James Madison Papers

To James Madison from Fulwar Skipwith, 25 September 1806

Paris 25th. Septr. 1806.


Tho’ justice may be forever denied me with respect to my interest, I owe it to the principles which have governed my public Agency here, as well as to my Character as an Individual, to repel the invidious Suggestions of Genl. Armstrong, of my having brought forward to him any thing like "false & Scandalous allegations".

With these Sentiments, & from the result of a close &, I trust, impartial review of the Documents here accompanying (referred to in my last letter to you of the 22d. ulto.) in two of the Cases claimed & recovered by Jas. Swan, I am led offer Some farther remarks to your consideration.

In Octr. 1796, Swan purchased from the french Consul in Philadelphia Bills on the Payer of the Marine for 769,252£, on account of which he Paid at different times 324,200£. The residue of the price was not paid.

Swan endorsed the Bills, Sold them to different purchasers, & received the amount of them.

The Bills were accepted on their arrival at Paris, but in July and August 1797 they were all returned to the United States protested for non payment, and Swan as endorser reimbursed the holders and withdrew the Bills.

In November of the Same year (1797) Swan, by his correspondent & partner, applied to Mr. Defermon, then Commissary of the Treasury, and charged with what related to Bills of Exchange, for reimbursement of these Bills, which he had been obliged to withdraw from the holders in Boston, and he Succeeded so well, that Mr. Defermon reimbursed him full Capital, interest, & expences, calculated in Such manner that after deducting what Swan owed for the purchase of the Bills, he had Still to receive 483,264£., being 49 1/ 2 per Cent more than he had paid for the purchase of the Bills, & that only a few mon⟨ths⟩ after the protest: this was thought at the time ⟨a⟩ very liberal reimbursement, and the Bills, prote⟨st⟩ and all Titles were given up to the Treasury receip⟨ted⟩ in full.

Six or Seven years after this event, Swan appli⟨ed⟩ again to Mr. Defermon, then become Director Gen⟨eral⟩ of the Liquidation, and requests a net Settlement ⟨of⟩ these Bills and a Supplementary reimbursement Mr Defermon received him So graciously that he ⟨was⟩ encouraged to ask, not only a Supplementary reimbursement of the Bills he had delivered up, ⟨but⟩ also of a Bill of 450,000£. on which he had never ⟨paid⟩ a Sol, a bill which the Treasury had reimburs⟨ed⟩ to one Rodolphe Eschman, in whose favour it wa⟨s⟩ originally drawn & he, Eschman, had delivered up to the Treasury, in Brumaire of the year Six after having been reimbursed the full Capital ⟨   ⟩ 27,000£ for Interest & Expences.

Swan Stated his demand for a Second & Suppleme⟨ntary⟩ reimbursement at 616,457£. with Interest from the Frimaire an 9, amounting to 735000£., which M⟨r.⟩ Defermon found very just & on the [  ] An⟨d⟩ he ordered it to be paid & it was Soon after paid

Those who Know the difficulties which the grea⟨test⟩ part of the holders of protested Bills had to obtain ⟨any⟩ reimbursement whatever from the Treasury, wh⟨en⟩ Mr. Defermon was commissary, Those who ha⟨ve⟩ Seen the holders of Millions obliged to accept th⟨   ⟩ reimbursement not only without any allowan⟨ce⟩ for Interest, expences or damages, but with lo⟨ss⟩ of 10 or 20 Pr. Cent of the Capital will wonder ho⟨w⟩ it happened that this Commissary gave Swan 483,264£., to reimburse Bills for which the Treas⟨ury⟩ had received only 324,200£., & that from this Same Swan to whom the reimbursement was made This however is very little compared with the astonishment which will be excited when they See this Same Commissary of the Treasury, Six years after these Bills had been thus paid and delivered up acquitted, again take up the Subject &, in his character of Director General of the Liquidation, give Swan a farther Sum of 735000£. as a Supplementary & Second indemnity.

If after this, any thing could be extraordinary, it is the account itself on which this Second reimbursement is made; the basis of which is the pretext that Swan, when he reimbursed the holders of these Bills, had been obliged to pay them, not only the Capital but 10 Pr. Cent for damages, according to the custom at Boston, The reimbursement having been made by him, as he says, in that Town. For this loss he did not think himself compensated in a sufficiently liberal manner by the first reimbursement.

The first article in his net account is the Bill of Eschman which is charged as having been reimbursed by Swan in Boston, viz 450,000 for principal, 45,000 for the 10 per Cent, 25,777 for interest anterior, to the first reimbursement made by the Treasury, and in an other part of the account is added 59312£ being 12 1/ 2 per Cent on all these Sums, as a Commission to Dallarde, the partner of Swan, for having made the virements (negociations) in Paris, necessary to effectuate the reimbursement, and then 5 Pr Cent on the whole, as a Commission to himself which Sum being about 140,000£. deducting the first reimbursement were again augmented by Interest at 6 Pr. % from the 4th. Frimaire an 9 to the time it was paid; and all this was but a Supplementary indemnity, for the Sums Swan had paid on this Bill prior to the first Settlement and reimbursement made by the Treasury in the year Six.

