A NATIONAL PAPER, PUBLISHED WEDNESDAYS AND SATURDAYS HY JOHN FENNO, No. 34, NORTH FIFTH-STREET, PH'ILA D&JL Pill A
[No. 85 of Vol. IV.]
CONGRESS.
HOUSE of REPRESENTATIVES.
FRIDAY, March I.
In committee of tlie whole, Mr. Muhlenberg
in the chair, on the jd, 4th, sth, 6ih, 7th,
»nd Bth resolutions, reflecting the official
conduct of the Secretary of the Trealury,
for which fee Gazette of the 6th irift.
(CONTI N U r.D.)
MR. Madison. He wilhed not, he said, to
watte a moment of the small portion of
time left, by regretting its for a
(full difculiion of the fubjeet before the commit
tee. But he thought it due to truth,and to the
honorable and inde|>endent motives of his col
league (Mr. Giles) in proposing the resolutions,
to remark that the lateness oi the day to
which they had been postponed did not juftify
the ftridhires which had been jnade on it. If
the delay was not to be con fide ted as unavoid
able, folne blame at least woukl fall elsewhere.
The enquiries in which the whole bufinei's ori
ginated, had been moved by Us colleague »nd
pafftd the house some weeks ago. The re
ports in answer to theie enquiries had not
been finally made a single day be
fore the pre'ent resolutions were fubmltted to
the bouse. He admitted that it might have
been impracticable to report the information
called for as early as was deliredby the house :
He was sensible cf the anxiety tlmt would be
naturally felt by the officer called upon, to
present every confide ration that might place
his conduct in the most favorable poiut of
view : yet with all these allowances, it was
inipoliible to deny that the reports contained
thing's which did not belong to thein,and there
fore consumed time which belonged to the pe
riod for difcufilon. He would mention one
in dance on which there could not possibly be
a difference of opinion ; viz the vindication,
formally undertaken by the Secretary, of ihe
policy of borrowing money abroad. 'Whether
this policy was right or wrong, the leLiiflature
had themselves decided in favor of it ; and it
was the duty of the Secretary in complying
with the orders'of the house, to inform the
house, how the law had been executed, not
why it had been made; to explain his own
conduct, not to juftify that of the legislature.
It had been why th© c»U svt«M~u>a
lionhad not been sooner made ? The anfiwe*
was obvious and simple. It was not sooner
perceived by the house, that there was fucli a
necessity for it. The want of information
was firft suggested by the bdl for paying two
millions of dollars to the bank, altho' 200,000
only were immediately due, and for authoriz
ing another foreign loan to the amount of two
millions. From the dawn of light thrown by
fjnie eh curaftances incident to the occasion,
on the darkr.efs in which the house had re
mained, proceeded those doubts and enquiries
which had led to the information now possess
ed. His colleague had great merit in having
brought about this devclopement. He had
rendered a service highly valuable to the le
gislature, and 110 less important and acceptable
to the public. One good etfeft of the infor
mation had been, that it prevented the pas
of the bill for borrowing 2,0q0,000 of
dollars as an anticipated payment to the bank.-
The bill had dropt from the hand of its pa
tron with the firft light that broke in upon
the house. What other meafutes would have
been prevented or varied, if a like knowledge
of our Tulwls and finances had I Ten sooner ob
tained, was matter of serious consideration.
Another consequence of the reports taken
together, was that the face of them presented
to his colleague, an evidence of the charges
contained in the resolutions. Whether at so
late a day it was heft to leave the fubjeft as
exhibited by the various documents in print,
for the examination and opinion of the public,
or to press it on the confederation of thehoufe,
V/as a point which every member had a 1 igbt
to decide for himfelf. His colleague had
viewed the portions stated in his motion, as
too important to be suspended ; and as sup-
P :)1 re( * b y such clear and authentic proofs,that
a finall portion of time would fufrce for the
fubjeA. Under this impreffton, what was his
right became his duty ; and he had discharged
it Wy
ofFe ing his resolutions to the houle.
. thfc house had refufed to commit the two
introdu&or* resolutions which ellablifhed the
r ( °f judgment to be applied to the cafe, and
the lalt also, which declared the iiifcrance to
dra\vn : the talk of the committee was li
niitted to a fiijiple enquiry into thq fads dat
ed. _ Tliey were to make out and reports
lpecial vendiftofthefe, and leave it to the
notift to pronounce the proper judgment arif
ing from then).
The refolutfon immediately before the com
mittee imported 4t that the Secretary of the
Trcufury had violated the Jaw palled on the
4th of Angust f 1790, making appropriations
©1 certain monies," frfi* 44 by "applying a cer
tain portion of the principal borrowed, to the
payment of interefton
vt u by drawing part of tiie fame monies into
the Un»ted States, without the iuftruftiou of
the President."
