Administration
To arrive at a correct estimate of Mr. Gallatin’s administration of the Treasury Department, a cursory review of the establishment as he received it from the hands of Mr. Wolcott is necessary. This review is confined to administration in its limited sense, namely, the direction of its clerical management under the provisions of statute law. The organization of the department as originated by Hamilton and established by the act of September 2, 1789, provided for a secretary of the treasury as head of the department, whose general duty should be to supervise the fiscal affairs of the country, and particularly to suggest and prepare plans for the improvement and support of the public credit; and, under his direction and supervision, a comptroller to adjust and preserve accounts; an auditor to receive, examine, and rectify accounts; a treasurer to receive, keep, and disburse moneys on warrants signed and countersigned; a register to keep the accounts of receipts and expenditures; and an assistant to the secretary of the treasury to fill any vacancy from absence or other temporary cause. In addition to the departments of State, Treasury, and War, a fourth, that of the Navy, was established April 30, 1798. The three departments were brought into relation with that of the Treasury by an act passed July 16, 1798, supplementary to that organizing the Treasury, and which provided, 1st, for the appointment of an accountant in each department, who was required to report to the accounting officer of the Treasury; 2d, that the Treasurer of the United States should only disburse by warrants on the Treasury, countersigned by the accountant of the Treasury; 3d, that all purchases for supplies for military or naval service should be subject to the inspection and revision of the officers of the Treasury. Mr. Jefferson, after his usual fashion of economy in the wrong direction, proposed to Mr. Gallatin “to amalgamate the comptroller and auditor into one, and reduce the register to a clerk of accounts: so that the organization should consist, as it should at first, of a keeper of money, a keeper of accounts, and the head of the department.” But in the Treasury Department there was no extravagance during Gallatin’s administration, and the shifting of responsibility would bring no saving of salaries.
In May, 1800, an act was passed making it “the duty of the secretary of the treasury to digest, prepare, and lay before Congress at the commencement of every session a report on the subject of finances, containing estimates of the public revenue and expenditures, and plans for improving and increasing the revenue from time to time, for the purpose of giving information to Congress in adopting modes for raising the money requisite to meet the expenditures.” Hamilton had never sent in any other than a statement of expenditure for the past fiscal year, together with the estimate of the accountant of the Treasury for the proximate wants of the departments of government. Mr. Gallatin incorporated in his annual report a balance sheet in accordance with the ordinary forms of book-keeping familiar to every accountant and indispensable in every business establishment, and such as is presented to the public in the monthly and annual statements of the Treasury Department at this day.
The statutes show no legislation during Mr. Gallatin’s period of administration, and to its close he was in continual struggle to force upon Congress and the departments an accord with his pet plan of minute specific appropriation of the sums estimated for and expended by each. Mr. Madison heartily agreed with Mr. Gallatin on this subject, and on taking office placed the relations of the State Department upon the desired footing. But the heads of the Army and Navy were never willing to consent to the strict limitation which Mr. Gallatin would have imposed on their expenditures. In his notes to Jefferson for the draft of his first message in 1801, Mr. Gallatin said that the most important reform he could suggest was that of ‘specific appropriations,’ and he inclosed an outline of a form to be enforced in detail. In January, 1802, he sent to Joseph H. Nicholson a series of inquiries to be addressed to himself by a special committee on the subject, with regard to the mode by which money was drawn from the Treasury and the situation of accounts between that department and those of the Army and Navy. To these questions he sent in to the House an elaborate reply, which he intended to be the basis of legislation. Strict appropriation was the ideal at which he aimed, and this word was so often on his tongue or in his messages that it could not be mentioned without a suggestion of his personality. He carried the same nicety of detail into his domestic life. He managed his own household expenses, and at a time when bountiful stores were the fashion in every household he insisted on a rigid observance of the more precise French system. He made an appropriation of a certain sum each day for his expenses, and required from his purveyor a strict daily account of disbursements. An amusing story is told of him at his own table. On an occasion when entertaining a company at dinner, he was dissatisfied with the menu and expressed his disapprobation to his maître d’hôtel, a Frenchman, who replied to him in broken English, that it was not his fault, but that of the “mal-appropriations.”
The example set by Mr. Gallatin in this particular was never forgotten, and from his day to this strict accountability has been the tradition of the Treasury Department, now greatly increased in detail, but in structure essentially as it was originally organized. Of its management Mr. Sherman was able to say in his report of December 1, 1879, “The organization of the several bureaus is such, and the system of accounting so perfect, that the financial transactions of the government during the past two years, aggregating $3,354,345,040, have been adjusted without question with the exception of a few small balances, now in the process of collection, of which it is believed that the government will eventually lose less than $13,000, or less than four mills for each $1000 of the amount involved;” and in 1880 he said with entire truth, “The department is a well organized and well conducted business office, depending mainly for its success upon the integrity and fidelity of the heads of bureaus and chiefs of divisions.”