As this Bill had been once definitively Settled and given up to the Treasury, one would expect that to induce the Director General of the Liquidation to come back upon that Settlement and give this Supplementary indemnity, Some proof had been offered that Swan had paid Some thing on the Bill, or at least that the Bill had been Sent to Boston where alone the 10 Pr. % Could be demanded, or if the Bill was never Sent to Boston, that Swan had endorsed it, So as to have been liable if Eschman had thought proper to Send it there, or at least that he had in some way been liable for Some thing; But no: The proof produced by Swan is an Account & declaration Signed by Eschman, in which he States that this Bill was originally drawn to his order (consequently he could never have had any Demand on Swan as endorser) that he, Eschman, delivered up the Bill to the Treasury at a time when only two months had accrued (Consequently the Bill Could never have been Sen⟨t⟩ to Boston by any one) that the Treasury paid the reimbursement directly to Eschman here at Paris (consequently neither the partner of Swan nor any other person could ever have made the virement for which Mr Defermon gave Swan 59312£.). The⟨re⟩ is not even any proof that a protest had ever been made & the probability is that none ever was made.

But if Swan had reimbursed the Bill, who ever heard that any one, and above all that the Treasury, paid as reimbursement full Capital, expences & interest with 10 Pr. Cent penal damag⟨es⟩ 12 1/ 2 Pr. Cent for virement to make the funds, & 5 Pr. Cent Commission to the holder? Demands like these, extended to the Bills which Swan had in fact purchased & endorsed, and of which he had received the reimbursement from the whole account on which This 735000£. has been paid as a Second Supplementary reimbursement, made Six years after a final Settlement on which the Treasury had paid the Same person for this object 49 1/ 2 per Cent more than it had received. This liquidation Seemed So extraordinary to the Minister of the Treasury that he Sent it back to the Director General of the liquidation for reexamination, and, it is Said, that Mr. Defermon would not Suffer it to go to the Bureauxs for an other Report, but declared that if this liquidation was to be touched again the Sum ought to be augmented rather than deminished. It is impossible to furnish proof that this was the manner in which all reexamination was Stiffled, but certain it is that no change was made in the liquidation of the Sum amounting to 735,000£.

Some other particularities relative to this astonishing liquidation will be examined in an other place, but our enquiries are not confined to a Single liquidation.

On the 30th: of Fructidor in the year 2 Swan Sold to the Republic the cargo of the young Sybrand for 498,461£. assigts., which Sum it was agreed he Should be authorized to export, 1/ 4 in Brandies, 1/ 2 in Wines, & 1/ 4 in goods of Luxury.

There were many hundred purchases made by the Republic at that period on Similar Conditions, and all exportation being at that time prohibited, the liberty to make Such exportations was at first regarded as of So Considerable value that it made a part of the price, almost as much as the assigts:, but the number of these permissions was Soon So augmented that they became of no value or of nearly none, So that very few of them were fully employed & many of them were not at all employed, but as the permissions were never annuled nobody ever thought they could demand an indemnity for not having employed them.

But Swan found So much favour with the Director General of the Liquidation that he Could demand an Indemnity for this object, and he Stated his Account in which he declared that he Sold the Cargo in fructidor an 2, That he wa⟨s⟩ paid the 498 461£ in full on the 9th. Frimaire an 3, That on the 15th. Messidor following, being 9 or 10 months after the Sale, he employed 103,315£: of the permit to export, and that the remaining 395,146£ assigna⟨ts⟩ worth 96,770£. money were not exported, and for not having employed the permit to export this 96,770£. the Director General of the Liquidation gave him 359000£,.value ecus.

To give any thing as indemnity for not having employed this permit to export is a Scandalous gaspillage (dilapidation) of the public funds; but to give an indemnity Calculated on a presumption that the goods if exported would have been Sold at near five Capitals net & clear of all expences requires a degree of impudence rarely to be met with.

The exorbitance of this Sum is the more extraordinary as the Director General was at the time he made this liquidation & during Some time before, had been examining and Settling Swan’s accounts with the Republic for great Numbers of just Such exportations, made by him for account of the Republic, which in lieu of producing found five Capitals clear of expences produced enormous losses and at the very moment the Director Gen⟨eral⟩ was giving Swan this enormous indemnity for not having exported 96770£. for his own Account, he was discharging the debet of Swan from Millions furnished him by the Republic for just Such exportations, as having produced almos⟨t⟩ total losses of the Capital.

