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.