To Edmund Randolph
March 12. 1793
I had taken it for granted, from the general spirit of the transaction, that the first installment to the Bank of the United States of the loan mentioned in the within Agreement of the 25 of June last1 became payable on the 1st of January of the present year. But upon examining the Agreement, a doubt arises whether that intention be consistent with the tenor of the Instrument or how far the Act of Congress of the second instant gives a construction and authorises immediate Payment.2
I request then, as a guide, your opinion, whether an immediate payment of the whole first installment of the two millions borrowed will be conformable to the general spirit of the Agreement and to the Act of Congress just referred to—and if not the whole, whether of any part and how much—and in general at what period or periods the first installment may be considered as payable.
It is indubitably the interest of the Government to pay the whole sum without delay because the Bank at present understands the installment to have been payable at the time I have mentioned, and will I doubt not, if that construction can be pursued, consider an equivalent sum of interest as ceasing from the first of January last; but if the legal construction be taken to be different, the Interest will of course go on against the Public till the payment is made. And as the Treasury must be prepared for it, a correspondent sum must be kept in deposit to answer the demand, when the period of payment arrives.3
These considerations however can only operate as motives to give as liberal a construction as can be fairly supported.
With respectful consideration I am Sir Your Obed ser
Ed Randolph Esqr
ADf, Connecticut Historical Society, Hartford.
2. “An Act providing for the payment of the First Instalment due on a Loan made of the Bank of the United States” provided “That the President of the United States be, and he hereby is authorized and empowered to apply two hundred thousand dollars, of the monies which may have been borrowed, in pursuance of the fourth section of the act, intituled ‘An act making provision for the reduction of the public debt,’ in payment of the first instalment, due to the Bank of the United States, upon a loan made of the said bank, in pursuance of the eleventh section of the act for incorporating the subscribers to the said bank” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 338 [March 2, 1793]).
For Section 11 of “An Act to incorporate the subscribers to the Bank of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 196 [February 25, 1791]), see H to the President and Directors of the Bank of the United States, January 1, 1793, note 1.
3. No reply from Randolph to this letter has been found. On February 28, 1794, the House of Representatives “Resolved, That the Secretary of the Treasury be directed to furnish the House with … a copy of any opinions which may have been given by the Attorney General, relative to a construction of the said contract …” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826), I. description ends I, 76). In his “Report on the Contract Made with the Bank of the United States for a Loan of Two Million Dollars,” April 25, 1794, H did not furnish the requested document. A statement in this report, however, reads as follows:
“According to the intent of this Contract as understood by the Secretary of the Treasury and the Bank, the first instalment of 200,000 dollars was payable on the first of January 1793. The Secretary in a report to the House of Representatives of the 30th. of November, 1792, submitted a provision for reimbursing the loan to the Bank. None was made ’till the time for reimbursing the first instalment as understood between the Treasury and the Bank, had elapsed on the first of January 1793. The Secretary by Letter informed the Bank that he would leave on deposit, as an offset against that instalment a Sum of 200,000 dollars, ’till Legislative provision should be made concerning the Matter. An Act of Congress of the 2d of March 1793, authorised the payment of this Instalment out of the proceeds of the Foreign Loans. But the then Attorney General being of Opinion that upon the legal Construction of the Contract compared with the words of the Act, the payment could not be made ’till the 25th. of June 1793; the Completion of the business accordingly remained suspended ’till the 20th. of July following, when a Warrant issued to pay over the proceeds of the Bills in deposit to the Treasurer, and another Warrant to pay an equal Sum to the Bank. Interest upon the Instalment ceased on the 31st. of December 1792, by Virtue of the Deposit” (copy, RG 233, Reports of the Secretary of the Treasury, 1784–1795, Vol. IV, National Archives).