Alexander Hamilton had said that a national debt could be a national blessing.22 Representative Gallatin, on the other hand, soon dubbed Hamilton’s funding system a “public curse.” Covering borrowing with government bonds meant putting off the reckoning, which inflated public desire for government spending. Using this mechanism, he insisted, the Washington administration had covered up $2.8 million of growth in debt over the previous four years.23

  The government’s spending struck Gallatin as wasteful, particularly as it related to military matters. America could not compete with Britain, France, or Spain in the naval line, and so it should not try. If Gallatin had his way, the United States would pay off its debts first and turn to building a navy later. Besides that, lump-sum appropriations had allowed the Executive Branch to transfer money from one purpose to another—thus effectively taking Congress’s power of the purse for itself. Gallatin wanted specificity in appropriations, and he got it while Republicans controlled the House. After party control shifted in 1797, Gallatin persuaded the speaker of the House to create the Committee on Ways and Means, the House’s first permanent standing committee. Through that mechanism the House has had power to control federal spending as carefully as it wanted ever since.24

  5

  Gallatin published his Sketch of the Finances of the United States in 1796.1 In measured terms it attacked Alexander Hamilton’s fiscal policies and proposed alternatives. As the historian of early American public finance, Thomas K. McCraw, put it, “Here, perhaps more than in any other single document of the era, one can see in high relief the differences in the two American schools of thought about a wide variety of issues.” McCraw sees the Sketch as a kind of prospectus of the Jeffersonian ascendancy, at least through the War of 1812.

  Gallatin’s chief contentions in his Sketch fall into two categories: the theoretical and the particular. The theoretical claims he makes, typically of Republicans, are that debt corrupts public morality and that it inflates the financial class and the military, as it supposedly had done in eighteenth-century Britain. The particulars are that Hamilton’s fiscal system had facilitated unnecessarily bloated federal spending and, in McCraw’s words, “a deliberate increase in the national debt.”

  Gallatin noted that since 1789 the government’s debt had grown from $75 million to $85 million. He made no mention of the fact that while the debt was growing by just over 13 percent, the economy and federal revenues had grown far more quickly, leaving the government in a far better fiscal position than it had been in at the time of Washington’s inauguration. Had Gallatin taken account of this reality, he might have counseled his fellow congressmen, American voters, and, ultimately, the Jeffersonian presidents differently than he did.

  Gallatin urged that the Federalists’ ongoing program of building up the U.S. Navy, centering on construction of six frigates, be abandoned. He questioned the utility of having any navy at all. After upbraiding the Federalists first for their measures of defense against Indians to the west, then for their huge deployment of manpower against the Whiskey Rebellion, Gallatin at last turned to Hamilton’s financial measures. Funding the federal debt at par, he said, had meant paying four times its then–market value, and assumption of responsibility for the state governments’ debts ought never to have happened at all.

  Gallatin also advocated a structural change to the federal tax system. Hamilton’s system relied largely on tariffs, which fell most heavily on the overwhelmingly agricultural southern states. Gallatin therefore would have put significant reliance on a property tax. Finally he would have eased the terms of purchase for the federal lands. Such sales not only would have provided a relatively painless source of funds, but they would have sped migration of population into America’s abundant open land.

  Representative Madison reported to former secretary Jefferson that “Gallatin [is] a real Treasure in this department of Legislation. He is sound in his principles, accurate in his calculations & indefatigable in his researches. Who could have supposed that Hamilton could have gone off in the triumph he assumed, with such a condition of the finances behind him?”2

  Like Madison, Gallatin had by this time married into a family (the Nicholsons of New York) that was in time connected to numerous members of Congress. Add his primacy among Republicans in regard to financial policy and his Pennsylvania constituency, and Gallatin had established himself as the obvious choice for the Jefferson Cabinet’s number-two post.

  The great difficulty in forming Jefferson’s Cabinet lay in the new Department of the Navy. In short, understanding Republicans’ (particularly Gallatin’s) general hostility to naval expenditures, likely candidates recognized that the office would decline significantly in importance as Republican budget cutters worked their way with it. Having been rebuffed on that basis by Robert Livingston, Jefferson next asked Samuel Smith of Maryland to take the job, and he too declined.3 The new president’s eventual appointee, Smith’s brother Robert, was the fifth man offered the job—and two of the first four turned it down twice. Along the way Jefferson confided to a correspondent, “I believe I shall have to advertise for a Secretary of the Navy.” Robert Smith would prove a virtual cipher in the Cabinet.4

  Not that it mattered. Jefferson moved quickly to cut military spending. Though sworn into office only on March 4, 1801, he was by June 20th writing Virginia’s Governor James Monroe that

  We are preparing and carrying into execution all the reforms in economy we can. our navy partly selling off, partly laying up is now on an establishment of about half a million a year. it might have been reduced to 400,000. & still kept three frigates in the Mediterranean, had the regulations of Congress permitted it. the marines will be dismissed in a few days to about 400. which will economise about 40,000. D. about the same sum is saved by the discontinuance of useless diplomatic missions. [He referred to embassies in The Netherlands, Prussia, and Portugal.5] in the erection of shipyards &c. some hundred thousands will be stopped.

