ment of its
currents, Mr. Gallatin, in the first eight years of his administration
of the Treasury, had nothing to do. He had only to maintain those
systems which Hamilton had devised, and which, wisely adapted to the
growth of the country, proved amply adequate to the ordinary
expenditures of the government and to the gradual extinguishment of the
debt. The entire revenue included three distinct branches: imposts on
importations and tonnage, internal revenue, sales of public lands. The
duties on imports of foreign merchandise were alone sufficient to meet
the current expenses of the various departments of administration on a
peace establishment, and, increasing with the growth of the country,
would prove ample in future. The gross amount of imports in the four
years of Adams's administration, 1796-1800, was about three hundred and
fourteen millions of dollars, and the customs yielded about thirty
millions.

Mr. Gallatin's first annual report, submitted to the House of
Representatives in December, 1801, exhibited his financial scheme. He
recapitulated the various sources of permanent revenue. They were those
of Hamilton's original tariff.

The revenues for the year ended September 30, 1801, were the basis of
the estimates for future years. These were

Duties on imports and tonnage $10,126,213.92
Internal revenue 854,000.00
Land sales 400,000.00
--------------
$11,380,213.92

But the close of the war in Europe sensibly diminished the enormous
carrying trade which fell to the United States as neutrals, and, as a
consequence, the revenue from that source; large quantities of goods
were brought into the United States and reexported to foreign ports
under a system of debenture. The revenue on what Mr. Gallatin calls
"this accidental commerce" was $1,200,000. He therefore _estimated the
permanent revenues at_

Customs duties $9,500,000
Land sales 400,000
Postage 50,000
Internal revenue 650,000
-----------
$10,600,000

Or, without the internal revenue, say ten millions of permanent revenue,
as a basis for _the permanent expenditures_.

To bring the expenditures within this sum, however, a reduction in the
army and navy establishments was necessary. This Gallati