3  Alexander Balinky, Albert Gallatin: Fiscal Theories and Policies (Rudgers University Press, New Jersey NJ, 1958), provides a thorough analysis and critique of Albert Gallatin’s fiscal and financial system against the background of the political and economic conditions which then prevailed, as well as his party affiliation during his time in office. BIS Review 106/2008  1  orphan when he was only nine. He was raised by his relative, Catherine Pictet. 4 At the age of nineteen, Gallatin obtained a university degree in Latin and Greek. His classic education was not the only early influence on his future political convictions. He was deeply affected by the strict Calvinist attitudes to debt and savings that would have prevailed in Geneva at the time. Moreover, he was privy to and would have actively participated in the rich debates about politics and philosophy that took place in his social circles. These debates were inspired by the French Enlightenment and the influence and presence of the likes of Voltaire and Rousseau during those years. 5 Nonetheless, by the time he completed his studies, Gallatin was disenchanted with his prospects in Geneva as either a civil servant, merchant or member of the officer corps. In 1780, without saying a word to his family, he decided to leave for the newly independent United States of America. As he put it, he wanted to “drink in a love for independence in the freest country of the universe”.
2 Albert Gallatin’s efforts to solidify the Hamiltonian structure and to establish fiscal discipline in the early years of the United States are less well known. 3 As you will see, they clearly merit attention. The story of Albert Gallatin provides a wonderful example of how Swiss and American politics and economics have nourished each other for centuries through the exchange of ideas and people. Moreover, Albert Gallatin’s legacy arguably provides some valuable lessons which remain relevant in the present time. Today, I would like to focus on a crucial part of Gallatin’s legacy – his strong adherence to fiscal discipline. But first, let me take you on a brief tour of Gallatin’s fascinating life story. 2. The life and achievements of Albert Gallatin  For the sake of clarity, allow me to divide Albert Gallatin’s life into four distinct periods. 1761-1788: Youth The first period covers Gallatin’s life prior to becoming politically active in the United States. Gallatin was born into a wealthy merchant family in Calvinist Geneva in 1761. He became an  1  Gallatin served 13 years – longer than any other serving Secretary of the Treasury before or since. 2  Ron Chernov, Alexander Hamilton (The Penguin Press, New York NY, 2004), provides the most recent and complete Hamilton biography.