The qwiftions here are questions of fact;
«<id whatever quality maybe attached bvdiJ
Saturday, March 25. 1795.
ferent gentlemen to the &veraJfafts E it would
feetii as if the facts them felve.s. are too Nearly
supported by flic reports of tbp Secretary, and
the documents attending them, to be denied
or controverted.
The law of Auo;uft 4, 179% authorised the
Prehd<nt*o cause to be borrowed i;2,ooo,ooq
of dollars to lie applied to the foreign debt of
th~ United States. A fublequent law of An
guft 12, 1790, authorised another loan of two
millions of dollars, to be applied to the do
meftic debt of the United States,
A power to make these loans was delegated
on the 28th 1790, to the Secretary by
a genaral commifh'on in the uftial form, re
ferring, to the Jeveral acts above-mentioned ;
but without any farther discrimination of'the
loans to be made. As the layv however for
applying loans to the foreign object was. prior
in date, the prcfuuvptiori would rather be Chat
it was to have a priority of execution ; that
the firft money borrowed was to belong to the
firft object provided for. It was unnecelfary
however 10 dwell on this consideration, be.
cause the President had removed all uncertain*
ty by the preci'e explanations and irftru^i T
ons which aceomptmied the power to the Se
cretary, and. which oright m vnutfa to be d«« m
ed a part of the commiifion.
The inftruftion having been more than once
read to the committee, he would content him*
felf with referring to it. [The part referred
to is in the following words, il I do hereby
make known to you, that in the execution of
thejaid truJL yoU are to observe and follow
the orders and directions following, viz. Ex
cept where otherwise especially directed by
me, you lhall employ in the negociation of
any foreign loan or loans which may be made
in any foreign country, William Short, Esq.
you fliall borrow or cause to be borrowed, on
the best terms which fliall be found practica
ble, and within the limitations piefcribed by
law, as to tittle of repayment and rate of in
terest, Oich fmn or funis as fliall be fufticient
to discharge, as well all inftallinents or parts
of the principal of the foreign debt, which
now are due, or fliall become payable to the
end of the year 1791, as all interest and an,
rears of interest which now are or lhall be
come due, in refpeft to the said debt, to the
fame end of the year 1791- And you lhall
apply, or cmtjc to be applied, the monies \i hch
(hall be so borrowed, with all convenient dif
patcb, to tht payment of the said inftalments,and
parts of the principal and interest, and arrears
of interest 0] the jrid debu You fliall not ex
tend the ariiouv.t of the loan which you thai!
make, or cause to be made, beyond the fuin
which lhall be neceflary for completing inch
payment, unless it can be done upon terms
more advantageous to the United States,than
those upon which the residue of the said debt
fliall stand or be. But if the said rejidue, or
any part of the fataie can be paid off by new
loans, upon terms of advantage to the United
States, you lhall caufefudi further loans as may
be requisite to be made, and the proceeds
thereof to be applied accordingly. And for car
rying into effect the ohjtfts ar.dpurpofcs ajorefaid:
1 do hereby further empower you to make or
cause to be made, with whomsoever it may
concern, such contra# orl:ontrafts, being of
a nature relative thereto, as fliall be found
needful and conducive to the interest of the
United States."] —By this formal ast iflued
along with the commijjion to the fecretaty, the
Prelident designated the object to which the
loans to lie made, were to lie applied ; and
declared the object to be that provided for by
the ast of August 4th, 179°> be expressly plac*
ed the loan under the authority and provision
of that ast ; so that the moment the money
Ihould be borrowed, it was to stand legally ap
propriated to its fpecified object ; as much as
if another law, authorising another loan, for
another purpose, had not existed.
This arrangement of the President was the
more proper, not only because provision for
the payment of the foreign debt had been the
primary object of the legislature, and the pay
ment of the French debt, the anxious wish of
their constituents ; but because payments to
France were no longer matte? of option, but
of ftrift and positive obligation on the United
States. In proof of this, he stated, that the
debt to France, calculated to the end of 179**
and computing the livre at 5 4-10 to a dollar,
amounted to 4,814,814 dollars, whilst the pay
ments aftuaiy made, computing the florin at
2 1-2 to a dollar, amounted to 110 more than
3,372,717, leaving as a balance at the end of
1791 of 1,442,097— Adding to thjc balance the
inftalmentsduefor 1792, amounting to 683,858
dollars—there were to be paid within the
year 2,080, dollars. The entire payments,
however, composed of 656,500 dollars in Eu
rope, and 726,000 put to the account of St.
Domitigo, (although 441,263.83 were actually
paid) amounting to 1,382,530 dollar*, leaving
due at the end of 1792, a tialance of 698,485.
