The instruction of the President to the Secretary was given, as has been seen, on the 28th of August, 1790. The letter of the Secretary contravening this instruction, was dated, as has also been seen, on the same 28th day of August, 1790. The actual drawing of bills by the Secretary commenced the 15th of December, 1790. The law now pleaded in justification of the conduct of the Secretary, passed on the 3d of March, 1791.
There are other facts material to a correct and full view of the subject. The Speech of the President was delivered on the 8th of December, 1790. It briefly informed the two Houses that "a loan of 3,000,000 of florins, towards which some provisional measures had previously taken place, had been completed in Holland," and "that the Secretary of the Treasury had discretion to communicate such further particulars as might be requisite for more precise information." The consequent Report of the Secretary, recommending the provision in the supplementary act, was not received till the 25th of February, 1791—six days only before the constitutional dissolution of the House. In the interval between the Speech of the President and the Secretary's Report, he had proceeded to draw bills to the amount of 793,392 florins. His report, notwithstanding what had been said of it, contained not a word from which it could be known that a single florin had been actually drawn over to the United States.
The other attempt to elude the evidence before the committee, recoiled with equal force on the gentlemen who had hazarded it. In the report lately made by the trustees of the Sinking Fund, is a statement laid before them by the Secretary, in which it is noted "that the acceptance of the loan of 3,000,000 of florins, and the application of one-third of it to the purpose of that fund, was under the consideration of the President." From this fact, it had been inferred, not only that the Secretary had withheld no proper information from the Trustees, but that the result of the President's deliberations on the subject had varied the purpose signified by his first instructions to the Secretary.
It happened, however, most unfortunately for the gentlemen who exulted in this argument, that they had entirely overlooked the dates of the two papers. The paper laid before the Trustees, and alleged to have explained the final purpose of the President, was dated on the 25th of August, 1790. The paper relied on by the other side, as the final, as well as the most formal, designation of the will of the President, was dated the 28th of August, 1790. The gentlemen, therefore, instead of the inference they had made, should have reversed their premises, and joined with their opponents in concluding that the President was led by a consideration of the subject, not to do what the Secretary, in his note to the Trustees, seemed to anticipate, but what had been evinced by the President's own act of posterior date.
The second point, then, as well as the first, rests on the most solid proofs, taken from a collective view of authentic documents.
Much has been said on the necessity of sometimes departing from the strictness of legal appropriations, as a plea for any freedoms that may have been taken with them by the Secretary. He would not deny that there might be emergencies, in the course of human affairs, of so extraordinary and pressing a nature, as to absolve the Executive from an inflexible conformity to the injunctions of the law. It was, nevertheless, as essential to remember, as it was obvious to remark, that in all such cases, the necessity should be palpable; that the Executive sanction should flow from the supreme source; and that the first opportunity should be seized for communicating to the Legislature the measures pursued, with the reasons explaining the necessity of them. This early communication was equally enforced by prudence and by duty. It was the best evidence of the motives for assuming the extraordinary power; it was a respect manifestly due to the Legislative authority; and it was more particularly indispensable, as that alone would enable the Legislature, by a provident amendment of the law, to accommodate it to like emergencies in future.
In the proceedings falling under the present inquiry, no necessity appeared for the liberties which had been taken, the money appropriated in Europe being more wanted there than at home. It appeared that the instructions of the Supreme Executive, instead of warranting those liberties, had precluded them; nor had the proper explanations been disclosed in due time to the Legislature. To place the subject in a more distinct point of view, it was proper to advert to the precise authorities and duties of the Secretary, as his office is defined by the act establishing the Treasury Department. For this purpose, Mr. M. read the second section of that act, which is in the words following:
"That it shall be the duty of the Secretary of the Treasury to digest and prepare plans for the improvement and management of the revenue, and for the support of public credit; to prepare and report estimates of the public revenue and the public expenditures; to superintend the collection of the revenue, to decide on the forms of keeping and stating accounts and making returns, and to grant, under the limitations herein established, or to be hereafter provided, all warrants for moneys to be issued from the Treasury, in pursuance of appropriations by law; to execute such services relative to the sale of the lands belonging to the United States as may be by law required of him; to make report and give information to either branch of the Legislature, in person or in writing, (as he may be required,) respecting all matters referred to him by the Senate or House of Representatives, or which shall appertain to his office; and generally to perform all such services relative to the finances as he shall be directed to perform."
