Albert Gallatin was a Swiss-American politician who served as a United States senator from 1793 to 1794, member of the House of Representatives from 1795 to 1801, secretary of the Treasury from 1801 to 1814, minister to France from 1816 to 1823, and ambassador to the United Kingdom from 1826 to 1827. He was the longest-serving secretary of the Treasury, serving under presidents Thomas Jefferson and James Madison.
Gallatin was born in Geneva, Switzerland, in 1761. At the age of nineteen, he left Geneva and travelled to America, settling in Pennsylvania. There, he became increasingly involved in politics and was elected to the state legislature in 1790. He was elected to the US Senate in 1793, but several members of Congress filed a protest against him arguing that he did not meet the constitutional requirements to be a senator because he had not been an American citizen for nine years. Gallatin challenged this claim, but he lost his appeal and was removed from office.
Gallatin was elected to the US House of Representatives in 1795, helping to establish the House Ways and Means Committee. In 1797, he became the leader of the Democratic-Republicans in the House, the equivalent of today’s House Majority Leader. He became the party’s financial expert, and in 1801 President Thomas Jefferson appointed him secretary of the Treasury.
As secretary, Gallatin reduced the national debt and secured financing for the Louisiana Purchase. When James Madison became president in 1809, he reappointed Gallatin. Gallatin strongly supported re-chartering the first Bank of the United States, which he argued was essential to securing public finances and ensuring a sound national currency. But agrarian Democratic-Republicans like Jefferson opposed the institution because they felt it placed too much power in the hands of bankers. Gallatin urged Congress to renew the Bank’s twenty-year charter before it expired in 1811.The proposal failed by one vote. As a result, the United States had to repay more than $7 million to foreign stakeholders in the Bank one year before the war with Britain in 1812. Without a national bank, Gallatin struggled to finance the war.
In 1813, Gallatin took a leave of absence from the Treasury to head a delegation to negotiate an end to hostilities with Great Britain. After the war, he served as the American minister to France from 1816 to 1823. In 1828, he moved with his family to New York City. He wrote an article for the American Quarterly Review entitled “Considerations on the Currency and the Banking System of the United States,” in which he outlined a banking system for the United States with a national currency backed by gold and silver and issued by a single national bank. These recommendations were part of the debate over the re-chartering of the second Bank of the United States, which President Andrew Jackson vetoed in 1832. Gallatin’s proposal was a precursor to the gold standard, which the United States adopted in the late nineteenth century, and the Federal Reserve System, which the United States created in the twentieth century.
Gallatin also helped establish New York University and published an extensive study on the ethnology and linguistics of Native Americans. He was married twice and died on August 12, 1849, a few months after the death of his second wife, Hannah.
Written by the Federal Reserve Bank of Richmond. See disclaimer.