From Samuel Smith
Balte. 20 March 1809
I have been in the habit of corresponding with Mr. Jefferson during his administration, on subject[s] that my information gave me an Opportunity to be particularly acquainted with—I ask that permission of you at present. In this City there are five Banks. One Bank alone has a Republican President “The Bank of Baltimore.” In that Bank the Navy Agent did his public Business. He is now, under your particular direction,1 ordered to transfer the Business of his Agency to the Branch Bank, in which there is no late Instance of a Republican being, either as President or Director, and with which institution very few of your friends ever attempt to do Business. This has caused some Distress and no little mortification to your Republican friends. It is not too late to change the Order. That it may be Changed is the Sincere wish of, your friend
RC (DLC). Docketed by JM.
1. Smith may have made this accusation to test his influence with JM, who was anxious to avoid any friction with the Maryland senator. The order to transfer navy business to the Baltimore branch of the Bank of the United States undoubtedly came on Gallatin’s recommendation, but the order was signed by the acting secretary of the navy, Charles Goldsborough. Early in March Goldsborough wrote twelve naval agents stating that public money was to be deposited by each of them in a designated bank. In Baltimore, John Stricker was ordered to place U.S. public funds in the local branch of the Bank of the United States (Circular to the Navy Agents, 10 Mar. 1809 [DNA: RG 45, General Letter Book]). Whether JM later withdrew the order is uncertain, but Smith’s personal interest in the matter is likely.
The incident soon became part of a larger problem when Smith was drawn into a correspondence with Gallatin concerning the naval agency in Leghorn, Italy, where bills of exchange of questionable value were sent by the firm of Smith and Buchanan. After thinly veiled accusations appeared in a Baltimore newspaper, Smith wrote Gallatin asking the secretary of the treasury to disavow “the nefarious Charge they have made against me.” Gallatin’s cold reply was that the whole transaction was “the most extraordinary that has fallen within my knowledge since I have been in this department” (Smith to Gallatin, 26 June 1809, and Gallatin to Smith, 29 June 1809 [DLC: Samuel Smith Papers]). Details of the failure in Leghorn of Degen and Purviance, involving heavy losses to the U.S. government, are found in Thomas Appleton to JM, 22 Mar. 1809.
Much of Smith’s irritability was related to the fact that his Senate seat was in jeopardy during the spring of 1809. His biographer asserts Smith was reelected “in the face of President Madison’s passive hostility and Secretary Gallatin’s open opposition” (Frank A. Cassell, Merchant Congressman in the Young Republic: Samuel Smith of Maryland, 1752–1839 [Madison, Wis., 1971], pp. 148–52). To complicate matters, Smith’s brother Robert was in JM’s cabinet as secretary of state.