Chapter XLVII: Introduction (46)

Mr. BARNWELL.--Mr. Chairman, before I proceed to discuss the observations which yesterday fell from the gentleman who introduced the resolutions now before us, I cannot refrain from saying that I am extremely happy that, in passing through the medium of that gentleman's examination, this subject has changed its hue from the foul stain of peculation to the milder coloring of an illegal exercise of discretion, and a want of politeness in the Secretary of the Treasury. I feel happy, because I always am so when any man charged with guilt can acquit himself; and the more so now, when a man in a high responsible office, and high in the estimation of his countrymen, can reduce a charge from a quality calculated to have excited an alarm, even in Pandemonium, 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 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 modify the debt in the manner most conducive to 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 any where, 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 consider 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 despatch, applied to pay the principal and interest due to France; for where the payments are to be made is certainly left to the Secretary. If this has not been exercised advantageously, this is another circumstance which the gentleman himself has not questioned. But, says the gentleman, the Secretary, under these instructions, had no special authority to draw; notwithstanding which, he began to draw in 1790, and has continued to draw, at different times, into this country the enormous sum of three millions of dollars, and therefore he must have done this without, nay, against the instructions of the PRESIDENT, who, it is presumed, having delegated this great trust, has never, for three years, inquired into the performance of it. Can this be the inference of common 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 for us to come in aid of the PRESIDENT, he who by our law has the power, which we ourselves cannot exercise, of removing any of the Executive officers at pleasure? It certainly cannot be necessary; for, as this officer continues to act, we must conclude that he has either acted by instructions, or in such manner as to have given satisfaction to his principal without them. Really, Mr. Chairman, I cannot but believe that if suspicion had not led the gentleman from Virginia astray, the usual correctness of his understanding would have prevented him from pursuing such an _ignis fatuus_ as this.

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 would concur in the sentiment, that in a government constituted like that of the United States, which had nothing but the public confidence for its basis, premature alarms and groundless suspicions respecting the conduct of public officers were pregnant with the most injurious consequences. This opinion was more peculiarly applicable to the important station of Secretary of the Treasury. Intrusted with the management of a large revenue, and necessarily clothed with some latitude of discretion, it was to be expected that he would excite the jealousy of the public vigilance; but as long as he kept in view the injunctions of law, and the public good, his reputation was entitled to that security which is due to every citizen.

An officer, intrusted with the care and distribution 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 tranquillity 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.

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; notwithstanding 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.

Mr. S. proceeded next to examine the charge under consideration. It consisted of two items: the first, the application of a certain portion of the principal sum borrowed in Europe to the payment of interest falling due upon that principal, which it was contended was not authorized by any law; the second, the drawing part of the same moneys into the United States, without the instructions of the PRESIDENT.

The first item of this supposed violation of law appeared of so frivolous a nature that it did not merit much discussion; at any rate, it was more an objection of form than of substance. If he comprehended well the purport of the charge, it was nothing more than this--that the Secretary having moneys at his disposal in Europe applicable to the purchase of stock in this country, and having at the same time moneys in this country applicable to the payment of the interest abroad, had substituted the one for the other. He had paid the foreign interest out of the foreign funds, and he had purchased stock with the domestic funds. This was the heinous offence with which he was charged, and which was thought sufficient to remove him from office. If the moneys in Europe might have been drawn to this country by bills, for the purchase of the debt, it might have equally been drawn here, by ordering the application of a sum in Europe, for a purpose which would be represented by an equal sum here, to be applied to the purchase. The substance, not the form, is to decide whether this mode of negotiating the matter was proper. Suppose bills had been ordered to be drawn on the commissioners, and remitted to them on account of the foreign interest, would not this have been as regular as to draw them for sale? Did the execution of the law require that the Secretary, having funds in Europe with which the foreign interest might be discharged, should nevertheless remit moneys abroad for that purpose, and then, having funds in this country with which the purchases of the debt might be made, should draw bills to bring the foreign funds here? Was there any necessity for this complex operation, for the expense of remittance, the probable loss on the sale of bills, the loss of interest while the money was _in transitu_, when the whole matter could be negotiated by the simple and economical mode pursued? So far from this arrangement being a ground of censure, Mr. S. asserted that, had the Secretary pursued the other mode, he would have been animadverted upon with great severity for such an extraordinary course. He would have been accused of ignorance of his duty, and every loss incidental to the transaction would have been charged to his account.

