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H. OF R.]

Official conduct of the Secretary of the Treasury.

[MARCH, 1793.

a new system of loans. When the memorable billment that had improperly been adopted on this to authorize another loan of $2,000,000, was before the House, a few weeks ago, we were told by gentlemen on this floor, that there was not time for argument; that the bill must be passed in three or four days, &c.; and when we wanted informa-exhibited his charges against him in writing-had tion, we were told by some of the friends of the bill that it was not convenient to give information there that we might procure information elsewhere, as they had done. I confess I did not comprehend this method of legislating; but the Secretary has since explained it, in one of his Reports, by complaining of the House, because the members did not go to his office and ask information, instead of requiring it to be publicly reported.

The

occasion. A gentleman of this Committee had thought proper to institute an inquiry into the conduct of an officer of the Government in a very important and highly responsible station. He had reduced them to certain and specific facts. To these, and to these alone, he had pointed his evidence, and we were bound in honor and in conscience to give a just and decisive opinion on each independent charge. In the first place, the truth of the facts must be settled and established; if in their favor, the criminality would then necessarily require a second consideration. honor and reputation of the officer thus charged, Even when this favorite bill for a new loan was as well as the respect due to the gentleman who before the House, the Secretary did not condescend had brought forward the accusation, required a to inform us that he had, without authority, pro- steady, uniform, and disinterested examination of vided near a million and a half of dollars for that every question from us. Under this view of the purpose; he did not inform us how obligingly he subject, Mr. B. said he should avoid the desultory had drawn bills upon our bankers in Holland, to mode of argumentation that had been run into on have the money put in our way. Thus, in order both sides, and confine himself to the nature of to anticipate the payments due to the Bank, he did the facts charged, and the evidence adduced in what he could to induce Congress to break the support of them. The short time that yet republic faith, by repealing the existing appropria-mained of the session was too precious to waste tion made for securing the discharge of a debt of in collateral arguments, or the consideration of justice and gratitude to the French nation. From merely presumptive proofs. The first charge in this and other instances, it appears, that however the resolution now before the Committee was, high the Secretary's regard for public credit may "That the Secretary of the Treasury has violated be, there are other considerations which have ob- the law passed on the 4th of August, 1790, making tained a higher degree of his attention than obedi- appropriations of certain moneys authorized to be ence to the laws. The gentleman from Virginia borrowed by the same law, in the following par[Mr. MADISON] has so clearly explained the na- ticulars, to wit: 1st. By applying a certain porture of that discretion with which the Secretary tion of the principal borrowed to the payment of is vested, and so fully proved that there was no interest falling due upon that principal, which necessity to justify a departure from the appropri- was not authorized by that or any other law. 2d. ations made by law, that it is not necessary for By drawing part of the same moneys into the me to explain further on this head. However, I United States, without the instruction of the PREcannot help remarking, that the discretionary SIDENT." These specific charges make it necespowers were pretty freely exercised. The draw-sary for us to understand determinately the terms ing of bills began early indeed, and were continued to a recent period. The times of drawing fortunately corresponded with the necessities of the Bank, and the power of employing agents was

both the sellers and the purchasers of the bills. Perhaps this was necessary: no doubt it was convenient. Probably it was safe; but who can say it will be always so.

I have not said so much to prove the truth of the facts expressed in the resolution, for of this there can be no doubt-it is as clear as the sun, shining in day-light, but, in order to prove the propriety of this Committee expressing its disapprobation of a conduct so unjustifiable. That information was withheld unduly, is evident, from the lateness of this discussion; that it was obtained with difficulty, is evident, from the numerous applications we were obliged to make in order to obtain it.

Mr. BOUDINOT called the attention of the Committee to the change in the usual situation of the House. They were no longer acting in a Legislative capacity, but were now exercising the important office of the grand inquest of the Nation. It was necessary to advert to this circumstance, to prevent running into the diffuse mode of argu

of the act mentioned in the resolution, and the nature of the proof offered in its support. By the act of the 4th August, 1790, section 2—

"The PRESIDENT OF THE UNITED STATES is auexceeding in the whole twelve millions of dollars; and to cause to be that so much of this sum as may be necessary to the discharge of the arrears of interest on loans heretofore made by the United States in foreign countries, and the instalments of the principal of the said Foreign Debt, and (if it could be effected upon terms advantageous to the United States) to the paying off the whole of the said Foreign Debt, be appropriated solely to these purposes; and the PRESIDENT was moreover further authorized to cause to be made such other contracts respecting the said Debt as should be found for the interest of the said States."

