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Official conduct of the Secretary of the Treasury.

that the Senate have passed a bill entitled "An act providing for the compensation of Ebenezer Storer;" to which they desire the concurrence of this House.

Mr. FITZSIMONS, from the committee to whom was referred the memorial of Arthur St. Clair, made a report; which was read, and ordered to lie on the table.

The House proceeded to consider the amendments reported yesterday by the Committee of the Whole House to the bill making certain appropriations therein mentioned; and the same being read, were agreed to.

Ordered, That the said bill, with the amendments, be engrossed, and read the third time to-day.

OFFICIAL CONDUCT OF THE SECRETARY

OF THE TREASURY.

[MARCH, 1793.

may be, that, in pursuing his charges, I shall substantially answer his arguments. In commenting upon the two first resolutions, to which I am by order confined, I shall consider, in the first instance, what regards the right of drawing money into this country. The gentleman appears not to have considered the law properly, for there cannot be a doubt that the PRESIDENT had a right to make what arrangements he pleased, in order to attain what he might consider a proper modification of the Debt due by the United States abroad. He might have borrowed the money here, or have paid it here; he might have borrowed the money in England, or wherever he thought fit. I will ask the gentleman by what precise authority he borrowed the money in Amsterdam and Antwerp, and paid it in Paris? Certainly by none but that discretion which has been depended upon to mo

The House again resolved itself into a Com-dify the Debt in the manner most conducive to mittee of the Whole House on the third, fourth, fifth, sixth, seventh, and eighth resolutions contained in the motion of yesterday, respecting the official conduct of the Secretary of the Treasury. The third resolution being under consideration, in the words following, viz:

"Resolved, That the Secretary of the Treasury has violated the law, passed the fourth of August, one thousand seven hundred and ninety, making appropriations of certain moneys authorized to be borrowed by the same law, in the following particulars, to wit:

"1. By applying a certain portion of the principal borrowed to the payment of the interest falling due upon that principal, which was not authorized by that or any

other law.

"2. By drawing part of the same moneys into the United States without the instructions of the President of the United States."

Mr. SEDGWICK opened the debate, by calling for the reading of a Letter from the Secretary of the Treasury to Mr. Short, of the 1st of September, 1790, showing the objects and general views of the Secretary, relative to the negotiation of the loans under the two acts authorizing them.

the interest of the United States. I take it, then, for granted, Mr. Chairman, that the right of the PRESIDENT to draw the money borrowed here, or to send it anywhere, must be conceded. The question will then arise, whether the Secretary of the Treasury had a right to do this or not, and whether this has not been done without, nay, against the instructions of the PRESIDENT? I really consider this as one of the most extraordinary cases that I have ever known exhibited. Let us con; sider its form. A highly important trust, of no less import than the discretionary use of fourteen millions of dollars, is placed in the PRESIDENT OF THE UNITED STATES; he, by a general commission, and by special instruction, deputes this power to the Secretary of the Treasury, stating that he is to conform to these, and whatever instructions he might from time to time give him. Let any man seriously examine these powers, and I am of opinion that the Secretary, under these, had a right to draw, if he thought proper, unless instructed to the contrary; for the PRESIDENT conveys a complete power to modify the Debt, provided that it should be, with all convenient deMr. BARNWELL. Mr. Chairman, before I pro- spatch, applied to pay the principal and interest ceed to discuss the observations which yesterday due to France; for where the payments are to be fell from the gentleman who introduced the reso- made are certainly left to the Secretary. If this lutions now before us. I cannot refrain from say- has not been exercised advantageously, this is ing that I am extremely happy that, in passing another circumstance which the gentleman himthrough the medium of that gentleman's exami- self has not questioned. But, says the gentleman, nation, this subject has changed its hue from the the Secretary, under these instructions, had no foul stain of peculation to the milder coloring of special authority to draw; notwithstanding which, an illegal exercise of discretion, and a want of he began to draw in 1790, and has continued to politeness in the Secretary of the Treasury. I draw, at different times, into this country the feel happy, because I always am so when any enormous sum of three millions of dollars, and man charged with guilt can acquit himself; and therefore he must have done this without, nay, the more so now, when a man in a high responsi- against the instructions of the PRESIDENT, who, it ble office, and high in the estimation of his coun- is presumed, having delegated this great trust, has trymen, can reduce a charge from a quality calcu- never, for three years, inquired into the performlated to have excited an alarm, even in Pandemo-ance of it. Can this be the inference of common nium, to such a shape as I fancy will scarce serve to satisfy the uncommon curiosity which it appears to have excited. As I have never been in the habit of taking notes, I shall depend upon memory in answering the gentleman from Virginia; although I imagine, as that gentleman usually sticks very close to his point, whatever it

