"Money," he wrote to Joseph H.Nicholson, "we will want to carry on the war; our revenue will be cut up; new and internal taxes will be slow and not sufficiently productive; we must necessarily borrow.

This is not pleasing to me, but it must be done." Congress was called together for October 26, 1807, and on November 5, Mr.Gallatin sent in his annual report.

There was still hope that Great Britain would make amends for the outrage, and Congress was certainly peaceably disposed.

In the condition of the Treasury there was no reason as yet for recommending extraordinary measures.

The revenues for the year passed the sum of seventeen millions; the balance in the Treasury reached eight and one half millions; the surplus on a peace footing was twelve millions.