The second division of the charge, being of more magnitude, required a more lengthy discussion. This instance of violation consisted in a supposed deviation from the instructions of the PRESIDENT, or a supposed acting without any instruction whatever. It was, however, begging the question; it was taking for granted that which did not appear, and which ought not to be presumed. And here, Mr. S. observed, the gentlemen on the other side had entirely reversed one of the fundamental maxims of criminal jurisprudence, which declared that innocence should be presumed and guilt proved; whereas they had presumed guilt, and called upon the accused to prove his innocence.

And what was the slender basis on which the presumption was built? Why, say the gentlemen, the instructions from the PRESIDENT to the Secretary, which have been laid before the House, relate only to the payment of the French debt, and convey no authority to draw any of the foreign loan into this country for the purchase of stock; and hence they infer, he had no authority for this latter purpose.

To comprehend the fallacy of the inference, it was only necessary to recur to the laws, and to the PRESIDENT's commission to the Secretary to negotiate the loans. Two acts of Congress had passed; one on the 4th of August, the other on the 12th of August, 1790. The first authorized a loan of twelve millions of dollars, applicable to the payment of the French debt; the other, a loan of two millions, applicable to the purchase of the domestic debt. The PRESIDENT's commission to the Secretary embraced both acts and both objects, and under that commission one loan was negotiated applicable to both objects. True it is, that the PRESIDENT's first instructions were confined to one object, namely, the French debt; but the inference is not that no other instructions were given, and that the Secretary acted without authority; but the very reverse, that the PRESIDENT either left the other object to the general discretion of the Secretary, who was, _ex officio_, the proper agent and his representative; or that he reserved it for subsequent and occasional instructions.

This inference must be the true one; first, because a contrary supposition would impute to the PRESIDENT an illegal intention, that of applying all the moneys borrowed under both acts to the object of one only; secondly, because the commission extending to the borrowing fourteen millions of dollars, and embracing both objects, and the instructions being confined to twelve millions of dollars, and to only one object, it followed that the other either was left to discretionary management, or to after regulation, for the law enjoined the execution of both.

If presumption, then, was to govern, the more natural presumption was, that the officer acted according to some general discretion reposed in him, or according to instructions from time to time given. These instructions may have been verbal, as well as written. The written instructions given in the first instance were evidently confined to the object of the first act. The necessary conclusion is, that the application of the moneys borrowed under the second act was not meant to be included in that instruction, but was left to be regulated by a general discretion, or by occasional directions, verbal or otherwise.

Having gone through this resolution, Mr. S. observed, that, if there was as little of criminality in the subsequent charges as in that which he had just discussed--and from an attentive examination he sincerely believed it--he was satisfied that, notwithstanding all the severe animadversions within, and all the virulent calumny without, the walls of Congress, the conduct of the Secretary would come forth chaste and unblemished. Instead of any thing being detected which would disgrace Pandemonium, nothing could be chargeable to him which would sully the purest angel in heaven. Whatever difference of opinion might exist as to the wisdom and benefit of his measures, he was confident in saying, that in every thing the Secretary had done, he had been guided by principles honorable and patriotic, and he trusted that a very great majority of the committee would, by their votes, evince the same sentiment. The sword of justice, it was said, ought at times to be taken from its scabbard to keep great public functionaries within the pale of the law; but it should be remembered that if Justice had its sword to punish the guilty, it had likewise its shield to protect the innocent. If the Secretary had committed a wanton violation of law, let the sword be drawn forth for his punishment; but if he has pursued the dictates of an enlightened patriotism, the committee were called upon to raise the shield for the defence of a faithful officer.

Mr. FINDLAY addressed the Chair as follows:

Mr. Chairman: Being strongly impressed with the importance of our time, which is now so near an end, though I had the honor of seconding the resolutions, I took no part in the debates of yesterday; nor will I now detain you with replies to many of the arguments which have been offered against the resolution now under discussion.

Upon one argument frequently introduced by the gentleman last up, viz: the greatness of the Secretary's character, &c., I will only make a single remark. There is no character officially known in Executive departments of this Government, who merits pre-eminence, or to whom a degree of greatness can be ascribed, but in proportion to his prompt execution of the laws, and the attention with which he discharges the duties of his office. From this rule, the PRESIDENT himself is not exempt, much less a subordinate Secretary, whose appointment is during pleasure, and the duties assigned him of a changeable and temporary nature. But to come to the resolution before us. The first questions that offer themselves, are: Was the money in question appropriated to special and distinct purposes? Did the Secretary of the Treasury apply the money to other uses than the law directed?

