/ ' / / 1 '-T/.y.. ytc A *'fii A NATIONAL PAPER, PUBUSHfcD WEDNESDAYS AND SATURDAYS BY JOHN FEMO, No. 3 fUTH. STREET, PHI lAD hi PHIA [No. 84 of Vol. IV.] CONGRESS. HOUSE or REPRESENTATIVES. FRIDAY, March 1. in committee of the whole, Mr. Mahleuberg in the chair, on the Jd, 4fh, Jt'h, 6th, 7th, and Bth refutations, refpeftiiig the official conduit of the Secretary of the Treasury, for which fee Gazette of the 6th iit'ft. (CONTI N U IB.) MR. LEE observed, that as he found himfelf under the neceflky of differ ing from his friend who had moved the re foiution, with whom he generally agreed io opinion—and was accu domed to ast, lie begged the attention of the committee for a few minutes. Mr. Lee ohferved, to deteimine whether the Secretary of the Tieafury hadafted legally, it was necessary to ex amine whether the authority from the President and his fubkquent inftruftlons, authorized him -to confolulatf the. loans under the acts of the 4th and 12th of Aug. 1790. On thisqueftion Mr. Leeobfeived that there seemed to be no objection to such a conftruftion, except that which arose from the difference of interest allowed by those acts. That the firft loan was com menced without any regular authority by a company in Amsterdam ; that it receiv ed its authenticity from the acceptance ro the Secretary of the Treasury. The in terest and douccurs on this loan amount ed to more than an interest at 5 per dent, which was the only premium contemplat ed by the ast of the 12th of August. It could confequent'y be accepted only un der the ast of the 4th of August, which gave 00 limitation to the interest which waato be allowed. This money seemed therefore solely applicable to the payment of the foreign delate From his report of the 24th of Feb. 1791. the Secretary himfelf seemed to have had this imprefli on. Congress seemed also to have had this impreflion, as on the 3d of March following they pafled an ast authoiifing the application of this loan to the pbjeft of the ast of the 12th of Aug. 1790. — After the 3d of March 1791, therefore, the Secietary of the Treasury had a right to bring this money to America for the purposes of the finking fund. The inter til of tht 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 finkinqr fuujJ. This was a mode of bringing the money here, and he was not limited in his discretion as to the'mode— and tlrcrefore had-a right to follow that which appeared to him tnoft advantage ous. The paying of the foreign interest out of this loan was made after the 3d of Marcli 1791. Mr. Lee had no doubt as to the legali ty of all the proceedings relative to mo nies drawn to this country subsequent to the 3d of March i 79 I—even1 —even the monies borrowed for the foreign debt, because an higher intereft'than 5 per cent, was ftipu laicdfor, on any of the subsequent loans, and because the President in his inftrufti ods 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 firft place, to America, the legality of kicb a meafuiecannot be questioned, tho' the economy and wisdom of it may nyt be admitted. On this point Mt. Lei ac knowledged—that he had not time to ex amine minbtely all the statements and re port? of the Secretary, to judge of those exigencies which induced the drawing of *11 the money which had been drawn 10 America. Whether it had been consistent- or not >*ith the interest of ihe United States— Mr. Lee was of opinion, that the Secre tary had legally a right to bring all the money he had dtawn for to America, ex cept what was diawn piior to the jd of Match 1791. This, money was drawn •*»—<r Wednesday, March 20, 1795. out of the firft loan; it was drawn, as declared, for the finking fund ; —the frrft loan, foi the reasons before stated, couid not be applied, and consequently, till the ast of the 3d of March 1791, this money could not be legally drawn for to the fink ing fund. Perhaps this ast caused the ir regularity of this proceeding. But is not the Secretary of the Treasu ry fubjeft to blame ? Mr. Lee obfervsd he thought he was not altogether free from it. At the meeting of Congress on the Bth of Dec. 17QO, the Presi dent in his speech informed both houses, that the firft loan had been accepted, and that the secretary of the treasury had di rections to lay the particulars before them —But whdt did he do ?On the 15th of Dec. following, he began to draw money on account of this loan to America, for the finking fund ; though from this re pott ofl the 24th of Feb. he ap pears to have had a doubt as to the legali ty of this proceeding—he delayed giving information, in conformity to the Presi dent's speech, till a few days before the diffclution of Congress. This conduct, Mr. Lee said, seemed to argue a distrust of the ligiflative