necessity of an immediate examination of the
sources of revenue. In January, 1812, Mr. Gallatin was requested by the
chairman of the Committee of Ways and Means to give his opinion as to
the probable amount of receipts from duties on tonnage and merchandise
in the event of war. This, in view of the vigorous restrictions laid by
France under her continental system of exclusion, Mr. Gallatin estimated
under existing rules as not to exceed $2,500,000. He then stated,
without hesitation, that it was practicable and advisable to double the
rate of duties, and to renew the old duty on salt. The sum acquired,
with this addition, he anticipated, would amount to $5,400,000.

On the basis of annual loans of ten millions of dollars during the
continuance of the war (the sum assumed by the committee), the
deficiency for 1814 would amount, by Mr. Gallatin's estimate, to
$4,200,000. To produce a net revenue equal to this deficiency he stated
that the gross sum of taxes to be laid must be five millions of dollars.
He then reverted to his report of December 10, 1808, in which he had
stated that "no internal taxes, either direct or indirect, were
contemplated, even in the case of hostilities carried on against the two
great belligerent powers." The balance in the Treasury was then nearly
fourteen millions of dollars, but in view of the daily decrease of the
revenue he had recommended "that all the existing duties be doubled on
importations subsequent to the first day of January, 1809." As the
revenues of 1809, 1810, and 1811 had yielded $26,000,000, the sum on
hand, with the increase thus recommended, would have reached
$20,000,000, a sum greater than the net amount of the proposed internal
taxes in four years.

At that time no symptoms had appeared from which the absolute
dissolution of the Bank of the United States without any substitute
could have been anticipated. If its charters had been renewed, on the
conditions suggested by Mr. Gallatin, the necessity for internal taxes
would have been avoided. The resources of the country, properly applied,
however, were amply sufficient to meet the emergency; but Mr. Gallatin
distinctly threw upon Congress, and by implication upon the Republican
majority, the responsibility for the state of the Treasury, and the
imperative necessity for a form of taxation which it detested as
oppressive, and which it was a party shibboleth to declare in and out of
season, to be unconstitutional. The choice o