9 Hamilton’s system rested on four pillars: The creation and extension of sources of federal tax revenues; the funding and management of the federal public debt; the increased use of the U.S. dollar as a medium of exchange through the establishment of the United States Mint  4  Albert Gallatin’s father died when he was four, and his mother when he was nine. His mother sent him to be brought up by his aunt, Catherine Pictet, just after his father died, as she had to attend to the family’s financial affairs. For more on Gallatin’s Geneva background see, for example, William Emmanuel Rappard, Albert Gallatin, citoyen de Genève, ministre des Etats-Unis (Impr. Centrale, Genève, 1917) or John Austin Stevens, Albert Gallatin, An American Statesman (Univ. Press of the Pacific, Honolulu HI, 1883). 5  Voltaire arrived in Geneva in 1755, and moved to Ferney in 1758, where he stayed to his death in 1778. Gallatin’s grandparents visited Voltaire in Ferney and Albert Gallatin was often taken there for visits. Rousseau was born in Geneva, left at a young age but returned there in 1754. He published Du Contrat Social (and other writings) in 1762, a year after Gallatin was born. He was subsequently forced to flee from Geneva, so there was no direct contact, but definitely an influence on the intellectual climate of the city. 6  Stevens, op.cit., p. 10, quotes Gallatin as having used this phrase to explain his departure. 7  In Pennsylvania, Gallatin also founded the colony “New Geneva”.
The legacy  Let me now briefly turn to the legacy of Albert Gallatin’s extraordinary life. It seems to me that there are two major achievements to point to. First, there is Gallatin’s singular success in his pursuit of debt reduction. Gallatin took advantage of prosperous and relatively peaceful times to reduce the public debt of the emerging United States. The second key legacy of Albert Gallatin’s efforts is the way in which he reinforced the financial institutions set up by Alexander Hamilton and made skilful use of them. Hamilton’s financial system consisted of newly established institutions, which encountered fierce political opposition. They lacked the robustness that only the test of time can provide. Gallatin spent the next 13 years successfully using Hamilton’s system to ensure fiscal prudence and continuous sound financial management. Without this, it might not have survived its infancy. This is particularly true of the Bank of the United States. It is possible to argue that Gallatin’s strong support for Hamilton’s bank furthered the process of setting up its successor, the Second Bank of the United States, in 1817. Two recent authors have gone further. They refer to Gallatin as the “Savior” of Hamilton’s financial system. 27 This second legacy is remarkable, given the long-standing animosity between Alexander Hamilton and Albert Gallatin. How are we to explain Gallatin’s transformation from a prominent critic of the Hamiltonian system to its guardian and perhaps savior?