councils. Mr. Lee dila ted on the neccflity 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, fubfpquent to it, relating to this point, which he was forty to find himfelf under the necefil ty of voting for. MR. BOUDINOT called the attention of the committee to the chang# in the usual ficuation of the House. They were no longer ailing in a legislative capacity, hut were now exercising the important office of the grand In quest of the nation : It was necessary he said, to aivfrt jp this circumstance, to prevent running into the diffufe mode of argument that lad im properly been adopted on this occasion. A gen tleman of this committee had thought proper to institute an enquiry int« the conduit ©f an of ficer of the government, in a very important and highly responsible station. He had exhibit ed his charges against him in writing—had re duced them to certain and fpecific fails. To these, and to these alone he had pointed his evi dence, and we were bound in honor andconfci ence to give a just and decisive opinion on each independent charge.—ln the firft place the truth of the fa<sls must be fettled and eftablilhed—if in their favour, the criminality would then neceflarily require a second confideratfon. The honor and reputation of the officer thus charged, as well as the refpe<st due to the gentleman who had brought forward the accusation. required a steady, uniform,and disinterested examination of every quel) ion from us. Under this view of the fabjefl, Mr. Boudinot said, he Ihould avoid the defuitory mode of ar gumentation that had been run into on both fides, and confine himfelf to the nature of the ladls charged, and the evidence adduced in fnp port of them. The ftiort time that yet remain ed of the session, was too precious to waits in collateral arguments, or the coniideration of merely presumptive proofs. The firft charge in the resolution now before the committee, was, That the Secretary of the Treasury has violated the law palled on t'nq of August 1790, making .appropriations of cer tain monies authorised to be borrowed by the lame law, in the following particulars, to wit: "• ift. By applying a certain portion of the principal borrowed, to the payment of interest falling due upon that principal, which was not authorised by that or any other law." " 2d. By drawing part of the fame monies into the United States, without the inftru&ion of the President." These fpecific charges make it necefTary for us to understand determinately the terms of the ait mentioned in the resolution, and the nature of the proof offered in its support. By the ait of the 4th Augufl 1790, fecft. id, —" The PreGdent of the United States i» autho rised to cause to be borrowed, a Aim or Turns not exceeding in the whole ia,600,000 of dollars; and that/m much of thii sum as may be neeeffary to the disc harge of the arrears of inteteft onloans heretofore made by the U. States in foreign countries, and the lnftalments of she principal of the said foreign debt, and sis it could be effcß tdupon termi to the United Statei,} to the paying off the whole of the laid foreign debt, be appropriated iolrlv to thefe.purpo"is, and the President was moreover further authorised tb'caufe to be made fucb other contract refpeftittg ihe ftitd debt as should be found for the interest of the laid dates." It is asserted by the prosecutor of these charges that this a& contains an emphatic appropriation 333 of (lie whole of the 11,000,000 of dollars to the payment of the foreign debt. (By a letter to Mr. Short of 9th May, 1791, read in the committee, it appears, that a loan of 3,000,000 ot florins had been made; and that one half only was appropriated to the payment of our debt to France ; and that 800,000 florin# was to be drawn to this country. This was said to be contrary to the terms of the appropri ation, and without anthority; and the Secreta ry's report of Jan. 3d, 1793, sol. j, was referred to,in proof of the fadt—"that the interest anting on the principal borrowed under this a<ft, was paid out of that principal," when by the fame law, part of the domestic jevenues of the United States, was appropriated to that purpose : The words of the report are, "payments on account of other foreign loans made and to be made to .the firft Jan. I793,inclufively. Feb. 1, 1791, 489,783, flor'ns 6 stivers, with several other payments on the lame terms, till Jan. ill, 1793, amounting in the whole to 1,833,189 florins, 1 stivers, 8 den. These pay ments were asserted to be on account of intareft on the principal borrowed, but without further proof. By the?cport,fol. 4,it appearithatonthe ift Z79o,tJwtt! was borrowed no more than 1,16] ,000 florins, on which was due tke Ift of Feb 1791, one year's interest, amounting at 5 per cmt. to 58,350 florins j but this evidence prbvis that 289,783 florins were paid on that day. Can gentlemen be serious when they as sert tlat this was for interest on this principal borrowed being almost 25 per cent, per annnm, infteaS of five. This certainly is an inattention to the fubje<S that the serious nature of the ch.irjc, cannot juftify. Ml. B. then asserted that on a critical examin ationof these itemi, they will be found to be inftahients of the Dutch loans made by the old Conjfreis; and which this money was expressly appropriated to discharge.