It is asserted by the prosecutor of these charges that this act contained an emphatic appropriation of the whole of the twelve millions of dollars to the payment of the Foreign Debt. By a Letter to Mr. Short of May 9, 1791, read in the Committee, it appears that a Loan of three millions of florins had been made, and that one-half only was appropriated to the payment of our debt to France, and that eight hundred thousand florins were to

MARCH, 1793.]

Debate on Mr. Giles's Resolutions.

[H. OF R.

be drawn to this country. This was said to be is authorized to cause to be borrowed a sum or contrary to the terms of the appropriation, and sums not exceeding two millions of dollars, at an without authority; and the Secretary's Report of interest not exceeding five per cent,, and that the January 3, 1793, folio 3, was referred to in proof interest should be applied to the purchase of the of the fact that the interest arising on the prin- Debt of the United States. The difference becipal borrowed under this act was paid out of that tween these acts was, by that of the 4th of Auprincipal;" when, by the same law, part of the gust, the PRESIDENT had a discretion as to the apdomestic revenues of the United States were ap- plication of the sum borrowed towards payment propriated to that purpose. The words of the of the whole of the Foreign Debt, over and above Report are, "payments on account of other Fo- the instalments, depending upon terms of advanreign Loans made and to be made to the 1st Janu- tage to the United States. By the second act ary, 1793, inclusive. February 1, 1791, two hun- there was no discretion, the whole moneys being dred and eighty-nine thousand seven hundred and positively directed by law to be applied towards eighty-three florins six stivers, with several other the purchasing of the Domestic Debt. By the payments on the same terms, till January 1, 1793, first there was no restriction, in point of interest, amounting in the whole to one million eight hun- to be paid, but an injunction that the terms of dred and thirty-three thousand one hundred and repayment should be stipulated within fifteen eighty nine florins two stivers eight deniers. years. By the second, interest was restricted to These payments were asserted to be on account five per cent., and no terms of repayment enjoined. of interest on the principal borrowed, but without By the preamble to the first law, the object of it further proof. By the Report, folio 4, it appears appears to be the doing of justice and supporting that on the 1st of February, 1790, there was bor- public credit, by the payment of the Foreign rowed no more than one million one hundred and Debt; by that of the second, "the reduction of sixty-seven thousand florins, on which was due the Public Debt, which would be beneficial to the the 1st of February, 1791, one year's interest, credit of the Union, by raising the price of their amounting, at five per cent., to fifty-eight thou-stock, and be productive of savings to the United sand three hundred and fifty florins; but this evi- States." By virtue of these acts the PRESIDENT dence proves that two hundred and eigay-nine thought proper to constitute the Secretary of the thousand seven hundred and eighty-three florins Treasury his agent to make the loans; and, acwere paid on that day. Can gentlemen be serious cordingly, on the 28th of August, 1790, by a comwhen they assert that this was for interest on this mission under his hand and seal, reciting both the principal borrowed, being almost twenty-five per said laws, authorized him, "by himself or any cent. per annum, instead of five. This certainly other person or persons generally, to borrow, is an inattention to the subject that the serious within the United States or elsewhere, a sum or nature of the charge cannot justify. Mr. B. then sums not exceeding in the whole fourteen millions asserted that, on a critical examination of these of dollars, subject to the restrictions and limitaitems, they will be found to be instalments of the tions in the said several acts contained." With Dutch Loans made by the old Congress, and this commission the Secretary received instrucwhich this money was expressly appropriated to tions relative to the said loans, in these words: discharge; but he said he did not mean to avoid "You shall borrow, or cause to be borrowed, on the fact, had it been proved, but he denied that the best terms which shall be found practicable, any evidence of it arose from this testimony. and within the limitations prescribed by law, as The PRESIDENT was generally authorized to make to the time of repayment and rate of interest, the loans. Money arising from a domestic. fund such sum or sums as shall be sufficient to diswas appropriated to pay the interest. It happened charge as well all instalments or parts of the printhat the Loan was made in Europe, to the amount cipal of the Foreign Debt which now are due, or of three millions of florins; part of it was to be shall become payable to the end of the year 1791, drawn to this country, but before that event inte- as all interest and arrears of interest which now are rest became due; this was paid out of the moneys or shall become due, in respect to the said Debt, intended to be drawn into this country, and repaid to the same end of the year 1791. And you shall by the fund here, to prevent the unnecessary send- apply, or cause to be applied, the moneys which ing the moneys from one country to the other. shall be so borrowed, with all convenient despatch, Mr. B. asked, if the Secretary had done otherwise, to the payment of the said instalments and parts would any man in his senses have thought him of the principal and interest, and arrears of the worthy of the trust committed to him? But the interest of the said Debt. You shall not extend gentleman has proceeded on this charge (and has the amount of the said Loan beyond the sum so expressed himself) as if this loan was exclu- which shall be necessary for completing such paysively made under the act of the 4th August, ment, unless upon terms more advantageous to mentioned in the resolution before us, and there- the United States," &c. fore was wholly appropriated by law to the payment of the Foreign Debt, and ought not, in any part, to have been drawn into this country for other purposes. This brings to consideration the act of the 12th August, 1790, passed eight days after the act alluded to. By the 4th section of this act the PRESIDENT OF THE UNITED STATES