In answer to the first, it is only necessary to advert to the law authorizing the loans. The law authorizing the twelve million loan, appropriates whatever amount may be borrowed solely to the payment of debts then due to France and Holland. The law authorizing the two million loan directs the application thereof to the redemption of the domestic debt, in aid of about ---- dollars, arising from the revenues previous to the 1st of January, ----. These appropriations are precise, distinct, and unconditional. With respect to the uses, no room was left for the exercise of discretion. The will of the Legislature was express and clearly defined; it left no room for evasion, nor any excuse for mistake; nor did the PRESIDENT transfer to the Secretary any other authority or instructions than what the law expressed.

But the gentleman from South Carolina says, that the presumption is, that the PRESIDENT did give other instructions than he has communicated; that, in this case, presumption should be admitted as conclusive testimony, and that neither the Secretary nor the PRESIDENT is obliged to communicate the instructions or authority to us. The gentleman is a lawyer: I will appeal to himself; I will appeal to all the professional members on the floor, whether presumptions can be admitted as proof, where, in the nature of the case, positive testimony can be procured. Surely, in courts of justice, positive testimony is always required, and presumptive is rarely admitted; but in this case, the presumptive is by the gentleman set in opposition to the positive. However, this is not the case in fact. The PRESIDENT did give commission and instructions, and those are fully communicated to us. If he conceived we had no right to demand them, he would have told us so; if he had kept any part of them back, he would have informed us, and assigned his reasons for doing so. I presume that the PRESIDENT has acted the part of a candid, honest man; the gentleman presumes the reverse. The suggestion that this House, which has the exclusive right of originating the appropriation of money, has no right to be informed of the application of it, is so novel and extraordinary, so inconsistent with every idea of propriety and good government, that it requires no reply.

Did the Secretary apply the money borrowed in Europe agreeably to the legal appropriations and the instructions of the PRESIDENT? No, he did not; though some of the gentlemen do not acknowledge this, yet the Secretary has clearly acknowledged it himself, and has filled his reports with labored and ingenious apologies for so doing. He has suggested a variety of motives, and taken infinite pains to charm us with the mighty public advantages resulting from his doing so. He acknowledges combining the loans, and directing the application of them, in the very offset, in a way contrary to law; he acknowledges having drawn to this country, and applied in Europe, to uses for which other moneys were appropriated, near $3,000,000. Out of this he has paid upwards of $400,000 of the French debt, to St. Domingo. I do not complain of paying the interest due in Europe out of the money drawn here. The gentlemen apply the force of their arguments, with great attention, to support or apologize for this part of the Secretary's conduct, as if against this only the charge in the resolution lay. But we do not object to applying that money in Holland, which ought to have been brought here, if the money which, according to the appropriation, should have gone to Holland, had been put to the use here for which the other was intended. A simple exchange of money for the purposes of conveniency or economy, is properly one of those cases to which ministerial discretion may safely be extended; but the question before us is, the money has not been replaced. The amount of money has not been applied to the uses intended; consequently, the appropriation has been disregarded. It is acknowledged that though there were upwards of $1,300,000 of the Domestic Sinking Fund, and upwards of $2,300,000 drawn from Europe, besides the moneys applied to the relief of St. Domingo; yet, when these inquiries began, there was not $1,000,000 applied to the redemption of the public debt, and even yet the whole of the domestic appropriation has not been applied to the Sinking Fund, notwithstanding that the public debt is now, and has for some time been under par. We have it on record that the Secretary never informed the commissioners of the drafts he made on Europe, although the fund was exclusively to be at their disposal.

Mr. GILES rose.--He was sensible that he stood in a peculiarly delicate situation, in which nothing short of the public good could have induced him to place himself. If a public and highly responsible officer had violated the laws, it was necessary that he should be called to an account for it; and to determine whether in the instances before the House, he had been guilty of that violation, it is necessary to compare the testimony with the facts alleged in the resolutions before the committee. He first adverted to the law authorizing the PRESIDENT OF THE UNITED STATES to borrow twelve millions of dollars for the purpose of paying the foreign debt. On this, he remarked that the authority of borrowing was expressly given to the PRESIDENT, no doubt, with an eye to the personal virtues of the character who fills that office; the loan is also directed to be made solely for the purpose of paying the public debt. Here he remarked, that in every appropriation law, the appropriation is always emphatically mentioned, which is an evidence that the Legislature intend to remain the sole judges of the applications of money. He read a letter from the Secretary of the Treasury, who was employed by the PRESIDENT to negotiate this loan, to Mr. Short, the Secretary's foreign agent for this purpose, dated the 9th of May, 1791, in which the Secretary informs Mr. Short, that one million and a half of the money he had obtained on loan, was destined for France; of which sum he was authorized to apply immediately one million, but to reserve eight hundred thousand florins to answer such subsequent directions as he should receive from the PRESIDENT. He cited this passage to show that the million and a half which had been obtained on loan, was destined for France.