—But lAt. B. said he did tot mean to avoid the fa&, had it been provd, but he denied that any evidenee so ita • roi'efrom thisteftimony. Tie Prcfident Was generally authorized to mafci the loans Money arising from a domes tic find was appropriated to pay the interest. It happened that this loan was made in Europe, to the amount of 3 millions of florins :—Part of it was to be drawn to this country, but before that efeMiflteteft became tine \ this was paid out of the monies intended to be drawn into this coun try, and re-paid by the fund here, to prevent the unnecessary fending the monies from one country to the other. Mr. B. a Iked, if the Secretary of the Treafu fury hid ailed otherwise, would any man in his senses have thought him worthy of the trust committed to him ? But the gentlemanhas proceeded on this charge, (and has so expressed himfelf) as if this loan was exclusively made un der the a<£t of the 4th August, mentioned in the 1 efolution before us, and therefore was wholly appropriated by law to the payment of the fo reign debt,and ought not, in any part, to have been drawn into this country for other purposes. This brings to consideration the adt of the 12th August, 1790, pafled eight days after the a eft 1 alluded to. By the 4th fc&ion of this adl, " the President of the United States is authorised to causa to be borrowed, a sum or sums not exceed ing t,000,000 of dollars at an interest not ex ceeding 5 per cent; and that the fame (hould be applied to the purchase of the debt of the United States. The difference between these a<sts was, by that of the 4th of August, the President had a discretion as to the application of she sum bor rowed towards payment of the whole of the fo reign debt over and above the inftalmentt, de pending upon terms of advantage t» the United . States. By the second ast, there was 110 discretion, the whole monies being positively direifted by law to be applied towards the purchasing of the domestic debt. By the firtl there was no restric tion in point of interest to be paid, but an in junflion that the terms of repayment should be stipulated within 15 years—By the second inter est was re drifted to J ler cent, and no terms of repayment enjoined. By the preamble to the firft law, the object of it appears to be the do ing of justice, and supporting the public credit by the payment of the foreign debt"—by that of the fecund, " the reduction of the public debt, which would be beneficial to the creditors of the union by railing the price of their stock, and be produilive of favingsto the U. States." % virtue ofthefe a&s the. President thought pro|ier to conflitute the Secretary of the Trea sury his agent to make the loans; and according ly on the 18th August I7yo, by a commission under hie hand and seal, reciting both the faid lawe, authorised him, " ty bimjelf or any other ftrfon or perjens generally, to borrow ivttlin tie V. Statu or elfnuhere,a sum or films not exceed ing in the whole 14,000,000 of dollars, subjeCt to the rellri&ions and limitations in the said fe ver&l a<9s contained. Wit h this commission the Secretary received inftru<ftions retoite to the fa id lom« in thef: words: borrow or cau e to be borrow ed, on the bill terms which (hall be found prac ticable, and within the limitations prcfiriiKd by law as to the time of repayment, and rate of in [Whole No. 406~ tereft of filch sum or funu as (h:»ll be fufficient m discharge as well all instalments orjKirH, of the principal of the foreign debt, lulnch noir arc due or (hall becnme payable to the cud ofitc year 179 I, as all interell and arrears of interest which now are or Jhall become one in ref|)*<£t to the said deb: to the fame end of the year 1791—And youjiatt "fPh or ca "fi to I" a fplied the monies which ihali be so borrowed, w'ith alt convenient dispatch to the payment ot the said iuftalments.and parts of the principal and interefi:, and arrears of the in terest of the said debt. Ton Jhall not extend the amount of the faiJ loan beyond the sum ivbicb Jhall he nrajfary for comfleating fuck payment, unleis upon terms hiore advantageaus to the United States, &c. &c. Thefc