These instructions related solely to the application of the twelve millions, the two millions, as before observed, being applied by law, without any discretionary power, to the reduction of the Public Debt. Under this commission, it is in proof the Secretary caused three millions of florins to be borrowed in Europe generally, without ex

H. OF R.]

Official conduct of the Secretary of the Treasury.

pressing particularly under which law, but reciting under them both. He directed half of this sum to be applied to the payment of the Foreign Debt, and part of the other half he appropriated, for the purposes mentioned, towards the reduction of the Public Debt. But it is insisted that the whole of this money was borrowed under the act of the 4th August, and therefore it was highly criminal to apply any part of it to the discharge of the interest arising on the principal so borrowed, there being another fund designed for that purpose. But it has clearly appeared that the Secretary made this Loan in Europe, where the interest was to be paid and had become due; the fund for its payment was in this country; and therefore, if he was authorized to draw any part of that principal into the United States, it was a mere economical operation, to pay the interest there out of those moneys on the spot, and repay them out of moneys here, where they were to be applied, and by that means prevent the loss of insurance and interest, that must have arisen by another negotiation. This question, then, depends wholly on the fact whether this money was borrowed by virtue of both acts, or under that of the 12th of August exclusively.

[MARCH, 1973.

part of this money to the purposes of the act of the twelth of August, under which the Loan, as to a greater sum, was certainly made. By this act also the opinion of the Secretary of the meaning of the act of the twelfth of August as to the restriction of the interest to five per cent. was confirmed, and of course all his proceedings under it. There can then be no foundation for the charge, and it remains unsupported by proof.

The next part of the accusation attempted to be supported, was the drawing part of the same "moneys of the United States without instructions from the PRESIDENT." The instructions from the PRESIDENT as to the making the loans and applying them were only called for, he has therefore only reported these to the House; from this negative testimony, it was presumed that no other instructions have been given. This is weak support, indeed, to a criminal charge of this nature. I know it has been urged by one gentleman [Mr. MERCER] that the Secretary has been called upon for the instructions, and if he has failed to report them to the House, he ought to suffer: this shows how fallible gentlemen's memories are. There has been no call whatever of the House on the Secretary for this purpose-our Journals do not show any. The requisition was to the PRESIDENT, and he has complied with the terms of it. But if we are to rest on presumptive evidence, the presumption is in favor of the Secretary. The PRESIDENT has not made objections to the conduct of his agent. He has mentioned the loans to Congress, without disapprobation. The agent was properly accountable to him, and he has not found fault with him; but in his

