Philipp M Hildebrand: Albert Gallatin, one of the financial founding fathers – what can we learn from him today? Speech by Mr Philipp M Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Swiss-American Chamber of Commerce, Geneva, 10 September 2008. I would like to thank Signe Krogstrup for her valuable support in drafting this speech. I also thank Rita Kobel and Urs Birchler for their very helpful comments and discussions. * 1. *  *  Introduction  As always, it is a great pleasure to be in Geneva. I want to thank the Swiss-American Chamber of Commerce for its kind invitation. My remarks today are unusual in the sense that I will not structure them around monetary policy, the ongoing financial turmoil, or any other current monetary topic. Instead, I have the privilege to step aside temporarily from my day-to-day preoccupations and indulge in a little bit of history about a remarkable man whose origins are firmly rooted in Geneva’s beautiful “vielle ville”. Ladies and Gentlemen, it is an honor for me to pay homage to Albert Gallatin – the Geneva-born fourth – and to this day longest – serving United States Secretary of the Treasury. 1 Those of you who enjoy economic history will be familiar with the extraordinary accomplishments of Alexander Hamilton, the first Secretary of the Treasury, appointed by President George Washington in 1789. Hamilton built the foundation of the U.S. federal financial system in the late 18th century.
8  Contrary to what the party’s name suggests, the Republican Party established by Jefferson in the late 18 century was in fact the forerunner of today’s Democratic Party. 9  Hamilton only served as Treasury Secretary until 1795, after which Wolcott, a fellow Federalist, took over until 1801. But Wolcott is generally perceived as having continued and completed the policies of Hamilton until Dexter took over, for a few months only. Gallatin took office in May 1801. 2  BIS Review 106/2008  th  and, finally, the creation of the first Bank of the United States. 10 The Bank of the United States gave the federal government a tool to manage short-term credit and cash flow and to influence – and thereby help safeguard – the stability of the emerging financial system of the United States. 11 The Bank also significantly extended access to credit for private enterprise. During these extraordinary years, Gallatin first served as a representative in the state legislature of Pennsylvania. He was involved in the adoption and ratification of the state constitution. After a brief period as a senator, Gallatin became a member of the House of Representatives in 1795, where he served until 1801. 12 As a congressman, he established himself as a leading figure in the emerging Republican Party led by Thomas Jefferson. Gallatin quickly gained the reputation of being the member of his party with the most profound understanding of public finance.