Alexander Hamilton Papers

Enclosure V: Letter from Nathaniel Pendleton, 4 June 1790


In consequence of an application from the executors of the late General Greene, to relate what I know, concerning his securityship, for the payment of certain monies for John Banks and others, I have written the following statement of facts, which is all, I can remember; and many of them happening so long since, and having no written memorials to refer to, I cannot exactly ascertain or particularise.

I was an Aid-de-camp to General Greene, from February 1781, until the disbanding of the army in 1783; was usually with him, and, at the time of his entering into the securityship alluded to, had as much of his confidence, at least, as a person in such a situation usually has of his General; which gave me access to his papers, and an opportunity to know, almost, every matter of importance, that happened to him, or the army under his command.

The evacuation of Charleston happened in December, 1782; previous to which, and for some time after, the troops were supplied with provisions, by the State of South Carolina, and the mode was, by warrants of impressment, from the governor of that State. Soon after the evacuation of that place, powers arrived, either to General Greene, or Colonel Carrington, Quarter Master General, to make a contract for supplying the army, according to the mode then lately adopted with the northern army. It was difficult to find persons willing to contract, on the terms proposed, and the supplies from the State were so precarious and uncertain, that the troops began to complain and murmur. At length the contract was formed with John Banks. Mr. Banks had gone into Charleston, previous to the evacuation, and had contracted with some British merchants, for upwards of thirty thousand pounds sterling worth of goods—he had entered into partnership with several persons, in this speculation, who, under the firm of Robert Forsyth and Company, were retailing those goods, by a rapid sale, and at a high advance. As soon as the contract was made, the supplies, furnished by the State, were refused to be continued, and the army was reduced to great distress, for want of provisions. John Banks had failed to comply with the contract; a vessel of his, coming from North Carolina, was lost near the bar, with a quantity of pork, which, I remember well; and, I think, he had another taken by the enemy, but am not certain as to this, by which the army was, three or four days, with very little, or no provision at all. Several alarming circumstances of discontent appeared, and seemed to threaten a revolt. It was expected that the funds of Robert Forsyth and Company, of which Banks was a principal, would have enabled him to have complied with the contract; but it was found, that the partners of that House, who were not interested in the contract for supplies, refused to let Banks have any of their cash, to apply to that purpose, until the merchants, from whom the goods were purchased, were paid, or sufficient security given them for that purpose. Under these circumstances, I have been often told by the parties interested, but was not present, that Banks applied to General Greene, to become security for the payment of the debts due for those goods, that he might have the money, intended to pay for them, to supply the troops. Not being present, I cannot say, what inducements, Banks might have held out to the General. But I have heard from Banks and the General, what, from every circumstance, that has come to my knowledge, I believe to be true—which was, first, that the army would, by that means, be supplied with provision, and the dangerous consequences, that were apprehended, be prevented, and that there could be no risk in so doing, as their affairs were in a prosperous way; considerable remittances made to Virginia, to purchase tobacco to be remitted to their creditors, and that the monies, arising from the contract should be applied to the same purpose. The General became guarantee for those debts, or the greater part of them, the exact amount I dont know. Banks, in consequence, had the funds, he wanted, to supply the troops, and, I believe, there were no more complaints. But the General, soon after, began to find, that the money, sent to Virginia to purchase tobacco, to be remitted to pay these British creditors, as well as the money due, and received by Banks on the contract, had been applied to entirely different persons, and purposes, than that, to which they had been promised; and, although some payments had been made, after the General became security, considerable sums still remained due, when the affairs of Banks and his partners became desperate. He became exceedingly uneasy, and did all, he could, to get assignments of debts, and other payments made.

The House of Robert Forsyth and Company made an assignment of debts to a very considerable amount, (I cannot recollect, how much) to Harris and Blackford, which I drew, and they were, then, generally considered, as good debts. These, I believe, were afterwards, relinquished by Harris and Blackford, for some bonds, which bonds, I understood, are disputed; and I am informed, a suit in Chancery is still depending concerning that affair. In the latter end of 1784, I came to live in Georgia, where General Greene came, also, to reside, I think, in November 1785. The General informed me, he was about to settle the amount of the debt, he had guaranteed to Messrs. Newcomen and Collet, and asked my opinion, whether he could legally pay them, unless by compulsion, without weakening his claim to compensation, from the persons, for whom he was security. I was of opinion he could; and advised him to consult Mr. Edward Rutledge,45 on the occasion, who being of the same opinion, Mr. Collet came to Savannah, and, on the Tuesday before the death of General Greene, in June 1786, in my house, they came to a settlement; and General Greene executed bonds for, I think, about six thousand pounds sterling, payable at different periods, and delivered them, in my presence, to Collet, who gave him, also, in my presence, the bond, the General had signed, as guarantee. There was a dispute between them concerning a sum, I think, about sixteen hundred pounds, which, Collet admitted, he had received from Banks, or some of his partners in Virginia, which Collet had retained on a private account with Banks, which, the General insisted, ought to be credited on the guarantee-bond. It was deducted, accordingly, upon the General’s giving a special bond, which I drew, and he executed, with condition, that if ever he recovered from Banks, or his partners, as much as would indemnify him, for all his losses and expenses in consequence of his securityship, that then he would pay it—otherwise not. The motive, that induced the General to make this arrangement, was, that he might have the use of this bond, in suing the principals for indemnification; and to have time allowed him for payment. I know not, what the General might have done with it, but I saw it delivered to him, and suppose it must be among his papers, as he died on the Monday following.

