January 29, 2019

THE NOT-SO-FAMOUS ALBERT GALLATIN WAS BORN ON THIS DAY IN 1761: On the south side of the Treasury Department Building in Washington stands a statue of the first Secretary of the Treasury—Alexander Hamilton. No surprise there: Hamilton has been viewed as an important figure for a long time, and these days he’s a sexy Broadway star too. At the Pennsylvania Avenue entrance, stands a likeness of the fourth Secretary—Albert Gallatin—a man who has been mostly forgotten. On more than one occasion, I’ve noticed tourists peering at the statue from the street and asking something like, “Who’s that? Why isn’t that Hamilton?” Poor Gallatin.

The two Secretaries had a lot in common—both were foreign born (Gallatin was Swiss, Hamilton was born in Nevis), both were orphaned at a young age, and both were financial whizzes at a time when financial sophistication was rare in the US.

When Jefferson became President he was convinced that Hamilton and his successors had been up to no good while in charge of the treasury and that Gallatin was the only man with the financial acumen needed to expose their wickedness. To Gallatin’s credit, after a thorough examination of the records, he explained to Jefferson that it wasn’t corruption that was the problem.

To Gallatin—who has been described by a biographer as having “a small-shopkeeper’s sense of integrity”—the real problem was the $83 million national debt still left over from the Revolution. He wanted to pay it down, but without imposing onerous internal taxes. During the Whiskey Rebellion, his sympathies had been with the western farmers, who were being taxed heavily.  On the other hand, he knew when debt was appropriate and worked hard to provide the financing for the Louisiana Purchase when opportunity unexpectedly knocked.  By 1812, he had whittled the debt down to $45 million, which was a significant accomplishment, especially considering that he’d nixed the whiskey and other direct, internal taxes. (Alas, it ballooned again on account of the War of 1812. War is like that).

UPDATE (FROM GLENN): Thanks to taking an, um, more sympathetic role in the Whiskey Rebellion, Gallatin produced a much freer United States in L. Neil Smith’s alt-history novel The Probability Broach.

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