To remove any doubt that might remain upon this head, he referred to a preceding letter from the Secretary to Mr. Short, dated the 13th of April, in which it is also expressly said, that of the two millions borrowed, one million and a half is intended for France, the remaining half million to wait for further directions. Having established this point, he adverted to the resolution before the committee, which says, that he applied a portion of the principal borrowed to the payment of the interest falling due upon that principal, without being authorized so to do by any law. To show this, he referred to a report of the 3d of January, containing sundry statements respecting foreign loans. That part of the report to which he alluded in proof of the fact, stated in general terms, a sum paid on account of foreign loans, and this sum was taken from the principal borrowed, and amounted to 1,833,189 florins. If his statement was accurate, the fact he wished to establish was proved. He wanted more light, he confessed, than he could collect from the Secretary's official communications. He should not go into the examination of what circumstances might have induced the Secretary to deviate from the positive injunctions of the law, or to make any remarks upon his conduct, until he had heard what gentlemen would say to controvert the fact he wished to establish.

Another fact of consequence he wished to prove, viz: that part of the money obtained on loan in Europe had been drawn over, though not wanted here for any public purpose. This appeared from other papers. He turned to the instructions from the PRESIDENT to the Secretary of the Treasury, authorizing him to borrow $14,000,000, in which the Secretary is cautioned to keep in view the two several acts authorizing the loans, and the distinct conditions they contemplate. By the instructions of the PRESIDENT, the Secretary is authorized to apply the moneys. In the execution of the trust confided to him, the PRESIDENT generally directs him to employ Mr. Short to negotiate the loans, to borrow in the manner prescribed by the acts, and to discharge immediately the arrears of interest due to the French, to which purpose and to the complete payment of that debt the twelve million loan was altogether appropriated. If this money, then, was shown to have been drawn here, it was neither warranted by law nor by the PRESIDENT's instructions. The Secretary did begin to draw as early as 1790, and had continued to draw from time to time, till 1793, without giving notice of this to the Legislature. Having shown that the Secretary had drawn without authority to draw, he next proceeded to consider the purpose of those drafts.

The money thus drawn for was not, he stated, applied to the purchase of the public debt. No money obtained from foreign loans was thus applied until this year; the domestic resources appropriated to this object were never exhausted. These were the facts involved in the first resolution, which he wished to establish. Before he proceeded further into the discussion, he wished to hear what gentlemen had to say to controvert them. He wished to see justice done in the matter before the House; he wished justice, also, to be tempered with moderation and mercy; and if gentlemen could show the necessity for deviations from positive law, which he had endeavored to point out, it would exonerate the Secretary from a very great share of blame.

Mr. BARNWELL called for the reading of certain parts of the two acts authorizing the loans. One of the 4th of August, authorizes a loan of $12,000,000, to be obtained without limitation as to the interest, for the purpose of paying the foreign debt; the other is of the 12th of August, for $2,000,000, the interest to be not more than five per cent., and for the purpose of reducing the domestic debt.

Mr. SEDGWICK, to disprove that the drafts alluded to have been made without the knowledge of the Legislature, called for the reading of the PRESIDENT's Speech to both Houses on the 8th of December, 1790, and a subsequent report of the Secretary of the Treasury to the same point. By this, it appeared that the power of borrowing, having been exercised under the joint authority of the two acts, the Secretary states a difficulty that had occurred to him on the subject of the drafts alluded to. The money having been obtained on an interest of five per cent., exclusive of douceurs, he wished the Legislature to determine whether it might strictly be considered as borrowed under the second act, which limited the interest at five per cent. This was sufficient, he conceived, to show that the Legislature were not ignorant of those drafts, and an act was passed solving the Secretary's doubt, and sanctioning his construction of the law.

Mr. GILES remarked that he had drawn before that sanction was obtained.

Mr. FITZSIMONS observed, on the first charge in the resolution, that, as the interest of the money borrowed in Europe is payable where borrowed, it was economical in the Secretary to pay that interest with moneys there, which were to be drawn here, and replace the sum by taking the amount from the funds here destined for that payment. A financial operation of this nature is simple, and saves the trouble of drawing with one hand and remitting with the other. He conceived there was no just foundation for the first charge.

Mr. LAURANCE said, that when the resolutions calling for information from the Treasury Department were first brought forward, the public mind was impressed with an idea that there were moneys unaccounted for. This charge is now dropped, and it is honorable to the officer concerned that, after much probing, nothing is found to support it. The inquiry now is, whether a debt was paid out of this or that fund. He did not admit the fact, that it was paid out of any other moneys than what law strictly warranted. He went into a history of the subject from its origin. He stated the nature and purposes of the loans. There was nothing to prevent the PRESIDENT from consolidating the two loans, provided such an arrangement did not interfere with the purposes intended by them. The PRESIDENT employed the Secretary to obtain the loans under the joint authority of both acts, as it was found that the object could best be carried into effect by such an arrangement. The money thus borrowed became subject to the appropriations of both acts, and not exclusively for the payment of the foreign debt. Then, as part of that money was subject to be drawn here for the redemption of the domestic debt, and the interest of the loan was to be paid with domestic funds, it was perfectly reasonable to avoid further drafts and remittances to pay the debt there with money there, and replace it here with money already here. The fact stated in the first part of the resolution is, by this plain statement of the case, substantially refuted, and appears altogether unfounded; but if the fact is proved, what is implied? No injury to the interests of the community; the intention of the Legislature has been in every point fulfilled. If the Secretary had acted differently, he would have been guilty of an absurdity, and to blame for sacrificing the public interest and neglecting the spirit of a law for a strict and unprofitable observance of its letter.

Mr. SEDGWICK, by adverting to the Speech of the PRESIDENT and Report of the Secretary, had shown that the Legislature had been made acquainted with the drafts, and sanctioned future ones on the same principles. The latter part of the first resolution criminates the Secretary for making them without instructions from the PRESIDENT. Even if this was the case, he did not know whether this was really reprehensible. He defended it on the ground, that the Secretary is the officer appointed by law to superintend the finances and apply all moneys agreeably to appropriations. He took a view of the subject, as stated by Mr. LAURANCE, and concluded by asking, whether, if the Secretary was found, on a critical examination, to have deviated in a trifle from the letter of the law, such a deviation was sufficient to warrant the alarm's being sounded from St. Croix to St. Mary's, and whether the precious time of the House, at the close of the session with a vast variety of business on their hands, should be taken up in so unprofitable and frivolous an investigation?

Mr. GILES said, the transaction alluded to by the gentleman to controvert the fact laid down in the first part of the resolution before the committee was not immaterial, as they had endeavored to show it. It was not merely a financial operation to avoid the necessity of drawing and remitting. The truth was, that the Secretary had drawn over nearly $3,000,000. The PRESIDENT's authority was limited to $2,000,000.

Mr. LAURANCE was of opinion, that if the PRESIDENT, or his agent, had drawn the whole amount of the money obtained under both loans, he could not be said to have gone beyond his authority. He was authorized to borrow $12,000,000 to pay the arrears on the foreign debt, and to modify the whole. In the execution of this trust, he might have found it advisable to draw to the country the whole of that sum. It had been found advisable to draw for part, and to pay the French by shipping produce to St. Domingo. If the money expended for supplies to St. Domingo is deducted, the balance will be found less than $2,000,000.

Mr. L. contended, that the interest of the moneys borrowed was not paid out of the principal of the loan, as set forth in the first charge of the resolution before the committee. If gentlemen would attend to the history of the transaction, they would find this strictly true. This interest was paid out of the moneys borrowed for the reduction of the public debt, and not out of those intended to pay the French, and the funds appropriated for the payment of that interest were here to replace the former and be applied as those were appropriated. He referred to the PRESIDENT's Speeches at the commencement of the two last sessions, to show that the loan was obtained under the joint authority of both acts; and adverted to the act of Congress, in consequence of a doubt suggested by the Secretary, explaining that the moneys first obtained might be considered as borrowed under the act authorizing the two million loan. Having shown the first charge in the resolution to be unfounded, he turned to the second.