It may be justly expected, I should say something of a report, that went abroad, at or about the time, Banks was opening his House in Charleston, that General Greene was a partner, and had an interest in Banks’s speculations, which induced him to guarantee those debts. It arose from a letter from John Banks to his partners, or some friend in Virginia, which was opened, and made public; wherein it was insinuated, that the General was concerned.46 I do not remember the exact expressions, it contained. As soon as the General knew of it, he sent for Banks, and insisted on his making an affidavit, which he readily agreed to, that the General was not, either directly or indirectly, concerned in any of his transactions. I was not present, at that time, (being, I believe, out of town, for a few days) so that I do not know, particularly, what passed; but the reason, I understood, Banks gave for writing such a letter, was, that it would give credit to his plans, and would never get to the General’s knowledge. This affidavit was published in the newspapers in Charleston, I think, in May or June 1783. This report was strengthened by Major Burnet, one of General Greene’s Aids-de camp, becoming concerned in a new partnership, with Banks and others, in consequence of which he went to the Havannah, where he died. I have often conversed in the most free and confidential manner, with General Greene, and with Major Forsyth, one of Banks’s partners (who, having been one of General Greene’s deputies, while he was Quarter Master General, and appointed by him Deputy Commissary General of purchases, for the army under his command, in the southern States; and continuing in his friendship and confidence, even till his death, had the best opportunity to know) and I do, from every circumstance within my knowledge, firmly believe, and can almost positively affirm, that General Greene had no pecuniary concern, or interest in Banks’s speculation. The supposition of such an interest is irreconcilable to several circumstances, which, as they fully convince my own mind, I ought not to omit, though they are rather arguments than facts. First, having the opportunities I had to know it, I think it impossible, almost, it should have been kept so entirely a secret, as to have given me, not even the slightest suspicion. Secondly, General Greene has often expressed his doubts of Banks’s capacity for carrying on the great plan he had in view—particularly, about the time, or some time after the contract, I heard him say, Banks wanted steadiness and judgment, and, though he might succeed at first, he would fall thro’, in the end. This being the case, had General Greene been concerned in interest, in those speculations, being present on the spot, he would have controuled the application of the funds—would have completed the Charleston speculation, which would have been done in a short time, and with an immense profit. Instead of this, Banks, having the sole management of the funds, as I have understood, applied them in payment to the debts of the copartnership of Virginia, and engaged also in several wild schemes, which, the influence, the prudence and judgment of the General would have prevented, if he had had an interest, and, of course, an authority to interpose. Thirdly, General Greene was long and intimately acquainted with Major Forsyth, and always had great confidence in him. If such a secret was to be entrusted to one of the partners only, it would have been, most probably, to him—Yet so far from this, that Major Forsyth has given some mortgages, though I do not know the amount, to indemnify the General, which he never would have done, had the General been interested as a partner. Hunter did the same thing, who was another partner. Major Burnet, one of the General’s Aids-de-camp, was taken into the partnership of Banks and Company, but when, I do not know. I remember, when the circumstance was made known, the General censured Major Burnet, for entering into any mercantile connections, without communicating to him, his intentions, and previously withdrawing from his family. No paper, or any other proof, has, as yet, I believe, been produced, that could give the slightest foundation for any suspicion of this interest; though a Mr. Ferrie, who was one of the partners has done all, he could, to prove it, and whose interest is most materially affected, by a suit brought against him, by the executors of the late General Greene, for indemnification for being security, as above stated. Lastly, I know what were General Greene’s principles, in matters of this kind, from a long and intimate confidence, which began, a little before the circumstances of his securityship for Banks, and continued to the time of his death. From this knowledge, I affirm, upon my oath, I do not believe, he would have suffered himself, from any motive of gain, to have been drawn into any commercial connections, while he remained at the head of the southern army.

I have not, nor can I be exact, as to particular times, and, no doubt, many circumstances have entirely escaped my memory, relative to the subject of this narrative. But, to the best of my remembrance and belief, what I have above related, is true; nor have I omitted any thing, I thought material to the forming a right judgment of General Greene’s conduct, in that unfortunate affair, so far as the same came to my knowledge.

Nath: Pendleton.

Sworne to before me, at Savannah, the 21st day of June 1790.

Joseph Clay, J.P.

45Rutledge, a prominent South Carolina landowner and politician, represented Charleston in the state legislature. After Greene’s death he acted as executor of his estate.

46See note 13.

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