bankruptcy, and perhaps from evils far more fatal; so, at least, the Federalists thought, and they long vented their wrath against these foreigners, as they called them, for an act which was certainly a somewhat bitter satire upon American patriotism.

Just at this moment the Russian minister, Daschkoff, communicated to the Secretary of State an offer of mediation on the part of the Emperor. His note bore date the 8th March, and in the situation of our government not only towards that of Russia, but towards the peace party at home, it had the gravest significance. There could be no hesitation in accepting the offered mediation, but there might be a question whether it were best to accept it before hearing from England. To show over-eagerness for peace would weaken our position abroad; but the position abroad was of less consequence than union at home, and sluggishness in meeting peace propositions would stimulate every domestic faction. The President decided not to wait, but to send commissioners at once. Mr. Gallatin had now, by the end of March, disposed of his loan; he could easily arrange the affairs of his Department so as to admit of his absence, and he requested the President to let him go to Russia.

So many and so complicated are the influences which must have acted upon Mr. Gallatin's mind to produce this decision, that they are hardly to be set forth with any certainty of measuring their precise relative weight; yet there can be little possibility of error in assuming, as the most powerful, the conviction which had long weighed upon his mind that his usefulness in his present position was exhausted, and that Congress would do better, at least for a time, without him. So accustomed had Congress become to throwing upon him the burden and the blame of every measure, that nothing short of his retirement would break the spell which bound them, and so ineradicable were the enmities which neutralized all his efforts, that only his self-effacement could extinguish them. This he had long known, but the President's wishes had tied his hands. He could not desert the President or the country if his services were needed; but the situation had now become such as to create a serious doubt whether his services were not really more necessary abroad than at home. A year not yet quite elapsed had already brought the country into a position grave in the extreme; financial collapse and domestic treason were becoming mere questions of time; another campaign was inevitable, and it might fairly be reckoned that, if this were not successful, success was out of our power; diplomacy, therefore, had become the most important point of action next to service in the field, and in diplomacy Mr. Gallatin naturally felt that he had a brilliant future before him. Here he would escape from all his old difficulties and enmities; to Europe the Smiths, Duanes, Gileses, and Leibs would hardly care to follow him. The past was a failure; he might fling it away, and still rescue his country and himself by this change of career.

Mr. Gallatin grew more and more silent with age and experience; he never complained, and never said what was calculated to wound; but he had now stood for five years in a position inconsistent with his principles and grating to his feelings. In deciding to go to St. Petersburg he was well aware that he would be charged with having deserted his post, and charged by the same men who for four years had made it impossible for him to perform the duties of that post, and who still presented an impenetrable barrier to every attempt on his part at efficient administration. It is probably true that Mr. Gallatin himself hoped not to return to the Treasury; if he returned at all, he would have preferred the dignified ease of the State Department; but these points he did not and would not attempt to settle in advance; he left it absolutely in the hands of Mr. Madison to decide for the public interest what disposition to make of his services. There were two obvious contingencies; the one, in case the Senate should insist upon his resignation as Secretary, and, to obtain this, reject his nomination as commissioner; the other, the case of diplomatic delays that might prevent his return and compel the President to fill his vacant place: "Mr. Bayard asked me," wrote Mr. Dallas in the following February, "whether you had reflected upon the first event as a probable one, and you merely smiled when I repeated his question to you." Mr. Dallas seems to have felt a little irritation at this reticence, but a sadder smile than Gallatin's can hardly be imagined even among the Administration in these trying times, although it may have been brightened by a touch of humor at the thought how readily the Senate would fall into that agreeable occupation, and how willingly he would throw upon them that responsibility. In any case it was not for him to direct the President's action; Mr. Madison himself could alone be the judge of what the occasion required.

Of course it was fully in Mr. Madison's power to retain Mr. Gallatin at his post. He too seems, however, to have been impressed with the advantages of sending him to Russia, and the act was carefully considered and was his own. In the case of negotiations taking place, America afforded no negotiator comparable to Gallatin; if he were willing to go, his presence would be invaluable.

With Mr. Gallatin it was at last decided to associate Mr. Bayard, of Delaware, so that the mission finally consisted of Gallatin, J. Q. Adams, then Minister to St. Petersburg, and James A. Bayard. Of course the most rapid action was necessary; Mr. Bayard's appointment was only decided on the 5th April, and Mr. Monroe then expected the vessel to sail with Mr. Gallatin within a fortnight. Fortunately, the necessary business of the Treasury was well in hand. On the 17th April, Mr. Gallatin wrote a letter to the Secretaries of War and of the Navy, giving a general view of the fiscal situation for the year and regulating the drafts which these two Departments might make upon the Treasury, to the amount, namely, of $17,820,000, to January 1, 1814. The tax bills were ready for Congress to act upon; a draft for a new bank charter was prepared and left behind; every contingency, as far as possible, was provided for. Mrs. Gallatin and the younger children were to pass their summer as usual in New York, while the eldest son, James, accompanied his father as private secretary.

Before closing this part of Mr. Gallatin's history and turning to the new career which was to occupy nearly all his thoughts for sixteen years to come, the results of his sudden departure upon Congress and upon the Treasury shall be briefly told. Another extract from the letter of Jonathan Roberts already quoted will furnish an idea of the immediate effect of Mr. Gallatin's absence. He sailed on May 9, and Congress met on May 23. Mr. Roberts proceeds: