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.