sense? Can this be the inference of the experience which we have had of the PRESIDENT, one of the prominent features of whose character always has been an industry to investigate particulars, as remarkable as his sagacity to frame Generals? If, then, instructions have not been given, or have been exceeded, was it necessary

MARCH, 1793.]

Debate on Mr. Giles's Resolutions.

[H. of R.

by the Rules of the House. But this I will venture to say, that they will be proved unfounded in their investigation, and will merit the witty observation of a celebrated writer, that "though they rose like a rocket, they will fall like the stick."

for us to come in aid of the PRESIDENT, he who been borrowed, and was already on hand abroad, in by our law has the power, which we ourselves a supply of provisions from here to the Island of cannot exercise, of removing any of the Executive St. Domingo. The Secretary, therefore, and officers at pleasure? It certainly cannot be ne- doubtless with the consent of the PRESIDENT, incessary; for, as this officer continues to act, we stead of transmitting either bills or money from must conclude that he has either acted by instruc- this country to France, in order to pay the intions, or in such manner as to have given satis-terest due there, and bringing the money borfaction to his principal without them. Really, rowed to pay the French Debt into this country, Mr. Chairman, I cannot but believe that if suspi- in order to furnish supplies for St. Domingo, has cion had not led the gentleman from Virginia committed the great crime of directing the money astray, the usual correctness of his understanding borrowed, and already upon the spot, to be applied would have prevented him from pursuing such to the payment of the interest due, and has taken an ignis fatuus as this. Thus, sir, I think I have the sums applicable to the payments of that inteshown that the PRESIDENT OF THE UNITED STATES rest, which was already here, and made use of it certainly had the authority to draw the sums bor- to pay the Debt due to France in the produce of rowed here, and that, both under his commission the United States; so that, although, apparently, and his instructions given, and inevitably implied, a portion of the principal borrowed has been apthe Secretary had also the power to do this. I plied to pay an interest due, yet in reality its shall therefore now proceed to a more special con- capacity to be thus used arose from its constisideration of the first charge, that the Secretary tuting in this country an equivalent sum applicahas violated the law in applying a portion of the ble, and which has been applied to pay off the principal borrowed to the payment of the interest principal of the French Debt, the object for which falling due upon that principal, which was not the money was borrowed. Let candor investiauthorized by law. Before I proceed, Mr. Chair- gate this transaction, and sure I am its deductions man, I would wish to remark that, whilst I con- will be directly the contrary of a charge of crimisider no principle in legislation more correct than nation. I shall conclude with observing that I that money shall be drawn from the Treasury should have proceeded to examine the other resoonly under appropriations by law, yet I consider lutions, which I consider as weak as those I have both as impracticable and mischievous the doc-made short comments upon, were I not restrained trine that the money arising from a special tax shall, in no instance, be used for any other than that special purpose for which the tax was imposed, but aim of opinion that the sums raised ought rather to be considered as an aggregate fund, applicable to aggregate purposes; and, indeed, if a rigid adherence to the precise letter of the law is necessary, there has been no occasion to go abroad to search for violations; for our Government at home has been able to act only by this violation. It is well known that the duties of impost and tonnage are appropriated, first, to produce the sum of six hundred thousand dollars for the civil list, then to pay the interest of the Foreign Debt, and so on; so that, by a rigid observance of this law, the Secretary must have first collected the six hundred thousand dollars into the public coffers, and then a sum sufficient to pay the interest of the Foreign Debt-a process which only requires stating to show its absurdity, and which must nevertheless have been connected with a minute construction of the law. Indeed, Mr. Chairman, if the acts of common life bear any analogy with public management, which I believe, what could be considered as being more extraordinary than that an individual should appropriate the proceeds of one farm to purchase bread, of another drink, and to declare, in the face of contingencies, that, happen what may, he would starve, should the bread crop fail, rather than use the surplus of that appropriated to purchase drink for its purchase. But to return. What is this charge? A sum of money was due abroad for the interest of 1791 and 1792, to be paid out of the domestic revenues of 1791 and 1792; the United States had an offer to make a payment in part of what was due to France, for which money had

