This letter is the first serious indication of Richard Cutts’s financial problems, which eventually led to his bankruptcy and JM’s involvement in Cutts’s personal affairs.
Cutts, a former U.S. congressman (1801–12) from Saco, Massachusetts, District of Maine, had married Dolley Madison’s beloved sister, Anna, in 1804. A member of a prosperous merchant and ship-building family, Cutts engaged in the business but ran into difficulties at the beginning of the War of 1812 when he lost a number of ships (Henry S. Burrage, “Richard Cutts,” Collections and Proceedings of the Maine Historical Society, 2d ser., 8 : 1–7, 10, 24–25, 29). JM, who enjoyed an affectionate and trusting relationship with Cutts, appointed him to the position of superintendent general of military supplies in 1813 (PJM-PS description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (7 vols. to date; Charlottesville, Va., 1984–). description ends 5:123 n. 3). Cutts held that post until 1817, when President Monroe named him second comptroller of the Treasury (Senate Exec. Proceedings description begins Journal of the Executive Proceedings of the Senate of the United States of America (3 vols.; Washington, 1828). description ends , 3:92–93).
Cutts launched a number of speculative ventures immediately after the war, using his own funds and those of Dolley Madison, JM, and John Payne Todd. The first amount he borrowed from JM that we have evidence for was in excess of $5,000 (Cutts to JM, 23 Aug. 1816 [MHi]). In April 1817 Cutts signed a promissory note to JM for $7,500 and gave a receipt for a loan of $4,000 more (Promissory Note from Richard Cutts, 4 Apr. 1817, PJM-RS description begins David B. Mattern et al., eds., The Papers of James Madison: Retirement Series (2 vols. to date; Charlottesville, Va., 2009–). description ends 1:25). Also in that month Dolley Madison loaned an undisclosed amount of John Payne Todd’s money to Cutts on his promise that “he would make double if allowed the use of the Money on speculation.” This unsecured loan was bitterly recollected later by John Payne Todd (undated memorandum in John Payne Todd’s hand, ibid., 25 n.).
In addition, in the presidential years and thereafter, Cutts often acted as JM’s agent in Washington during the latter’s absence from the city (JM to Cutts, 27 Aug. 1816, MHi). It is likely that Cutts and JM had a reciprocal lending arrangement and called on each other from time to time when their funds were short or extraordinary calls for cash were made on them (see JM to Cutts, 23 July 1817, PJM-RS description begins David B. Mattern et al., eds., The Papers of James Madison: Retirement Series (2 vols. to date; Charlottesville, Va., 2009–). description ends 1:93–94).
By October 1821 Cutts was in court for default on a note for $2,000; because of his nonpayment of the court’s judgment, goods and chattels for that amount were seized in May 1822 by order of the circuit court of the District of Columbia (District Court to Tench Ringgold, 27 May 1822, DNA: RG 21, U.S. District Court of the District of Columbia, box 278, NC-2, entry 6, case papers #79). It was probably sometime between October and May that Dolley Madison wrote Cutts about “the threatening situation of your affairs,” pleading with him to secure to her “all the mony lent you, in a House, Lots, or some other property, in case, you have at this unlucky moment to part with what you possess in Washington.” She assured him that he might “⟨a⟩fterwards command this sum, with all that could be ⟨r⟩aised from every source, to rescue, or to enrich you, from more fortunate speculations” (NjP: Crane Collection). This Cutts failed to do.
Later, Dolley Madison would recall to her former brother-in-law, John G. Jackson, another of Cutts’s creditors, that Anna Cutts “& 4 of her children ware with us last summer, when they flattered themselves with the prospect of a rise in city property & B. Stock & that they would have been able to pay all, & save a fortune—but she was entirely ignorent of the extent of his embarisments, or the individuals who would suffer by her Husbands losses” (Dolley Madison to Jackson, 29 Nov. 1822, Mattern and Shulman, Selected Letters of Dolley Payne Madison, 247, 404).
