he President and Congress were initiating for
the purchase of Louisiana from France.

The secretaries of war and of the navy had promised to reduce their
expenditures to a figure approximate to Mr. Gallatin's estimates; but
the breaking out of hostilities with Tripoli prevented the proposed
economy, and Mr. Gallatin was called upon to provide for an increased
expenditure with one certain source of revenue definitively closed. He
therefore proposed an additional tax of two and one half per cent. on
all importations which paid an _ad valorem_ duty. This additional
impost, laid by act of March 25, 1804, called the Mediterranean Fund,
remained in force long after the war closed and held its place on the
books of the Treasury under that name.

The bulk of the cost of Louisiana was met by an issue of bonds; but Mr.
Gallatin, true to his principle, applied the moneys in the Treasury as
far as they would go. The budget for 1805 was on a different scale. The
increase in the debt demanded a proportionate increase in the revenue to
meet the additional sum required for interest and gradual annual
reimbursement. The Mediterranean Fund was sufficient to meet the
increased amounts required for the navy. In this manner he held up the
Navy Department to a strict accountability and made it responsible to
Congress and not to the cabinet for its administration, and he thus,
from his own point of view, relieved the Treasury Department from any
responsibility for extraordinary expenditure.

Mr. Gallatin closed his four years of administration with flying colors.
The successful management of the finances was an important factor in the
election of 1804, which returned Mr. Jefferson to the presidential chair
and insured to the country the inestimable advantages of Mr. Gallatin's
practical mind. Order reigned in his department at least, and order
subordinate to the strictest requirements of law. In the four years,
1801-1804, Jefferson's first term, the imports aggregated $337,363,510
and the customs yielded $45,000,000.

The annual report, made December 9, 1805, announced an increasing
revenue, amounting in all to thirteen and one half millions of dollars,
chiefly from customs. Still Mr. Gallatin made but small addition to his
estimates for the coming year. The permanent revenue he raised to twelve
and one half millions and increased the appropriation for the payment of
the debt and interest to eight millions. Nothing occurred during the
nex