The Loan was made at five per cent., subject to charges and douceurs of four and a half per cent. on the whole. The Secretary thought this within the act of the twelfth of August, limiting him to an interest not exceeding five per cent. This was the opinion of others besides the Secretary. Mr. B. himself had been of that opinion, and at the time thought an application to the Legislature unnecessary. But the prudence and caution of the Secretary led him to state this fact to Con-Speech at the opening of this and the last session of gress for their consideration and determination, who, by an act of the 3d March, 1791, declared their sense of the act of the 12th of August, and that the Loan was legally made under that act. The preamble to this act removes all doubt on this question:

Congress, has expressed great satisfaction in the state of public affairs. But if the gentlemen who advocate this prosecution really believed this fact, had they it not in their power to have rendered the evidence certain to demonstration, by requesting, by resolutions of the House, that the PRESIwas not drawn in consequence of his instructions, DENT Would declare whether this money was or or with his approbation and consent? Can any man suppose that so responsible an agent as the Secretary of the Treasury would presume (for his own sake) to proceed in so important negotiation, without the knowledge, approbation, and directions of the PRESIDENT OF THE UNITED STATES? But, for argument sake, suppose the fact to be true, is not the Secretary an officer to superintend the collection of the public revenue? As soon as this Loan was made under the act of the twelfth August, was it not his duty, without further instructions, to draw the money into the United States for the purposes mentioned in the act? Would he not have been highly culpable if he had left this money in Holland till the next session of Congress, and waited for a law authorizing This puts an end to any dispute on this sub-him so to do? It is really a reflection on the ject; and if this money was borrowed under both acts jointly, or exclusively under the act of the twelfth August, there can be no propriety or justice in the charge, that the Secretary had violated the act of the fourth of August in applying

"Whereas it hath been made known to Congress that the PRESIDENT OF THE UNITED STATES, in consequence of an act making provision for the reduction of the Public Debt, (that is, that of the twelfth of August,) hath caused a certain loan to be made in Holland, on account of the United States, to the amount of three millions of florins, bearing an interest of five per cent," &c. "And whereas it hath been also stated to Congress that the charges upon said loan have amounted to four and a half per cent., whereby a doubt hath arisen, whether the said loan be within the meaning of the said last-mentioned act, which limits the rate of interest to five per cent. per annum. And whereas it is expedient that the said doubt should be removed, be it enacted," &c., "that the loan aforesaid shall be deemed and construed to be within the true intent and meaning of the said act making provision for the reduction of the public debt," &c.

whole Legislature to suppose they would have directed a Loan which should remain inactive on an interest of five per cent. without giving a power of application.

But it has been said that a larger sum, viz., al

MARCH, 1793.]

Debate on Mr. Giles's Resolutions.

most three millions of dollars, has been drawn
into this country, which was more than the PRESI-
DENT himself was authorized to do. If this is
meant to criminate the PRESIDENT, we ought to
know it. How does the fact stand? It is agreed
that the PRESIDENT had a right to draw the mo-
neys loaned under the act of the twelth of Au-
gust
$2,000,000 00

He had a right to make such other contracts respecting the Debt as should be for the interest of the United States, in consequence whereof the agent in Europe agreed with the National Assembly or the Executive of France, for the payment of four millions of livres, part of their debt, in the produce of the United States, for the supply of St. Domingo

The interest to foreign officers amounted to about

800,000 00

191,316 90

2,991,316 90

This, then, makes about the sum that it is proved was drawn for by the Secretary, and shows that he did not exceed the powers vested in the PRESIDENT for this purpose.

[H. of R.

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This entry affords strong presumption against all the suggestions of the want of instructions from the PRESIDENT, or his ignorance of the proceedings of the Secretary.

3. The Speech of the PRESIDENT delivered to both Houses of Congress, on the 8th of December, 1790, has the following paragraph:

"In conforming to the powers vested in me by the acts of the last session, a Loan of three millions of florins, towards which some provisional measures had previously taken place, has been completed in Holland. The Secretary of the Treasury has my directions to communicate such further particulars as may be requisite for more precise information."

4. The Report of the Secretary in conformity to that direction, dated 24th February, 1791, mentioning terms of the loans and application of moneys.