This establishment of the office evidently had no reference beyond the case of superintending the regular and ordinary collection of the revenue, and granting warrants for moneys issued from the Treasury, in pursuance of appropriations by law. The case of loans, as an occasional and extraordinary resource, was left to be provided for by particular laws for the purpose. The authority, with respect to the loans in question, was accordingly committed to the President, in order to secure for so special a trust, the highest responsibility to be found in the Government. And when it was considered that the whole sum contemplated was no less than fourteen millions of dollars, and when the latitude as to the terms and contracts was combined with the vastness of the sum, it might well be questioned whether so great a power would have been delegated to any man in whom the Legislature and the people of America had less confidence than they so justly reposed in the existing Chief Magistrate, and whether an equal power will ever be committed to a successor. This distinction between the case of ordinary revenue and that of loans is not only consonant to the actual policy of our laws, but is founded in obvious and solid considerations. In the collection and disbursement of the ordinary revenues arising from taxation, the business flows in official channels, is subject in every stage to official checks, and the money, being in constant influx and efflux, nowhere accumulates in immense sums. The case of loans is, in all these respects, different. In settling the terms and arranging the negotiations, there is always an important discretion involved. When the loans are foreign, as well as great, regulations concerning the bills of exchange form another occasion where great latitude is implied in the trust; whilst the magnitude of the sums, falling under the same direction at the same moment, present a further and material variance between the two cases. The tendency of these observations is to show that, as the permanent law establishing the Treasury Department does not extend the authority of the Secretary to the case of loans and as the law authorizing loans exacts, for special reasons, a responsibility from the President himself, the authority of the Secretary, in executing the loans, and the appropriation of them, must be derived from the President; and, consequently, where that authority fails, there can be no resort to the law establishing the department, much less to any general discretion incident to his official character. It is evident that the President, although no doubt guided by the most proper considerations in employing the agency of the Secretary of the Treasury in the business of the loans, might, if he had judged fit, have substituted the agency of another; and that, whatever agency he might prefer, his own instructions would always regulate the extent and exercise of the power conferred. The want of any apparent authority from the President had led several gentlemen to insist on presumed authorities, superseding the instructions joined with the commission to the Secretary. But here, again, the fair inference was to be reversed. A communication of the authorities given by the President to the Secretary, as to the application of the foreign loans, had been expressly requested by the vote of the House. It was not to be supposed that the Secretary, if he had received further authorities or instructions, would have failed to produce them, or to refer to them, in the justification of his conduct. Far less could it be presumed that the President, if he had given any superseding authorities or instructions, would not have caused them to be communicated to the House, or that he would have suffered a partial communication to mislead the House into an error as to so important a fact. The President was the last man in the world to whom any measure whatever of a deceptive tendency could be credibly attributed.
