To Albert Gallatin
Washington Apr. 1. 1802.
I have read and considered your report on the operations of the Sinking fund and entirely approve of it, as the best plan on which we can set out. I think it an object of great importance, to be kept in view, and to be undertaken at a fit season, to simplify our system of finance, and bring it within the comprehension of every member of Congress. Hamilton set out on a different plan. in order that he might have the entire government of his machine, he determined so to complicate it as that neither the President or Congress should be able to understand it, or to controul him. he succeeded in doing this, not only beyond their reach, but so that he at length could not unravel it himself. he gave to the debt, in the first instance, in funding it, the most artificial and mysterious form he could devise. he then moulded up his appropriations of a number of scraps & remnants many of which were nothing at all, and applied them to different objects in reversion and remainder until the whole system was involved in impenetrable fog, and while he was giving himself the airs of providing for the paiment of the debt, he left himself free to add to it continually as he did in fact1 instead of paying it. I like your idea of kneading all his little scraps & fragments into one batch, and adding to it a complementary sum, which, while it forms it into a single mass from which every thing is to be paid, will enable us, should a breach of appropriation ever be charged on us, to prove that the sum appropriated, & more, has been applied to it’s specific object. but there is a point beyond this on which I should wish to keep my eye, and to which I should aim to approach by every tack which previous arrangements force on us. that is, to form into one consolidated mass all the monies recieved into the treasury, and to marshal the several expenditures, giving them a preference of paiment according to the order in which they should be arranged. as for example 1. the interest of the public debt. 2. such portions of principal as are exigible. 3. the expences of government. 4. such other portions of principal, as, tho’ not exigible, we are still free to pay when we please. the last object might be made to take up the residuum of money remaining in the treasury at the end of every year after the three first objects were complied with, and would be the barometer thereby to test the economy of the administration. it would furnish a simple measure by which every one could mete their merit, and by which every one could decide when taxes were deficient or superabundant. if to this can be added a simplification of the form of accounts in the treasury department, and in the organisation of it’s officers, so as to bring every thing to a single center, we might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress, and every man of any mind in the Union2 should be able to comprehend them, to investigate abuses, and consequently to controul them. our predecessors have endeavored by intricacies of system, and shuffling the investigator over from one officer to another, to cover every thing from detection. I hope we shall go in the contrary direction and that by your honest and judicious reformations we may be able, within the limits of our time to bring things back to that simple & intelligible system on which they should have been organised at first.—I have suggested only a single alteration in the report, which is merely verbal & of no consequence.—we shall now get rid of the Commissioner of the internal revenue, & Superintendant of stamps. it remains to amalgamate the Comptroller & Auditor into one, and reduce the register to a clerk of accounts, and then the organisation will consist, as it should at first, of a keeper of money, a keeper of the accounts, & the head of the department. this constellation of great men in the treasury department was of a piece with the rest of Hamilton’s plans. he took his own stand as a Lieutenant General, surrounded by his Major Generals, and stationing his brigadiers & Colonels3 under the name of Supervisors, Inspectors &c. in the different states. let us deserve well of our country by making their interests the end of all our plans, and not our own pomp, patronage and irresponsibility. I have hazarded these hasty & crude ideas, which occurred on contemplating your report. they may be the subject of future conversation and correction. accept my affectionate salutations.
RC (NHi: Gallatin Papers); addressed: “The Secretary of the Treasury”; endorsed. PrC (DLC); in ink at foot of first page: “Albt. Gallatin.”
Gallatin presented his REPORT ON THE OPERATIONS OF THE SINKING FUND in a lengthy letter of 31 Mch. to John Randolph, chairman of the Committee of Ways and Means. As in his report submitted to Congress on 21 Dec., the Treasury secretary recommended that an annual appropriation of $7,300,000 be applied to the payment of principal and interest on the public debt. Noting that large installments of the Dutch debt, which had to be discharged abroad, were coming due, Gallatin also recommended that the commissioners of the sinking fund be given authority to employ a special agent in Holland to transact the business “in the most advantageous manner.” Randolph annexed Gallatin’s letter to the report on the public debt, which the committee presented to the House on 9 Apr. Randolph noted that economy would be achieved by making a specific appropriation to the sinking fund, “instead of leaving to it only such surplus as the Government might not choose to employ on any other object.” Only in that way could the debt “ever be extinguished.” The committee presented a bill providing for redeeming the whole of the public debt. The legislation, as approved on 29 Apr., called for the annual appropriation of $7,300,000 and provided measures to more effectually secure the payment of the Dutch debt, including the power, with the approbation of the president, to employ an agent in Europe, with a compensation not to exceed $3,000 per year (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States, Washington, D.C., 1832–61, 38 vols. description ends , Finance, 1:746–50; JHR description begins Journal of the House of Representatives of the United States, Washington, D.C., 1826, 9 vols. description ends , 4:190–1; U.S. Statutes at Large description begins Richard Peters, ed., The Public Statutes at Large of the United States … 1789 to March 3, 1845, Boston, 1855–56, 8 vols. description ends , 2:167–70; Gallatin to TJ, [13 Dec. 1801]).
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