ns, amounting in all to $2,820,000. The emergencies were
extraordinary,--the expenses of the suppression of the Whiskey
Insurrection in 1794, and the sum required to effect a treaty of peace
with Algiers in 1795. To fund these sums Mr. Wolcott had recourse to an
expedient which marked an era in American finance. This was the creation
of _new stock_, subscribed for at home. No loan had been previously
placed by the government among its own citizens. Between 1795 and 1798,
four and a half, five, and six per cent. stocks were created. In 1798
the condition of the country was embarrassing. There was a threatening
prospect of war. Foreign loans were precarious and improvident; the
market rate of interest was eight per cent. Under these circumstances an
eight per cent. stock was created, not redeemable until 1809. An Act of
March 3, 1795, provided for vesting in the sinking fund the surplus
revenues of each year.

In the formation of the first Republican cabinet Mr. Gallatin was
obviously Mr. Jefferson's first choice for the Treasury. The appointment
was nevertheless attended with some difficulties of a political and
party nature. The paramount importance of the department was a legacy of
Hamilton's genius. Its possession was the Federalist stronghold, and the
Senate, which held the confirming power, was still controlled by a
Federalist majority. To them Mr. Gallatin was more obnoxious than any
other of the Republican leaders. In the few days that he held a seat in
the Senate (1793) he offended Hamilton, and aroused the hostility of the
friends of the secretary by a call for information as to the condition
of the Treasury. As member of Congress in 1796 he questioned Hamilton's
policy, and during Adams's entire administration was a perpetual thorn
in the sides of Hamilton's successors in the department. The day after
his election, February 18, 1801, Mr. Jefferson communicated to Mr.
Gallatin the names of the gentlemen he had already determined upon for
his cabinet, and tendered him the Treasury. The only alternative was
Madison; but he, with all his reputation as a statesman and party
leader, was without skill as a financier, and in the debate on the
Funding Bill in 1790 had shown his ignorance in the impracticability of
his plans. If Jefferson ever entertained the thought of nominating
Madison to the Treasury, political necessity absolutely forbade it. That
necessity Mr. Gallatin, by his persistent assaults on the financial
p