The Secretary is accused of drawing moneys to this country without instructions. In this transaction the PRESIDENT must be considered as the principal, and the Secretary the agent, or the Secretary must be looked upon as the principal. If the PRESIDENT is the principal, and he be authorized to obtain the loans, as soon as the money is obtained it naturally falls under the direction of the financier; but if it be contended that the PRESIDENT was to have applied the moneys as well as to borrow them, then we have nothing to do with the agent; that agent is accountable to his principal, and as this principal is not called to an account by the Legislature for any improper exercise of discretion, he must be considered as having acted strictly within the law. If the Secretary is considered as the principal, (and by a strict attention to the law, he believed, it would be found so, for the PRESIDENT is by it authorized to borrow, and it is not expressed who shall apply the money,) then it was not one of the duties of the Secretary to procure the instructions of the PRESIDENT; being the principal, and consequently having the direction of the money borrowed, he is made the judge of the time of drawing, to fulfil the intention of the law. Was the money, he asked, to have remained in the hands of the banker in Europe? Since it was borrowed for the purchase of the public debt, the sooner it was drawn over the better, and the Secretary having the direction of those moneys, could do it without consulting the PRESIDENT. He proceeded to show, however, that the Secretary had by no means acted entirely without regard to the PRESIDENT's instructions. His letter to Mr. Short, which had been read, expressly says, that he is waiting for instructions from the PRESIDENT, and the only instructions brought forward clearly show, that he did not act without them. On this occasion it was not necessary, he conceived, that all the private communications between these two officers should be brought forward; indeed, many of the instructions might have been verbal, and of a private nature. Another proof lies before the committee, to show that the Secretary did not act independent of instructions. A report of the Secretary mentions that some matters relative to the loans were under consideration of the PRESIDENT OF THE UNITED STATES. This document, the gentlemen were in possession of when they framed the resolutions; and it, in his opinion, left very little ground indeed to suppose that the Secretary had acted without instructions.

Mr. MERCER next rose. None of the communications from the Secretary of the Treasury had removed his suspicions relative to the transactions of that department. What had fallen in the course of the discussion, had not removed his doubts. He confessed himself more at a loss than ever to account for the conduct of that officer. To judge of the propriety of his conduct, it was necessary to consider what his duties are, and investigate whether a necessity existed to justify the drawing complained of. Gentlemen, in their arguments, had alluded to some observations that had fallen from him on other occasions expressive of his opinion, that there had been corruption in that department. This opinion he still entertained. He suggested that some irregularities had taken place as to the money appropriated to the Sinking Fund. This might be the fact, and his suspicions were sufficiently urgent to warrant him in suggesting that it might be possible. At the close of 1792, he stated there was a balance of cash in the Treasury of $2,331,182, and the bonds due in the course of the present year would produce a sum of about $2,269,000. Yet a proposition was made in the House, predicated on a total want of money in the Treasury, to borrow $800,000 in addition to the $400,000 already borrowed of the bank.

[Here Mr. BOUDINOT interrupted the member, as being out of order. The Chairman, conceiving Mr. MERCER's remarks to be introductory to, and connected with the observations he intended to make on the resolution, declared him in order.]

Mr. MERCER proceeded to show, by sundry statements and calculations, that there was no necessity for this loan of $800,000. The House, he said, to discharge their duty, should be satisfied how the money appropriated was applied, before they consented to repeated additional appropriations. When calls for information had been made by the House, with a view to comply with this their indispensable duty, the Secretary had thought it sufficient to balance money actually received, by calculations of sums that would probably be wanted agreeably to appropriations. Were dollars, he asked, to be balanced by absolute appropriations? Can things certain be balanced by things uncertain? Actual expenditure would alone balance actual receipt. Appropriations founded only on uncertain calculations could not show the money actually laid out. He adverted to some calculations made to ascertain the probable expenses of the War Department.

[Here the member was again called to order, and was declared out of order by the Chairman.]

Mr. M. confined his observations more immediately to the resolution before the committee. It had been said, that the interest paid was paid out of moneys that were to be drawn to this country, and were replaced here by funds from the domestic resources originally appropriated for that object, and that the dead letter of the law, if any part of it, had alone been violated. He contended there had been an essential violation.

The sums drawn for and appropriated to reduce the public debt, were not applied to that purpose; the domestic resources appropriated to that object, never were exhausted. If this is the case, conclusions surely unfavorable to that officer must naturally follow.

