In the opening paragraph of his multi-volume, quasi-official History of the Federal Reserve (2003), monetary policy scholar extraordinaire Allan H. Meltzer wrote: “The founders did not intend to create either a central bank or a powerful institution; had they been able to foresee the future accurately, they might not have acted.” They might not have acted—given a little time, those who started the Fed back in 1913 could well have looked upon the result and found it undesirable.
As noted in the first post, Albert Gallatin initially aspired to being a private, rather than a political, entrepreneur. To that end the firm of Albert Gallatin and Co. tried to attract renters or buyers to land in Pennsylvania. McCraw describes how the firm “organized a company store, a boatyard on the Monongahela, and later a glassworks.” (192) Like many commercial men of his day, not the least of whom was Robert Morris, Gallatin’s speculations in land development eventually failed, but the experience of trying to make a go of it in the private economy was important.
Unlike Hamilton, Gallatin had a more nuanced feel for the variations of taste and opinion that a businessman must have to adapt to opportunities as they are, rather than as he might wish them to be. Failure has a way of accentuating the point. Again, McCraw’s text does not specifically highlight this difference, but it comes through well enough in the evidence.
As noted in the two previous posts, a powerful illustration is the attitude of both men to the subject of finance and its relationship to the economy. Most of those who dabbled in political economy at the time presented a hodgepodge of Smithian free-trade arguments and mercantilist expediencies, and neither Hamilton (as we have seen) nor Gallatin were immune to the mixing of apples and oranges.