Mr. W. SMITH regretted that so important an inquiry had been instituted at the very close of the session, when the members were thronged with business of an indispensable nature, and it was scarcely possible for them to bestow that attention and deliberation which the nature of the subject called for. But, while he expressed this regret, he assured the Committee that it was mingled with much satisfaction, in finding that the vague charges of mismanagement, with which the public had long been alarmed, were at length cast into a shape susceptible of investigation and decision. Previous to an examination of the specific charge then under consideration, he claimed the indulgence of the Committee in offering a few preliminary remarks, which, though they did not bear precisely upon the charge itself, yet were intimately connected with the subject-matter of the inquiry, and were justified by the general remarks of gentlemen who had preceded him.

In recurring back to the origin and progress of this examination, it must appear somewhat surprising that that which, in the commencement of the session, was sounded forth as gross peculation, now turned out to be nothing more than a mere substitution of funds, and that that which was announced as abominable corruption, was dwindled away into a mere drawing of money from Europe into this country, to be applied here according to law.

Whatever credit might be due to the motives which had originated this inquiry, every member

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Official conduct of the Secretary of the Treasury.

[MARCH, 1793.

would concur in the sentiment, that in a Govern- There was one more observation which he ment constituted like that of the United States, thought proper to premise, before he entered into which had nothing but the public confidence for a discussion of the charges; and that was the disits basis, premature alarms and groundless suspi- advantageous situation in which the financier of cions respecting the conduct of public officers this country was placed, when compared with were pregnant with the most injurious conse- that of similar officers in other nations. The quences. This opinion was more peculiarly ap- Minister of Finance in Great Britain being always plicable to the important station of Secretary of a member of the Legislature, and on a footing the Treasury. Intrusted with the management with other members, was prepared to defend himof a large revenue, and necessarily clothed with self when attacked. No charge could be made some latitude of discretion, it was to be expected against his administration which he had not an that he would excite the jealousy of the public immediate opportunity of repelling; and the vigilance; but as long as he kept in view the in-charge and the refutation went out to the world junctions of law, and the public good, his reputa-together. The Secretary of the Treasury was, tion was entitled to that security which is due to on the contrary, not even permitted to come to every citizen. the bar and to vindicate himself. Through the An officer, intrusted with the care and distri-imperfect medium of written reports he was combution of public moneys, is generally looked at with a watchful eye; mankind are too prone to suspect the purity of his conduct; slight insinuations are but too often sufficient to injure him in the public estimation. Such being the natural propensity of things, it doubtless behoved those who wished for tranquility in the country to withhold charges not clearly warranted by proof-to suspend animadversions which were not likely to terminate in conviction. A contrary proceeding had an inevitable tendency unnecessarily to alarm the public mind, to instil into it suspicions against the integrity of men in high stations, to weaken their public confidence in the Government, and to enervate its operations.

pelled, when called upon for information, to answer, as it were by anticipation, charges which were not specific, without knowing precisely against what part of his administration subsequent specific charges would be brought to bear.