He proceeded to make some remarks on the question, whether the Secretary had acted under instructions from the PRESIDENT. It was disagreeable, he premised, to criminate the character of any officer. He bore a great respect for the PRESIDENT, for his virtues, talents, and services, but however grating to his feelings it might be to find fault with any part of his conduct in this matter, he was unable to discharge his duty under his present impressions, unless he avowed that he conceived that officer had violated the law, though he allowed, without intention, by not inquiring into the subject, while transacting, as it was his duty to do. He must declare that he saw no proof that the Secretary had acted under the PRESIDENT's instructions. On the contrary, he saw the reverse, there was even no presumptive proof of the fact. The House has called for information as to the extent of the authority delegated by the PRESIDENT to the Secretary. Either the Secretary has produced the proof of this authority, or he has not complied with the order of the House; it does appear that he has gone beyond it in making the drafts complained of. The PRESIDENT directed that the proceeds of the loan be immediately applied to pay the French; yet a great portion of that money was brought over here. It was said that he might have brought the whole here if he chose and paid it to the French here. This argument goes on the presumption that the PRESIDENT might do wrong without incurring blame. But the PRESIDENT expressly directed it to be paid immediately to France; and the House had no right to presume that he did direct the money to be drawn here, when proof to the contrary appears. Upon the whole, he concluded that the law had been broken in letter and substance, and that the Secretary had acted without proper instructions from the PRESIDENT.

Mr. LIVERMORE observed, that the charge against the Treasury Department was at first well calculated to beget serious alarm. When misapplications of the public money are sounded in the public ear, all feel interested, knowing, that what affects the public purse, must in a degree affect the purses of each private individual. In the present stage of the subject, he was happy in being able to felicitate himself and his fellow-citizens, that even should the whole of the charges contained in the resolutions be proved, it would not appear that they had lost a farthing by the conduct so loudly complained of. What is the charge? That the Secretary has paid an interest that was justly due; why then, he presumed we should not have it again to pay. If the Secretary has paid what was due, what then is the complaint? It was surely not intended that it should not have been paid. This was not the intention of Congress; for they passed an act providing funds for its payment. The Secretary was then right to pay it. But, it is said, he paid with the wrong money. He saw no harm in not paying it with the very dollars appropriated, and approved of the operation, which saved drawing with the one hand and remitting with the other; in this there was no crime committed, no loss incurred. It appears, on the contrary, that something was gained by it. So far, then, he was clear, no law had been violated, nor was any rule of propriety departed from. He then touched upon the Secretary's disputed right to draw. He contended, that he had that right. The loans were obtained under the joint authority of the two acts. It was said that more than two millions, the amount appropriated for the Sinking Fund, were drawn over; but, he insisted, he might have drawn the other twelve millions, if it had been for the public interest so to do. The French wished to be paid here, and it being no loss, but rather a profit, to comply with their wish, where was the harm in so doing? If any public loss had been incurred owing to these drafts, then blame would lie. He concluded, by expressing his hearty approbation of the conduct of the officer who is criminated by the resolutions, and declared it as his firm intention to give them his negative.

Mr. HILLHOUSE argued, that the interest paid, was not paid out of the $2,000,000 loan, and that the drafts were made agreeably to the directions of the PRESIDENT. He showed this by the documents which had been already referred to. He put in a clear point of view the propriety of avoiding the expense and risk of drafts and correspondent remittances, and concluded by giving his approbation to the conduct of the Secretary in the transactions complained of, and by expressing it as his firm belief that a majority of the committee, from the evidence before them, would undoubtedly be of opinion that the charges brought forward are unfounded.

Mr. SEDGWICK rose to correct a mistake of Mr. MERCER's. The gentleman had asserted, that the Secretary had drawn on Europe, before the loan, obtained by the commissioners under the old Government, was ratified. This was not the case. The loan had been ratified in pursuance of the provisions of the act authorizing it. The PRESIDENT in his Speech, December 8, 1790, says, "that agreeably to the powers vested in him at the last session, the loans in Holland had been completed."

By existing acts of the Legislature, and from express communications from the Secretary of the Treasury, it appears, that all the moneys borrowed were deemed borrowed under the joint authority of both acts, and not to be solely appropriated for the payment of the foreign debt.

Mr. MERCER explained, that he had said, that the Secretary had drawn from the loan obtained under the authority of the old Government, before said loan was legalized by law. If the Legislature had the right to legalize it, they had the right to reject it.

Mr. LEE next rose. He observed that as he found himself under the necessity of differing from his friend who had moved the resolution, with whom he generally agreed in opinion, and was accustomed to act, he begged the attention of the committee for a few minutes. To determine whether the Secretary of the Treasury had acted legally, it was necessary to examine whether the authority from the PRESIDENT and his subsequent instructions authorized him to consolidate the loans under the acts of the 4th and 12th August, 1790.