  Monroe likely would have found this heartening, though unsurprising. Perhaps startling to Jefferson’s friend, however, would have been the president’s news that “the expenses of this government were chiefly in jobs not seen; agencies upon agencies in every part of the earth, and for the most useless or mischievous purposes, & all of these opening doors for fraud & embezzlement far beyond the ostensible profits of the agency. these are things,” he concluded, “of which no man dreamt, and we are lopping them down silently to make as little noise as possible.” Anticipating Monroe’s wonderment, he added that, “they have been covered from the public under the head of contingencies, quartermaster’s department &c.”6

  Washington, D.C., is today the capital of the world’s most important state. It is a major population hub, its own population ranking twentieth among American cities and its suburban areas extending well into neighboring Virginia and Maryland. On March 4, 1801, on the other hand, when President Thomas Jefferson took the oath of office, Washington, D.C., was a forlorn place, the Executive Mansion and Capitol Hill separated by a significant expanse of swamp. The uncompleted mansion in which President John Adams had lived for a month remained unfinished, so that his wife Abigail had thought nothing of putting up a clothesline in the East Room, which today is the most public room in the White House. Jefferson was well into his second presidential term before workmen completed the stairway to his house’s second floor.

  Try though they might, American officials failed to entice anyone not directly connected to the Federal Government to relocate to the capital. Semi-annual public land auctions routinely yielded less money than expected. Attempts first to persuade Congress and then to entice the public into funding a university there failed—the public lottery that was intended to fund it landing the lottery operator in jail. The chimera of a canal connecting the Potomac River that ran through the District of Columbia to the Ohio River also came a cropper. A British diplomat noted during James Madison’s first presidential term that the American capital had “not a single great mercantile house,” and even two decades later, the federal capital still lacked “all sights, sounds, [and] smells of commerce.”7

  It was not only businessmen who stayed away from the aspiring imperial center. The new town lacked lobbyists, out-of-town newspapermen, and, in general, American citizens. “Far more in evidence,” says the leading historian of the town’s early years, “were Indians, come to present grievances or to pay respects to the white father [that is, the president].”8 Washington also had, as of 1820, “what was probably America’s first soup kitchen,” which graced the hill designated for Congress’s home.9

  One reason no one else relocated to the new federal capital is that the new government was seldom there either. The Supreme Court sat for a few months each year, other than which the justices spent much of their time “riding circuit”—that is, hearing intermediate-level appeals in their assigned geographic circuits. Congress too met only for a few months each year. Just as Secretary Madison had opted for the College of New Jersey in Princeton to avoid the Tidewater vapors, so President Jefferson told Secretary Gallatin that he would never spend the three sickliest months in Tidewater. This meant he would not be in Washington in the summer, as the reason for Alexandria, Virginia’s location was that it was on the Potomac River’s fall line (the farthest point inland to which a seagoing vessel could sail), thus on tidewater. Jefferson meant by this to instruct the Geneva-born western Pennsylvanian to flee town in the summer, but the herculean Swiss work ethic that helped make the treasury secretary so valuable an ally kept him at his desk even while his two senior colleagues summered at their Piedmont plantations: Montpelier and Monticello.

  Anyone familiar with twenty-first-century imperial Washington will have to work to bear in mind that Jeffersonian Washington bore no resemblance at all to today’s city. A better analogy would be to the seven villages in west central Italy described by Livy as precursors to “the glory that was Rome.” In the eighth century BC, those hills were home to a few hundred proto-Italians. The federal Union’s top officials lived generally in two clusters of housing units: virtually all of the Executive Branch employees near the Executive Mansion, and most of the legislators around the Capitol.10

  A young Massachusetts senator, John Quincy Adams, noted in his diary that the 2.5-mile walk from his boardinghouse in the region of the Executive Mansion to the Capitol each day took him forty-five minutes.11 The young senator felt gratitude the time that Vice President Aaron Burr stopped him on his way to offer a carriage ride. (He accepted the offer.)12

  Almost uniquely among Executive Branch employees of the Jeffersonian era, Gallatin opted to live on Capitol Hill.13 There he played a significant role in ushering the president’s (meaning, in many of its most significant aspects, Gallatin’s) program through Congress. Members of Congress frequently visited his home, and he could easily walk to the Capitol and surrounding congressional boardinghouses. Though critics such as Henry Adams exaggerated the unity of the Republican Party, their characterization has more than a kernel of truth to it.

  Upon being elected Jefferson faced several tasks. He immediately submitted the names of all of his Cabinet choices except a navy secretary and Gallatin to the Senate for confirmation.14 (Remembering that a Federalist Senate majority had expelled Gallatin, and in light of the Federalist press’s attacks on Gallatin, the president would hold off submitting his name until newly elected Republican senators made their appearance later in the year. For now a recess appointment of Gallatin would have to do.)15 Besides secretaries of state, treasury, war, and navy, he would need a postmaster general (in those pre–Civil Service Reform Act days, an important patronage position) and an attorney general (not an appointed office until Reconstruction). He chose Levi Lincoln of Massachusetts for attorney general and Gideon Granger of Connecticut for postmaster general with an eye to the political intelligence concerning their region—the Federalists’ last redoubt—that they could provide him. The Senate consented right away.