Here he adverted to and read a paragraph
in the report of the secretary, page 16, whertf
in alJulion to the measure of drawing bills in
the latter part of 1792, he fays, I feel my
felf tlie more at liberty to do it, bccaufe it did
not interfere with a compleat fulfilment of
the public engagements in regard to the fo
reign debt. It could be done conliftently
337
witwj * full re im bur foment of all arrears and
tnftaimentsi which had accrued on account of
that debt." Mr. M. observed, that as he
could not reconcile this paragtapb with tie
calculations which lie had stated, and which
wete drawh from official documents, he mult
regard it aslan uuqueftiooable error produced
by Ibme hasty view of the fubjeft.
Returning to the commifiion, Mr. M. re
peated that all the money which that instru
ment, defined and qualified by the inftruftion
annexed to it, authorised the secretary to bor
row, Vvas actually and fpecificatly appropriated
to the payment (if the foreign debt, and under
circutpftances particularly ip relation
. to a p^rtofit.
In what manner had ttlis trust been carried
into execution ? It was to be ohferved with
regret, that on the very day, 011 which the-coin
million and inftruftion issued from the Prefir
dent, the secretary commenced his arrange
ment for diverting part of a loan, accepted
and ratified by virtue of his commission, to a
purpofV different from that fpecified and re
quired by his inftruftion. That a fact of lb
extraorilitery a complexion, might be ground
e4 °n the proof, jVJj.M.
ft .J, he ihould take the line ty of fttpporting
it by the authority of the Secretary himfelf.
Here l>e read from the Secretary's letter dated
Auguji 28, 179"), to the Dutch houses from
whom the loan had been accepted, the follow
ing padages, viz. 44 I Ihould also wilh for par
ticular reasons that the business may be lb re
gulated as to give it the form of two Joans,
one for two millions under the fir ft ast, and
the other for ore million under tk:fecond. But
neither about this, am I so solicitous as to be
willing it fnotild constitute an embkrrafT
ment."
I dejiive a million and an ha!J of this Jum as a
payment to France under the direction of Mr.
Short, our charge des affaires at that court,
whole orders for that purpose you will please
to follow."
The afpfcft here presented by a companion
of the several documents, was Angular and re
markable; The subordinate officer appeared
in dircft opposition to the chief magistrate.
The agent was seen over-ruling by his own
orders,, the orders of his principal. The lan
guage of the President was—By virtue cf the
power vetted in me by law, I deifcine the mo
ney to be borrowed, to the discharge of the iti
ftalments and interest of the foreign debt*
The language of the secretary was—l defline
a part of the money only to that purpose, and
a pat t to be brought to the United States for
ether purposes. He left every member to
make his own reflections on the fubjeft. He
would only oblerve in general that it del' on
ftrated the truth afterted in the proposition,
that the secretary had violated both the law
of August 4th, 1792, and the inftruftion of
the President relating to it.
He then proceeded to a more diftinft view
of the two points particularly stated iu the
resolution.
The firft was, ** That a certain portion of
the principal, borrowed under tne ast of Au
gust 4, 1790, had been applied to the payment
of the irtterett falling due on that principal "
As the f.ift would not, he presumed, be deni
ed, lie forbore to quote Chac part of the docu
ments, which admitted and authenticated it.
He would, however, premise to any obl'erva
tiofis on it, a cur.fory view of the natute of
appropriations.
Jt was unr.etcflary to repeat Ihe emphatic
remarks on this fubjeft, which had fallen from
the member from Pennsylvania (Mr. Findley)
It was fufficiently understood, he concluded,
that appropriations of money were of a high
and sacred character; that they were the
wrestt bulwark which our ronfritution had
carefully and jealously established against ex
ecutive ufurparions. He meant only to take
notice of the different plans into which appro
priations might be moulded, and of the patti
cular operatior, which ought to he given to
them.
One of the plans, was that of appropriating
fptcified funds to fpecified objects ; in which
the supposed cerrainty of the funds was ad
jufled to the fuppoled importance of the ob
jects.
The other plan formed all the branches of
the revenue into an aggregate fund; on which
' the several objects should have a priority of
claim, according to their fuperior.ty of im
pel nee.
It was evident, that in both these cafes,the
leffiflature alone poffcftYd the competent au
thority. Theexclufive right of that depart
ment of the government to make the proper
regulations, was the basis of the utility and
efficacy of appropriations.
There was a third question incident to the
doctrine of appropriations, viz—Whether,
under fpecific appropriations,fuch as had been
adopted by Congress, the executive «uthonty
could, without Ipecial permission of the law,
apply the excess of one fund to the aid of a
deficient one ; or borrow from one fund for
the object of another. On this question there
might perhaps be a difference of opinion. He
would only remark, that admitting ftich adif
cretion to be implied in the trust of executing
Uie laws, it \ypuld still be requisite that the
[Whole No. 40;.]
due fivxftiwi <rfK*«HJe«tlve flion'd he give*,
that a fefcular accoiitrflHonld be ktfitr Bef\#een
the different and that yjl advai'Cts
from one tp t!je other'lftonld he le'plaeud a#
soon S'.pofliblc. . Thii equally necelfary
to the.preservation of order in tlie public fi
nancesj ami to a prop.'i relj>e<ft for the autho
rity of the laws.