On this question Mr. L. observed, that there seemed to be no objection to such a construction, except that which arose from the difference of interest allowed by those acts; that the first loan was commenced without any regular authority by a company in Amsterdam; that it received its authenticity from the acceptance of the Secretary of the Treasury. The interest and douceurs on this loan amounted to more than an interest of five per cent., which was the only premium contemplated by the act of the 12th of August. It could consequently be accepted only under the act of the 4th of August, which gave no limitation to the interest which was to be allowed. The money seemed therefore solely applicable to the payment of the foreign debt. From his report of the 24th of February, 1791, the Secretary himself seemed to have had this impression; Congress seemed also to have this impression as on the 3d of March following they passed an act authorizing the application of this loan to the object of the act of the 12th of August, 1790. After the 3d of March, 1791, therefore, the Secretary of the Treasury had a right to bring this money to America for the purposes of the Sinking Fund. The interest of the foreign debt becoming due, for which domestic revenues were pledged, he thought it prudent to pay that interest out of this loan, relying on the domestic revenues to replace it for the purposes of the Sinking Fund. This was a mode of bringing the money here, and he was not limited in his discretion as to the mode; and therefore had a right to follow that which appeared to him most advantageous. The paying of the foreign interest out of this loan was made after the 3d of March, 1791.

Mr. L. had no doubt as to the legality of all the proceedings relative to moneys drawn to this country subsequent to the third of March, 1791; even the moneys borrowed for the foreign debt, because a higher interest than five per cent. was stipulated for, on any of the subsequent loans, and because the PRESIDENT, in his instructions to the Secretary, leaves the mode of paying the foreign debt to his discretion. If he judged it for the advantage of the United States to bring this money, in the first place, to America, the legality of such a measure cannot be questioned, though the economy and wisdom of it may not be admitted. On this point, Mr. L. acknowledged, that he had not time to examine minutely all the statements and reports of the Secretary to judge of those exigencies which induced the drawing of all the money which had been drawn to America.

Whether it had been consistent or not with the interest of the United States, Mr. L. was of opinion, that the Secretary had legally a right to bring all the money he had drawn for to America, except what was drawn prior to the third of March, 1791. This money was drawn out of the first loan; it was drawn, as declared, for the Sinking Fund; the first loan, for the reasons before stated, could not be applied, and consequently, till the act of the 3d of March, 1791, this money could not be legally drawn for the Sinking Fund. Perhaps this act caused the irregularity of this proceeding.

But is not the Secretary of the Treasury subject to blame? Mr. L. observed, he thought he was not altogether free from it. At the meeting of Congress on the 8th day of December, 1790, the PRESIDENT in his Speech informed both Houses, that the first loan had been accepted, and that the Secretary of the Treasury had directions to lay the particulars before them. But what did he do? On the 15th of December following, he began to draw money on account of this loan to America, for the Sinking Fund; though from his report on the 24th of February, 1791, he appears to have had a doubt as to the legality of this proceeding. He delayed giving information, in conformity to the PRESIDENT's Speech, till a few days before the dissolution of Congress. This conduct, Mr. L. said, seemed to argue a distrust of the Legislative Councils. Mr. L. dilated on the necessity of the purest and most confidential communication between the Secretary of the Treasury and the Legislature, and said, though he could not agree to the resolution then under consideration, there was one, subsequent to it, relating to this point, which he was sorry to find himself under the necessity of voting for.

Mr. BOUDINOT considered it as the duty of the committee in the discussion of the charges brought forward to confine themselves strictly to the points in question. The present examination differed from ordinary Legislative business. Specific charges are brought forward against a highly responsible officer; the facts brought forward to support those charges should be understood and considered, to form a right judgment on them. The Secretary is charged with having violated a law, by paying the interest due on a loan out of the principal of that loan. He went into some statements and calculations to show that the money paid on account of foreign loans, as stated in official documents, could not have been paid on account of interest of the late loans, from the disproportion of the sums.

He need say nothing more, he conceived, to show that the first charge in the resolution immediately before the committee is unfounded. If what he said was not sufficient to disprove it, he asked where is the evidence to support it?

He next turned to the second charge in the resolution, viz: that the Secretary had made the drafts complained of without the PRESIDENT's instructions. Here he noticed a mistake some gentlemen had fallen into, when speaking of the call of the House for information. This was a request to the PRESIDENT, and not an order to the Secretary. From the information communicated in consequence of this call, it did not appear that the Secretary had acted without, or contrary to instructions, and he insisted, that he ought to be presumed innocent till he was proved guilty.