Albert Gallatin: Enigma Furioso
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| Appalachia |
Abraham Alphonse Albert Gallatin
was born to a rich, famous and noble family in the French part of Switzerland in 1761, but was orphaned a rich orphan and fled to America in the 1780s to escape overbearing and grasping relatives. He started out teaching French at Harvard, but soon purchased Friendship Hill, a 600 acre estate south of Pittsburgh along what was to become the National Road. At first, he ran a busy general store, but soon branched out into successfully buying and selling real estate. Although Uniontown now seems a lonesome hermitage in Appalachia, it was part of the area disputed between Pennsylvania and Virginia, coveted by both states because it seemed like the main route to Ohio at a time when Ohio was the Golden Frontier. Friendship Hill is now a National Park, near Fort Necessity, near General Braddock's grave, and the birthplace of George Catlett Marshall. So it has its attractions, but Gallatin led such a frenzied life it is hard to believe he spent much time there.
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Almost immediately after his arrival in America, Gallatin threw in his lot with Thomas Jefferson in resistance to the Federalist qualities of the new Constitution. Both of them were looking for more liberty than the Constitution offered. The movement became the anti-Federalist party and would have been the anti-constitution party except for reluctance to oppose the towering figure of George Washington. Gallatin's French origins seem to have overcome his aristocratic family background in supporting what the French Revolution had called Jacobin (or "Republican") notions. His Swiss background gave him a credibility in high finance in backwoods America. In spite of being rather out of place among Virginia gentlemen politicians, his personal qualities seem to have made him a natural politician. He hated Hamilton's idea of the National Bank, arguing against it effectively in unsophisticated company. The issue was not opposition to banking, but to the government role in this one which conferred control of the nation's wealth to an elite, and created constant risk of inflation from yielding to political demands. Gallatin later played a role in the chartering of both the Second and the Third Banks, although his motives here were somewhat different. (Government caps on interest rates induced the Banks to lend to only the best risks, which amounted to favoring Philadelphia over the frontier, which was Gallatin's constituency.) He was appointed U.S. Senator for Pennsylvania at the age of 32, but was evicted on a straight party vote on the ground that he had not been an American citizen for the required nine years. It seems likely that accusation was correct. He was soon elected a Congressman, becoming Chairman of Finance (later called Ways and Means), then majority leader after five years. In retrospect, it seems perplexing that a sophisticated financier would oppose a central bank, although his opposition may have been mainly against having politicians operate one, a rather unavoidable consequence of government control. Hamilton's idea that deliberately going into debt was a way to establish "credit worthiness" was denounced as particularly offensive to those who disdained indebtedness as the most dangerous sin of commercial life. The anti-Federalists were clearly wrong on this point, but it is possible to sympathize with their stubbornness. Even today, the unwillingness of banks to lend money to someone who has no history of previous borrowing is one of those things which seem so natural to bankers, and so irritating to apostles of thrift.
It is now unclear whether Gallatin had really never believed what he was saying, or had gradually changed his mind as he gained experience, or had suddenly realized his error as the War of 1812 approached while he was Secretary of the Treasury. In any event, he found himself charged with organizing the finance of a war with no way to do it. What was worse, Jefferson relentlessly pursued the closure of the National Bank for ideological, even fanatical, reasons; and Jefferson was the boss. The resolution of this conflict was to enrich Stephen Girard even further, while forcing Gallatin to a humiliating public reversal of stance. Nevertheless, America simply had to have a bank to fight a war. It is greatly to Gallatin's credit that his frenzied and obviously sincere entreaties to Jefferson and Madison then saved the Nation from a disaster of stupidity. In a larger sense, the dramatic reversal of stance also played a role in shifting American sympathies from France to England. It was a time in our history when American sympathies were wavering. On one side, there was gratitude to the French for bankrupting themselves with unwisely large loans to our struggling revolution, and for allying themselves with our revolution, soon imitating it with one of their own against the common foe of oppressive monarchy. True, there was more than a little hankering for annexation of Quebec as well as the rest of Canada. That was one side of it, which Lafayette, Girard, Gallatin and Jefferson labored to enhance. On the other hand, there was that appalling genocide of the Jacobin guilloutine, which Napoleon soon threatened to extend to all European monarchies within his reach. The Seven Years War, which we called the War of the French and the Indians, had left memories that French ambition could extend from Quebec to Louisiana and include Haiti, they once even occupied Pittsburgh, and their Indian allies had scalped settlers in Lancaster. That was not so long ago. Furthermore, the English invention of the Industrial Revolution was pretty attractive to Americans. Ultimately, we made our choice for steady prosperous commerce of the British sort, rather than glittering glorious conquest, of the French style. By 1813, Gallatin had served longer as Secretary of Treasury than anyone before or since, and earlier had a more distinguished career as both Congressman and Senator than all but a few have ever achieved. When he was offered the position as a commissioner to negotiate the Treaty of Ghent ending the War of 1812, it was natural to expect that it would be the final act of his long political career. It was, however, only the beginning of a ten-year diplomatic career as Ambassador first to France and then to England. Following that with still another new career, he took up academic work, returning to America to found New York University, personally establishing the academic discipline of study in Indian Affairs and language, and founding the American Ethnological Society. Gallatin wrote two books about Indian language patterns, and first suggested that the similarities between the languages of North and South American Indians probably meant they were related tribes. In another sphere, Gallatin is credited with originating the American doctrine of manifest destiny.
While skipping from one distinguished career to several others, Gallatin never forgot he was a banker. He wrote the charter for the Second National Bank ("Biddle's Bank"), plus the Third Bank of Pennsylvania, and founded the National Bank of New York, which was named Gallatin's Bank for a while, before gradually evolving into what is now called J.P. Morgan Chase Bank. As a diplomat, he negotiated many boundary disputes, including Oregon, Maine and Texas. He bitterly opposed the annexation of Texas.
When it comes to writing about Gallatin, there is so much to say it is hard to say anything coherent. He was such a virtuoso of public life that he defeats his biographers in their central task, of telling the world what he was like. There haven't been many, if there were any, enough like him to offer a comparison.
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