In tfie present cafe it did not appear tfuip
the monies taken at different times from tha
leans designated by the President, and thereby
.placed under the appropriation of the ast of
.August 4, 1791, to the foreign debt, ever
been replaced. It did not appear that #ay
ftich replacement was regularly planned* or
provided ibr. It was particularly worthy of
•bier vat ion moreover, that the only life with
in the United States for which afiv loan iq
Eitttope could be afiigned, was that of the (ifik
ingfiind j that the trutteei of this fund' had
never been even informed of the drafts;
if all the moniei drawn had been carried to
the finking fund, tlie liinitted Turn of 2,066,b00
of dollars would have been exceeded; and
tbat the ftatethents and accounts had ly
so woumi up, as njcntioned by'tlfie l SeOfe
tai not a fingk flilTar of tlie money "laid
out iiV purebafihg the public debt,, had. beert
charged on loan ; draw 11 into the United .States;
although such was the onlj pnrpoie to which
they were legally applxahle, and such the
principal reason alfigued for making the drift.
He did not go into a particular proof that
the sum drawn into the United States, after
fubtra&ing the whole sum placed to a foreign
account, exceeded the Aim of 2,000,000 of
dollar-;, becanfe the fa<ft had been conceded on
the other fide, particularly by the ftatemcnt
of the member from Connecticut (Mr. Hill
hou'e).
Thus it appeared clearly, fn confirmation
of the firft point, that the application of a cer
tain portion of the principal borrowed in Eu
rope, to payment of the inteieft. vas not a
mere transposition of monies, so prevent the
fending them backwards or forwards ; nor
an advance of money from an overflowing
fund in favor of a deficient one ; but an al>-
solute diversion of appropriated money : and
consequently a violation of the law making
the appropriation,
Tlve (econd point in the resolution, renting
to the drawing of monies into the United
States without the inltruClion of the President.
This point had been fully eftablilhed by the
documents and explanations applied to the
firft. They had done more : They had 'de
monstrated that the inftru&ions of the Prtfi
der.t which dedicated the loans to be made
under his commission, to a foreign ohjec%wiei e
an cxprefs prohibition of drafts for any do
mestic object. ft was f\ifficient therefore to
refer to the inftru&ions of the Pre/jrient, 4r,d
to the contradictory steps taken by the Secre
tary.
Two attempts had been made to eluHe the
force of tbeie official proofs.
The firft appealed to the President's speech
at the opening of theSeflion in 1790 ; to Vhe
report of the Secretary made in
of.it to the house; and to the fuppiemcntfcry
ast of Congress paifed in conformity to the
report,.
Had the circumstances invoked in this
tranfa&ion been attended to by those who
Teemed to rely on it, Mr. M. was periuaded
that a reference to it would never have been
made by gentlemen on that fide. As they had
thought fit however to draw argument-, from
that f'ource, it was proper to give an anfXyer
to them 5 and the best aniwer would be 3,
naked statement of
The inftruftign of the President to the Se
cretary, was given, as has been seen, on £he
28thofAuguft 179°' The letter of the Se
cretary contravening this inftrultion, was
dated, as has also been seen, on the fame 28th
dayofAnguft, 179°-
The actual drawing of bills by the secretary
commenced tbe I jth of December, 1790.
The law now pleaded in justification of the
condgft of tl-e secretary pulled on the 3d of
Marcb, 1791. , ■ ' '
There are other facts material to a correct
ard full view of the bu(ii;efs.
The speech of the President was delivered
on the Bth ofDete'mber, 1790. It biiefly in
formed the two houses that " a loan of three
millions of florins, towards which some pio
vifional measures had previoiifly telcen place;
had been completed in Holland," —and,"That
the secretary of the treasury had his direftioo
to communicate such further particulars a}
plight be requisite fur mort prccile inl'orma
tion."
The confeqnent report of the (ecretary re»
comniending the provision in the fuppltnien
tary ast, was not received till the 2jth of Fe
bruary, 1791 : fix days only before the con
stitutional diflolution of tl.e house.
In the interval between the speech of the
Prtfident and the fecretary'j woport, le had
proceeded to draw bills to the amount of
793.392 florins.
His rep«rt ( ratwilhftaxdtng what had been
Jaid of it, contained not a word from which it
couid be known that a fii'gte florin had been
actually drawn over to the U <lted-StaU«. '
[Tc h -cntiuui.]