5. The preamble of the act of 3d March, 1791, already read.

6. In the Report of the Secretary of the Treasury of the receipts and expenditures from the commencement of the Government to the 31st of December, 1791, is the following article of receipts:

It has been also held up as highly criminal in the Secretary, that although he began to draw for this money in December, 1790, yet he never gave information to Congress or to the Trustees for purchasing the Public Debt on the subject; but left them wholly in the dark with respect to so important a measure, when it was his duty particularly to have kept the House constantly informed, and that this could only have happened for the purpose of covering some improper design," or aiding individuals with the public moneys of the United States.

"FOREIGN LOANS.

"From the President, Directors, & Co., of
the Bank of North America, being the
produce of bills of exchange, drawn on
the agents for negotiating Foreign loans
in Holland

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- $229,269 47

From the President, Directors, & Co., of
the Bank of New York, being the pro-
duce of bills of exchange, drawn on the
agents aforesaid

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132,121 87 $361,391 34

To this charge Mr. B. said, he had paid serious attention, for as on the one hand he would ever be ready to bring every defaulter in public office, however exalted in character, to condign punish7. In the Treasurer's account, commencing Jament, where found guilty: on the other hand, henuary 1, 1792, and ending on the 31st March, 1792, wished ever to be found giving full support to every good officer of Government against unfounded charges of peculation and mismanagement of the public revenue. He had satisfied his mind on the subject, not being able to find a scintilla of evidence to support the charge, but abundant testimony to the contrary.

1. Congress knew that this money was appropriated to the payment of the debts in this country, that the Loan was made in Holland, and therefore that it must necessarily be drawn here for the purposes of the act.

2. By the Report of the Trustees of the Sinking Fund, folio 12, under the date of the 25th of August, 1790, is the following entry:

"It is probable that it will be deemed advisable to pay the interest for the year 1791 on the amount of the foreign debt out of foreign loans. There is one now matured for the acceptance of the United States, amounting to three millions of florins, the proceeds of which may be at command in the course of the present year.

are found the following entries of receipts:
"On the proceeds of bills of exchange, drawn on Will-
helm & Jan Willink, Nicholas and Jacob Van Stap-
horst & Hubbard, of Amsterdam, on account of
loans made for the United States, per statement,
$402,902 89."

In his account commencing on the 1st of April,
1792, and ending on the 30th of June, 1792:
"On the proceeds of bills of exchange, &c., in same
words, $1,400,000."

In his account commencing on the 1st of July, 1792, and ending on the 30th of September, 1792: "On the proceeds of bills of exchange, &c., in same words, $1,000,000."

Mr. B., after reading these vouchers, proceeded: These, Mr. Chairman, are the facts that have convinced my mind, at first much alarmed at the severity of the charges and the positive assertions of gentlemen, that discoveries would be made, showing corruption at the very heart of the Go

H. OF R.]

Official conduct of the Secretary of the Treasury.

vernment; these have convinced me fully that this prosecution has been rashly brought forward, without a proper examination of the transaction. My mind, in a conscientious research into the facts, has not been able to raise a doubt, on which to found even a suspicion of the integrity or abilities of the Secretary in this whole negotiation. So far am I from considering those charges supported by testimony, that I consider the conduct of the officer concerned in this transaction, not only wholly cleared up, but the measures he has pursued as stamped with wisdom and official knowledge. So far am I from judging him reprehensible for the manner in which he has negotiated and applied these loans, that I think him deserving of the thankful approbation of his country for his economy and strict attention to the true interests and credit of the United States. I rejoice, sir, that after so full and zealous an investigation, this officer, though unheard, appears to be free from even a suspicion of malconduct in the whole transaction; this is not only honorable to him, but does credit to our country. On the whole, therefore, I am decidedly against the present resolutions, and shall give them my hearty negative.

The House then adjourned until seven o'clock post meridian.

EVENING SESSION-7 P. M.

An engrossed bill making certain appropriations therein mentioned was read the third time, and passed.

[MARCH, 1793.

John Laurance, Amasa Learned, Richard Bland Lee,
George Leonard, Samuel Livermore, Frederick Augus-
tus Muhlenberg, William Vans Murray, Nathaniel
Niles, Theodore Sedgwick, Jeremiah Smith, Israel
Smith, William Smith, John Steele, Samuel Sterrett,
Jonathan Sturges, George Thatcher, Thomas Tudor
Tucker, Artemas Ward, Hugh Williamson, and Fran-

cis Willis.

liam Findley, William B. Giles, Andrew Gregg, NaNAYS.-John Baptist Ashe, Abraham Baldwin, Wilthaniel Macon, James Madison, John Francis Mercer, Andrew Moore, Alexander D. Orr, John Page, and Josiah Parker.