  These top Executive Branch posts represented only the apex of the federal pyramid. While the president sat atop a picayune branch of a Lilliputian government in 1801, the absence of a permanent party structure and the political nature of all the appointments meant that Jefferson faced a set of related problems in staffing the government. In general he managed it better than most presidents, though not as well as, say, Washington did.16

  When George Washington first staffed the high offices, he looked for several kinds of qualifications. The Electoral College had chosen Massachusetts’s John Adams for vice president, so the Bay State was covered. Jay family lore says that when the general arrived in New York to assume the presidency, he stayed at John Jay’s mansion. With the New Yorker’s extensive experience in foreign policy and significant role in the ratification campaign no doubt in mind, Washington offered Jay, as the latter’s son told it, “any office he might prefer.” Perhaps surprisingly Jay opted to become the first chief justice of the Supreme Court.17 Jefferson seemed an obvious second choice for what he at least expected to be the top Cabinet position (that is, once there came to be a Cabinet, as Washington himself decided there would be). The president and his then-ally Madison went to two other men with the idea of their serving as secretary of the treasury. When each declined, they settled upon Alexander Hamilton—nominally a New Yorker, but in reality a native of the West Indies without any particular emotional or cultural attachment to the Empire State. Washington kept Henry Knox, his chief of artillery during the war and at the time the Confederation Congress’s war secretary, on in that post, and he selected Edmund Randolph to be attorney general. Not only had Randolph played key roles in both the Philadelphia Convention and Virginia’s ratification battle, been attorney general of Virginia for ten years, and held that state’s governorship, but he had for several years been Washington’s personal attorney. As there would be no Justice Department until after the Civil War, the attorney general was to be the chief Executive Branch legal advisor, and so it would have been hard to find a better choice than Randolph.

  In those days the vice presidency was seen as a Legislative Branch office. What Jay, Jefferson, Hamilton, Knox, and Randolph had in common was that each had distinguished himself in high office and supported the creation of the new government. (Washington likely had not seen Madison’s correspondence with Jefferson about ratification and a bill of rights, else he might have looked elsewhere than to the marginally pro-ratification Virginian for a secretary of state.) With Madison advising him behind the scenes, all three authors of The Federalist would have important posts, formal or informal, in the Federal Government’s early days. Ultimately Washington staffed the federal courts with prominent ratification-campaign Federalists too, again with Madison’s help.

  As political parties came into being in the 1790s, Washington’s appointments seemed increasingly partisan. The general, enamored of Bolingbroke’s conception of the “Patriot King” (a king above/outside the party system), could be forgiven for seeing critics of his administration as unfit for service in it.18 John Adams followed the same practice, as indeed he might have been expected to do: the Republicans put up Jefferson against him, after all. Most historians see his offer of a British posting to Madison as calculated at once to smooth over partisan differences and to get the Republicans’ slickest party operator out of the country.

  When it came to it, then, when at last given their chance, many of Jefferson’s supporters expected payback. Those people felt a certain discontent with the evenhanded posture Jefferson had taken in his First Inaugural. As one leader among them, prominent 1790s Virginia Republican congressman William Branch Giles, told Jefferson in a letter dated only twelve days into the new president’s tenure, “Many of your best and firmest friends already suggest apprehensions, that the principle of moderation adopted by the administration, although correct in itself, may by too much indulgence, degenerate into feebleness and inefficiency.”19 If that happened, Republican morale would be sapped and Federalist vim restored. Federalists, Giles confided, “are not dead.—They only sleep.”

  What to do? Giles got to the point: “A pretty general purgation of office,” he confided, “has been one of the benefits expected by the friends of the new order of things.” Likely thinking that on reading this far Jefferson would have begun to feel a pang of discomfort, Giles hastened to add that “although an indiscriminate privation of office, merely from a difference in political sentiment, might not be expected; yet it is expected, and confidently expected, that obnoxious men will be ousted.”

  When first reading it, Jefferson might have thought that by “obnoxious,” Giles meant not merely “Federalist,” but “actively partisan.” He would have been mistaken. Giles held that “from the prevalence of the vicious principles of the late administration, and the universal loyalty of its adherants in office, it would be hardly possible to err in exclusions; at the same time I highly approve of that part of your speech which recognizes justice, as the right of the minority as well as the majority.”

  Giles looked for a pretty broad removal of government placeholders, and he was not alone. Over and over again through his presidency, Jefferson would butt heads with supporters aggrieved at his temperate removal policy. Yet Giles’s was not the sole Republican view. So, for example, Jefferson’s old friend since his college days, Dr. Walter Jones, wrote shortly after the inauguration to share his opinion on the subject.20 Not only had Jones been a friend of Jefferson’s, but he had served as a representative in one of the two Congresses when Jefferson was vice president, and he would return for a four-term stint two years into Jefferson’s presidency, so although he would never be as prominent as Giles, we may infer that his thinking reflected that of a substantial share of Jefferson’s supporters.21