institutions related folelyto the a plica tion of the iz,ooD.ooo, the j,OOO,000 as before observed, being applied by law without any dis cretionary power to the reduction of the public debt. Under this commission it is ill proof the Secre tary caused 3,000,600 of florins to be borrowed in Europe generally, \ ♦bout exprefiing particu larly under which law, but reciting them both. He directed half of this lira to be applied to the payment of the foreign debt and part of the other naif he appropriated for the piirpbfcs mentioned towards the reduction of the publit debt. But it is insisted. that the whole of this money was borrowed, under the aift of the 4th August, and therefore if was highly criminal to apply any part of it to the discharge of the interest ariiing on the principal so borrowed,' there being ano ther fund designed for that purpose. But it has clearly appeared, that the Secretary made tliis loan in Europe, where the inteteft was to be paid and had become due ; the fund for its payment was in this countiy, and therefore if he'was authorized to draw any part of that principal into the United States, it was a mere produc tive and economical operation, to pay the filter ed there out of those monies on the fp'ot, and repay them out of nionies here, where they were to be applied and by that means present the lois, of insurance and interest, that mat have arose by any other negociation. This question then depends wholly ou the fail, whether this mo ney was borrowed by virtue of both aifts or un der that of the nth of Aug. exclusively. The loan was made at 5 per centi fubjeA to charges and douceurs of 4 and a half per cent, on the whole. The Secretary thought this within the a<sl of the ixth of August, limiting him to an interest not exceeding s per cent.—This was the opinion of others beiides the Secretary. Mr. Boudinot himfetf had been of that opinion, and at the time thought an application to the legifla tur; unngceflary. But the prudence and caution of the Secretary led him to state this fail to Congiefs for their consideration and determina tion, who by an ail of the 3d March 1791, de clared their sense of the act of the nth August, and that the loan was legal]y made under that a&. The preamble to this a A removes all doubt on this question : " Whereas it bath been htale known tv Congre/i, that tho President of the Unit ed States, in consequence of an aSi making pro viftonfor the redußian of the public debt, (this is that of the nth of August) hath canfed a cer tain loan to be made in 'Holland, on a'ccotifit of the United States, to the amount of 3 millions of florins, bearing an interest of 5 per cent.' &c. And whereas it hath been also stated to Congress, that the charges upon said loan have amounted to 4 and an half per cent, whereby a doubt hath arisen, whether the said loan be within' the meaning of the said last mentioned ads, which limits the rate of interest to 5 per cent, per an num. And whereas it is expedient that the said doubt should be removed—be it enabled, &c. that the loan aforefaid fliall be deemed and "con strued to be within the true intent and meaning of the said afl, making provijton for the reduction of the public debt, &c." This then puts an end to any dispute on this fubje'A, and if this money w >s borrowed under both a(Ss jointly or excluiively urtder the a6l of the Ilth Augud, there can be no propriety or juflice in the charge, that the Secretary had vio lated the a<st of the 4th of August, in applying part of this money to the purposes of the adt of the nth of August, under which the loan, as to a greater sum, was certainly made By this ail also the opinion of the Secretary of the meaning of the act of the I zth August, as to the reftriai on of the interest to 5 per cent, was confirmed, and of coui fe all his proceedings under it. There can then be no foundation for the charge, and it remains anliipported by proof. The next part of the accusation attempted to be lupported, was the drawing part of the fame " monies into the United States without iriflruc tions from the President." The inftruaiont from the PrefiHent As to the making the loanjß and applying th«m were only called for, he ha* therefore only reported these to the houfe—from this negative testimony it was prefumcd that no othxr iiiftriiSions have been given. This in weak support indeed, to a criminal chbrge nfthis nature. I know it has been urged by one gentleman (Mr. Mercer) that the Secretary has been called upon for the in'rudions, and if he has failed to report them to the houfc, he ought to fuffi-r—Till , ilio vs how fallible gentlemen'* memories are. Tnere tus been no cull -Whatever
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