If in his reports he was concise, he was censured for suppressing information; if he entered into a vindication of the motives which influenced his conduct, he was then criminated for stuffing his reports with metaphysical reasonings. A gentleman from Pennsylvania [Mr. FINDLEY] had said that the Secretary's reports were so voluminous that he was quite bewildered by them, and that instead of their throwing any light on the subject, he was more in the dark than ever. It was true, the reports were voluminous, but not more so than the imputations on the Secretary's conduct and the orders of the House justified. He did not think that any member, who had attentively perused them, could justly complain of want of information, or of being more in the dark than before; he, on the contrary, believed that so much light had been thrown on the whole of the Secre

not see, it must be owing to the glare of light being too strong for his eyes. Having made these observations, Mr. S. said he should proceed to examine the first charge, which, after much reflection bestowed on it, appeared to him to contain nothing that was not perfectly authorized by the strict letter of the law.

There was something remarkable in the nature of the present allegations against the Secretary. Taking them all into view, they presented nothing which involved self-interested, pecuniary considerations; and in this, they essentially differed from accusations against financiers in other countries, to whom motives of interest were generally ascribed as the source of their peculations. To the Secretary, no such motive was imputed; not-tary's fiscal operations, that if any member could withstanding former insinuations against his integrity, the sum of all the charges now amounted to nothing more than arrogance, or an assumption of power, or an exercise of unauthorized discretion. With respect to discretion, Mr. S. observed that, though in the present inquiry it was not necessary to say much on that topic, being firmly persuaded the Secretary had strictly pursued the injunctions Mr. S. proceeded next to examine the charge of law, yet, while on the subject, he took occasion under consideration. It consisted of two items: to insist that in all Governments a discretionary the first, the application of a certain portion of the latitude was implied in Executive officers, where principal sum borrowed in Europe to the payment that discretion resulted from the nature of the of interest falling due upon that principal, which office, or was in pursuance of general authority it was contended was not authorized by any law; delegated by law. This principle was so obvious the second, the drawing part of the same moneys that it required no illustration; were it contra-into the United States, without the instructions of dicted, he would appeal to the conduct of the Se- the PRESIDENT. cretary of State, who, though directed to report to The first item of this supposed violation of law the House on the commercial intercourse with appeared of so frivolous a nature that it did not foreign nations, had, in the exercise of a warrant- merit much discussion; at any rate, it was more able discretion, judiciously withheld his Report. an objection of form than of substance. If he He would appeal to the Report of the Committee comprehended well the purport of the charge, it on the failure of St. Clair's expedition, wherein was nothing more than this-that the Secretary that failure was in part attributed to the Com- having moneys at his disposal in Europe applicamanding General's not being invested with a dis-ble to the purchase of stock in this country, and cretion to act according to circumstances. having at the same time moneys in this country

Debate on Mr. Giles's Resolutions.

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Official conduct of the Secretary of the Treasury.

[MARCH, 1793.

