Congress was called together in October on account of the Louisiana business. It is curious to notice how, in his comments on this year's message, Mr. Gallatin gently held the President back from every appearance of hostility to England and of overwarm demonstrations towards Bonaparte, and how he still talked of economies in the Navy Department to supply some of his financial deficiencies, though this resource was already mentioned only as a desirable possibility. In fact, Congress was about to abandon the attempt at further economy in that Department, and in order to relieve the Treasury the Mediterranean fund was now created for naval expenses. Mr. Gallatin had to look for his resources elsewhere. The financial problem was to provide for the new purchase and its consequent expenditure without imposing new taxes. The point was a delicate one, and was managed by Mr. Gallatin as follows: The purchase-money for Louisiana was $15,000,000. Of this sum, $11,250,000 was paid in new six per cent. stock. There was specie enough in the Treasury to pay $2,000,000 more; and Mr. Gallatin requested authority to borrow the remaining $1,750,000 at six per cent. The consequent increase of annual interest on the debt, including commissions and exchange, he estimated at $800,000. To provide this he counted on an increase of revenue from imposts and lands, as indicated by the returns for the past year, equal to $600,000, and an income of $200,000 from Louisiana. An annual appropriation of $700,000 was to be set aside for the interest on the $11,250,000 new stock, and added to the permanent appropriation of $7,300,000; so that in future $8,000,000 should be annually applied to payment of interest and principal of the debt, thus preserving the ratio of reduction already established. [Sidenote 1803] Perhaps as a matter of fact the success of Mr. Gallatin in avoiding new taxes was rather apparent than real. Had he been able to carry out his economies in the navy, he might indeed have avoided taxation, but this was fairly proved impossible, and the confession of a failure here was only evaded by the fiction of creating a temporary fund for extraordinary naval purposes, which allowed the supposed regular naval expenditure to be estimated at Mr. Gallatin's figures. This was obviously in the nature of a compromise between the Treasury and the Navy, but it was not the less a real increase of taxation, and, as events proved, a permanent increase. The capture of the frigate Philadelphia by the Tripolitans was, it is true, the immediate occasion for this tax, but not its cause; this lay much deeper, and, as Mr. Gallatin's letters clearly show, was the result of a failure in the attempt at economy in the navy.