Thus far (said Mr. M.) his observations had departed as little as possible from the question in its strictest sense. He should now avail himself of the opportunity afforded by the terms of the last clause, which spoke of drafts generally, to take a more particular notice of those recently made; in doing which, he considered himself safe within the Rules of the House, which were so rigorously enforced against the affirmative side of the question. The whole amount of foreign loans transferred directly or indirectly to the United States appeared from the several statements to be about $3,000,000. The amount of the direct drafts was $2,304,769 13. Of the drafts made since the 16th of April, 1792, and sold by the bank, the proceeds now in the bank, or payable into it, before the 1st of April next, amount to $1,220,476 01. Of this sum $510,000 have been drawn in the course of the present session in Congress. With respect to the times and the amount of these drafts, hitherto absolutely unknown to the Legislature, because the account of them had remained in the books of the bank without ever appearing in the books of the Treasurer, Mr. M. confessed that he had found no explanations that were satisfactory to him. He had looked through all the reports and all the communications before the House, without discovering either that they had been made by the authority or with the knowledge of the President, or had been required for, or applied to the purchase of, the public debt, or had been ever communicated to the Trustees of the Sinking Fund, who had the direction of such purchases, or that they were the effect of any necessity that could justify them. And if there was no evident necessity for the proceeding, it was the more to be lamented that, whilst we were every where sympathizing with our allies in their arduous struggles for liberty, and echoing, from every part of the Union, our congratulations and good wishes, the pecuniary succors so critically necessary to their cause, and the most substantial proof of the sincerity of our professions, should be silently withdrawn across the Atlantic from the object for which they were intended—succors, too, which were not merely a tribute of gratitude, of generosity, or of benevolent zeal for the triumph of liberty, but a debt moreover of strict and positive obligation, for value acknowledged and received. In contemplating the subject in this point of view, he felt a pain which he could not easily express, and to which, he persuaded himself, the breast of no other member could be a stranger. Laying aside, however, all these unfavorable considerations, the important question still remained, why the Legislature had been uninformed of the moneys so unexpectedly drawn into the bank, and to so very great an amount? If the drafts had received every requisite sanction, if they had been produced by the most justifiable causes, the existence of $1,220,476, in a situation so different from what had been contemplated, was a fact which the Representatives of the people had a right to know, which it was important to them and their constituents that they should know, and which it was the indispensable duty of the officer charged with it to have made known. This omission was the more remarkable when considered in relation to the measure above mentioned, of paying off at once the whole sum of $2,000,000, payable to the bank by instalments in ten years. A bill for this purpose had been introduced, and was on its passage; the object of it had been patronized by a report of the Secretary not long since made. In one of his last reports he expressly states, among the inducements to such extensive drafts of money from Europe, that they were made "with an eye to placing within the reach of the Legislature" the means necessary for this object. Was it not extraordinary, was it not unaccountable, that so important a measure should be recommended, and be actually introduced, and that money otherwise appropriated in Europe should be transferred to this country and deposited in the bank, in order that it might be within the reach of being applied by the Legislature to that measure, and yet that no disclosure should be made to the Legislature of that fact that the money was so drawn and lay at the bank, within their reach, to be so applied? If any thing could heighten astonishment on this occasion, it must be the reason assigned by the Secretary for any obscurity that might have hung over our finances—"that, till the last resolutions, no call had been made on the department which rendered it proper to exhibit a general view of the public moneys and funds, or to show the amount and situation of such as were unapplied." Mr. M. would not decide that the Legislature was free from blame in not using more full and efficacious means of obtaining such information as would have removed all obscurity. But, whatever degree of blame might fall on them, it never could be admitted that their calls on the department had furnished no proper occasion for exhibiting a full view of the public finances. He referred generally to the various resolutions, which, without the least force of construction, would have extended to every proper article of information. He reminded the committee of the latitude of reports under certain other orders of the House, and asked whether less freedom of construction was to be allowed when information was to be given, than when power or discretion was to be exercised? But independently of this view of the matter, Mr. M. held it to be clear and palpable that the very situation of the money afforded an occasion which rendered it proper that the House should be informed of it. If a liberty could be taken of removing money from Europe, where it stood appropriated by law, to this country, where there was no legal object that required it, and with an eye, as was stated, to an object to which no money was applicable, without the authority of the Legislature, how could it possibly be supposed improper to take the further liberty of communicating what was done to the Legislature? He concluded with recurring to the particular form in which the subject presented itself to the committee, and repeating that, whatever quality might be attached to the facts charged, or however improper it might be thought by some to proceed in haste to any affirmative decision on them, it appeared irreconcilable with the evidence which had been produced, to decide, by a negative vote, against the truth of the facts.