Congress would remove a doubt as to the terms | 1790, that the Secretary considered ordinary on which the loan had been negotiated. Con- charges and five per cent. interest as within the gress did remove that doubt by their act of March, meaning of the law. Pursuing this construction, 1791. It followed, then, of course, that the resi- and believing it to be very important to the genedue would be applied according to the intimation ral operations of the Treasury, he drew for the given. It was so understood on all hands, and the money, reserving himself as to the final applicamoney being to be invested in this country, it like- tion. for an act of the House removing the doubt. wise followed of course that it must be drawn The drawing for the money was a mere intermehere. A contrary conduct would have been cen- diate step, which amounted neither to a breach, surable. And yet, notwithstanding these facts, nor to a fulfilment of the law, which was wholly though the PRESIDENT had informed the House, silent on that point. The application was the crias far back as December, 1790, that the loan had terion whether the law had been fulfilled or not.. been a conjunct loan, under the authority of both If the Legislature had not removed the doubt, the acts, and consequently for both objects, though, at money would have been remitted back for the fothe same time, he had referred the House to the reign object, and, from the relative price of public Secretary for further information in relation to and private bills, without loss, probably with adthat loan and its applicability, though the Secre- vantage. It was prudent, in the mean time, to tary had, in the name and by order of the PRESI-place it where it was likely to be most useful. DENT, informed the House, by his Report in February, 1791, that only a part of the money borrowed had been applied to the French and Dutch debt, and that the residue would be applied to the purchase of stock, as soon as Congress removed the doubt; though Congress passed a law express- It has been asked, Why have the instructions ly to remove that doubt, yet it had been gravely not been produced, if any existed? The call had and earnestly contended that the Secretary was been only for copies of authorities; the instrucnot authorized to apply any part of that money to tions may have been verbal. The Secretary, in the purchase of stock; that it was done without his Report on Loans, informed the House "that, the sanction of the PRESIDENT; and that Congress, "besides the first general instructions, the trust until the late call for information, were totally ig-"reposed in him was to be regulated by subsenorant of the application of any part of it to that " quent and occasional directions." A motive object. very honorable to him might be assigned for his not bringing forward the PRESIDENT's instructions as a cover. Relying that the province of the House was to examine into the effects of measures, their conformity to law and the public good, and that the necessary Executive instructions were to be presumed, the Secretary had evidently chosen to implicate the PRESIDENT as little as possible.

This was done. It was indeed remarkable that all the points now raised as objections were made known in the report, before alluded to, of February, 1791, as things done or intended. No objection was then made or dreamed of.

There was, then, the fullest and most satisfactory evidence of the privity and concurrence of the PRESIDENT in confirmation of the evidence resulting from official relation. Between the Chief Magistrate and his immediate agents either a general discretion or instruction must be presumed, because it is presumable he will do his duty, and punish where either a discretion has not been allowed, or instructions have not been given, or The order requested the PRESIDENT to lay bewhere those instructions have been contravened. fore the House copies of the authorities directing The argument on the other side implies in the the application of the moneys borrowed. It was Chief Magistrate either ignorance or neglect of evident that the PRESIDENT construed this order duty. On the one hand, that he was unacquaint- into a call, not for the instructions from him to ed with the transaction; or, on the other, that, the Secretary, but for the instructions from the being acquainted, he acquiesced in a violation of Secretary to his agents; because, in the report law, without removing the transgressor. Could made in pursuance of that order, the Secretary it be seriously said-would it not be absurdity to presents, by order of the PRESIDENT, his own letsuppose that an operation of such extent, provid-ters to Messrs. Short, Willink, and Van Staped for by law, communicated to both Houses, no-horst, as the authorities to apply the proceeds of torious to all the merchants of Philadelphia and the loans. It followed, therefore, that the paper New York, as that of drawing and selling the bills relied on was not intended to be given as the only on Europe, was unknown to the PRESIDENT? instruction respecting the application of the loan. Must he not have been well acquainted with these The inference from it was consequently erronetransactions, and that without daily frequenting ous. The PRESIDENT could never conceive that the coffee-house, as some of his friends lately ad- the House meant to call for his private instrucvised him? If the instructions or the intentions tions from time to time imparted to his immediof the PRESIDENT had been contravened, would ate agent under the words of the resolution. That he not have vindicated his own authority by re-link must have been presumed. He therefore dimoving the officer? But it had been objected that the bills were drawn previous to the sanction of the Legislature by the confirmatory act of March, 1791. Admit the fact, and there was nothing reprehensible in it. It appears, from the first general instructions to Mr. Short, in August

rected a transmission of the authorities from the Secretary to his agents.

to

But what has the want or breach of instructions do with the breach of the law? Suppose no instructions given, or the instructions not pursued, and yet suppose the law to have been completely