[181] Gallatin argued that the national bank was a useful financial institution and set out to expand its operations.[182] Jefferson looked to other corners to address the growing national debt.[182] He shrank the Navy, for example, deeming it unnecessary in peacetime, and incorporated a fleet of inexpensive gunboats intended only for local defense to avoid provocation against foreign powers.[179] After two terms, he had lowered the national debt from $83 million to $57 million.[177]

Domestic affairs
Jefferson pardoned several of those imprisoned under the Alien and Sedition Acts.[183] Congressional Republicans repealed the Judiciary Act of 1801, which removed nearly all of Adams's "midnight judges" from office. A subsequent appointment battle led to the Supreme Court's landmark decision in Marbury v. Madison, asserting judicial review over executive branch actions.[184] Jefferson appointed three Supreme Court justices: William Johnson (1804), Henry Brockholst Livingston (1807), and Thomas Todd (1807).[185]
Jefferson strongly felt the need for a national military university, producing an officer engineering corps for a national defense based on the advancement of the sciences, rather than having to rely on foreign sources for top grade engineers with questionable loyalty.