The sale of “all his household Furniture” took place at Cutts’s house on 5 November 1822 (advertisement of “Marshal’s Sale,” Daily National Intelligencer, 1 Nov. 1822). Dolley Madison had arranged to buy most of the furniture through an agent, Col. George Bomford. Of the $853.06 brought by the sale, Bomford spent $679.31 (List of items bought at the sale of Richard Cutts’s furniture, 5 Nov. 1822, DNA: RG 21, U.S. District Court of the District of Columbia, box 278, NC-2, entry 6, case papers #79). In December 1822 Dolley wrote Anna Cutts with the following instructions: “you will tell Colo B. that it is necessary for him to write me the transaction to have the Deed made in my name as well as to transfer his controul of the furniture The negro girl, cow, & &. to me so that I may directly reply, by rects. or what else he may direct me, as a legal proceeding” (owned by Mrs. George B. Cutts, Wellesley, Mass., 1982). This was done and the purchased items were held in trust for Anna Cutts with Andrew Stevenson as trustee (Trust Fund for Anna Cutts, 2 Apr. 1823 [owned by Charles M. Storey, Boston, Mass., 1961]). In June 1824 another trust for Anna Cutts was established out of $1,200 in funds provided by her sister, Lucy Washington Todd, and others (Trust Agreement for Anna Cutts, 12 June 1824, Mattern and Shulman, Selected Letters of Dolley Payne Madison, 255).
In the meantime, Cutts had advertised the sale of house lots he owned in Washington for public auction in August 1822, but the sale was postponed, first to 20 October, then to 7 November (Daily National Intelligencer, 15 and 19 Oct. 1822). By then any hope of liquidating assets and remaining solvent was at an end. Cutts wrote JM on 12 October 1822 that he was ready to declare bankruptcy. JM replied on 14 October that he regretted “most sincerely, the circumstances which compel you to take the step you meditate, as the only resort under the pressure of your debts. I wish it were more in my power to aid you in your distress. Short crops, low prices, and other causes limit my present means, & suggest caution as to future engagements.” He went on to say that he had, however, determined “to risk a purchase of the House & lots from the Bank as is proposed,” so long as the property titles were clear and Cutts agreed to “appropriate a reasonable portion of your [Cutts’s] Salary to a discharge of the debt to the Bank.” JM asked Edward Coles to investigate the title and financial arrangements, which he did, reporting in some detail the history of Cutts’s financial transactions (Coles to JM, 30 Oct. 1822). On 4 November 1822 JM purchased from the Bank of the United States through Cutts’s trustee, Richard Smith, the house on Lafayette Square, where Cutts and his family lived, and additional lots, for $5,750 plus interest, to be paid in four equal installments over four years (JM to Cutts, 4 Nov. 1822; Burrage, “Richard Cutts,” Collections and Proceedings of the Maine Historical Society 8 : 25).
Richard Cutts’s bankruptcy proceedings awakened an army of creditors who saw JM’s purchase of the house and lots as a dodge for Cutts to escape his fiscal responsibilities (notice of bankruptcy, Daily National Intelligencer, 22 Oct. 1822). JM was made a party to at least two lawsuits for debt recovery, one of which, despite JM’s plea of noninvolvement, carried on until 1828, the other into 1831 (Answers to Charles Edmonston, 1828 [owned by Charles M. Storey, Boston, Mass., 1961]; JM to Nicholas Van Zandt, 31 Oct. 1826, DLC; JM to Richard Cutts, 29 Mar. 1831, NjP: Crane Collection). JM was also faced with requests to intervene with Cutts by friends who had been hurt by Cutts’s recklessness (Dolley Madison to John G. Jackson, 29 Nov. 1822, Mattern and Shulman, Selected Letters of Dolley Payne Madison, 247; William Thornton to JM, 2 Sept. 1823, DLC).
The Cutts family remained in the house on Lafayette Square, paying rent to JM after Cutts had finally paid off his debts in 1829. That year, however, Cutts suffered another reverse when he was removed from office in the Treasury Department in a wholesale purge of the federal bureaucracy by President Andrew Jackson (JM to Richard Cutts, 13 June 1829 and 19 Mar. 1831, NjP: Crane Collection; Mattern and Shulman, Selected Letters of Dolley Payne Madison, 398).