A motion was then made, and the question put, that the House do agree with the Committee of the Whole House in their disagreement to the fourth resolution, in the words following:

"Resolved, That the Secretary of the Treasury has deviated from the instructions given him by the PRESIDENT OF THE UNITED STATES, in executing the authorities for making loans, under the acts of the fourth and twelfth of August, one thousand seven hundred and ninety:"

It was resolved in the affirmative-yeas 39, nays 12, as follows:

YEAS. Fisher Ames, Robert Barnwell, Egbert Benson, Elias Boudinot, Shearjashub Bourne, Benjamin Bourne, Jonathan Dayton, Thomas Fitzsimons, Elbridge Gerry, Nicholas Gilman, Benjamin Goodhue, James Gordon, Christopher Greenup, Samuel Griffin, William Barry Grove, Thomas Hartley, James Hillhouse, William Hindman, Philip Key, Aaron Kitchell, John Laurance, Amasa Learned, Richard Bland Lee, Sto-George Leonard, Samuel Livermore, Frederick Augustus Muhlenberg, William Vans Murray, Nathaniel Niles, Theodore Sedgwick, Jeremiah Smith, Israel Smith, William Smith, John Steele, Samuel Sterrett, Jonathan Sturges, George Thatcher, Thomas Tudor Tucker, Artemas Ward, and Hugh Williamson.

The bill sent from the Senate entitled "An act
providing for the compensation of Ebenezer
rer," was read twice, and committed.

OFFICIAL CONDUCT OF THE SECRETARY
OF THE TREASURY.

The House again resolved itself into a Committee of the Whole House on the third, fourth, fifth, sixth, seventh, and eighth resolutions contained in the motion of Thursday last, respecting the official conduct of the Secretary of the Treasury. The third resolution being still under consideration, in the words following, viz:

NAYS.-John Baptist Ashe, Abraham Baldwin, William Findley, William B. Giles, Andrew Gregg, Nathaniel Macon, James Madison, John Francis Mercer, Andrew Moore, Alexander D. Orr, John Page, and

Josiah Parker.

Another motion was then made, and the question being put, that the House do agree with the Committee of the Whole House in their disagreement to the fifth resolution, in the words follow

Resolved, That the Secretary of the Treasury has violated the law passed the 4th of August, 1790, making appropriations of certain moneys authorized to be borrowed by the said law, in the following particulars, viz:ing: First, by applying a certain portion of the principal borrowed, to the payment of interest falling due upon that principal, which was not authorized by that or any other law. Secondly, by drawing a part of the said moneys into the United States, without the instructions of the President of the United States.

A motion was made, and the question being put, that the House do agree with the Committee of the Whole House in their disagreement to the resolution, it was resolved in the affirmativeyeas 40, nays 12, as follows:

"Resolved, That the Secretary of the Treasury has omitted to discharge an essential duty of his office, in failing to give Congress official information, in due time, of the moneys drawn by him from Europe into the United States; which drawing commenced December, one thousand seven hundred and ninety, and continued until January, one thousand seven hundred and ninety-three; and of the cause of making such drafts:"

Mr. DAYTON said, that, at so late an hour of the night, he was unwilling to detain the Committee YEAS-Fisher Ames, Robert Barnwell, Egbert Ben- unnecessarily. He trusted, however, that they son, Elias Boudinot, Shearjashub Bourne, Benjamin Would grant him their indulgence and attention Bourne, Jonathan Dayton, Thomas Fitzsimons, El- for a few moments before the vote was taken. bridge Gerry, Nicholas Gilman, Benjamin Goodhue, The resolution upon which the sense of the ComJames Gordon, Christopher Greenup, Samuel Griffin, mittee was about to be expressed contained a diWilliam Barry Grove, Thomas Hartley, James Hill-rect charge against the Secretary of the Treasury house, William Hindman, Philip Key, Aaron Kitchell, for having "failed to give Congress official infor

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