Nothing can present these liquidations as more extraordinary or as more unjust; but there is yet an other Circumstance which may tend to explain the nature of the influenc⟨e⟩ which has produced Such miracles.

Tho’ nobody but Swan could obtain an Indemnity for not having employed their permissions to export goods, Still Swan could obtain it for others. He obtained a liquidation of 135000£. with Interest in all 160,000£. in the name of Whiteside, for not having employed a permit of this Kind resulting from a Sale of coarse Cloths. Whiteside had agreed to abandon to Swan 1/ 4 of what he could obtain, but after the liquidation was made a misunderstanding arose between them relative to the payment of this fourth part, amounting to about 40,000£. When this misunderstanding took place Swan wrote to Whitesides on the [  ] and a Second note dated the [  ] in which Letters he tells Whiteside that he (Swan) was to enjoy only 5 pr. Cent of the Sum Whiteside was to pay, That the residue was for others, & he tells him also that if he did not pay the, Liquidation would be annuled. On receiving this threat Whiteside refused flatly to pay the 1/4 of the Liquidation as he had agreed. He probably did not believe that his liquidation could be annulled, & at the Same time those in favour of Swan for exactly Simular objects, be maintained, but in fact on the 28 Vendre. an 13 the Liquidation in favour of Whiteside was annuled & those in favour of Swan at the Same time revised in the Cabinet of the Director General, approved & Sent to the Treasury for payment.

Liquidations just Such as we have mentioned were made in favour of Swan for near two Millions which were paid out of the twenty Millions furnished by the United States, & this payment created a deficit, which leaves an equal Sum of just debts unpaid.

These Liquidations of a Couple of Millions or Some thing less are Comparatively, but a Small branch of the accounts of Swan which have been Settled by the Director General of the Liquidation.

The much greater field for favour & for abuse is found in the accounts of his Agency for the Republic. In what manner this field has been in general gleaned is not Known. Two Samples only are Known to have escaped from behind the veil which is So Carefully drawn over all those Accounts.

In one of these Samples we See the debet of Swan discharged from about 125,000£. for So much put to the debet of one Tany, many years Since dead, & no reason whatever is assigned or pretended for giving this Credit to Swan or for Creating the debt against the dead Tany, except that Swan Says that he once held the Bills of this Tany for that Sum and that he gave them up to Tany without payment & without taking a receipt

In an other Instance Swan has Credit for 32900£. for So much put to the debet of Higgin⟨son⟩ who has not been in France Since the year 9 & it is not Known where he is. The Sole proof ⟨on⟩ which this Credit is given Swan & on which Higginson is declared debtor is the declaration of Swan that Higginson had Sold in his nam⟨e⟩ and as his attorney a quantity of Brandy & had not fully paid him

To create debts in this Manner against dead people and against people not to be found & give Swan Credit for them on no other proof than the declaration of Swan himself is an extravagance which no Circumstance Can exagerate, but the injustice is the more revolting as in the case of Tany it is well Known the Bills, Swan pretends to have given were paid to him by Tany and in the Case of Higginson the Declaration of Swan is opposed by So many well Known Circumstances that it is impossible it Should be true, as may be Seen by my late Supplementary Memorial respecting this claim.

Whether the residue of this vast account of Swan has been Settled in the Same manner will probably never be Known to any others than Swan & Mr. Defermon and perhaps one other person.

In all I have Said care has been taken to not Cite any errors or frauds Committed by verificators or by others in the Bureauxs of the Liquidation, all our observations have been Confined to decisions made in the cabinet of the Director General and to decisions on questions which could neither be mistated nor misunderstood.

Whether a Second reimbursement Should be made of Bills formerly reimbursed and given up to the Treasury acquitted, is a question which could not be mistated. Whether this Second Reimbursement Should be half the amount of the Bill or twice the amount of the Bill is a question that Mr. Defermon could not misunderstand. Whether Swan Should have an indemnity for not Comploying a permit to export 96770£. in merchandise is a question not to be misunderstood by any one, and whether this Indemnity Should be equal to Several times the value of the goods he was permitted to export was decided with full Knowledge of the Cause. Whether the Liquidation of Whiteside Should be annuled while those of Swan were maintained for the Same objects was a question which must have been understood by the Director General when he decided it, and his decission was accurately foreseen by Swan when he wrote to Whiteside that Such would be the decission, if he did not pay, according to his promise.

Decissions on questions like these we have Cited are the only fair Standard by which to estimate the talents & integrity of the Judge who pronounces them, & who Contrary to the Convention of 1803, & because the just & lawful rights of American Citizens here have been partially viewed &, in many cases, unnecessarily abandoned by your present Minister as well as his predecessor, has been permitted to Strip me and many others of their property.

I subjoin to this Copy of my letter of the 6th. Inst. to Genl. Armstrong with his reply, by which it appears that I am neither to be furnished with a Copy of the arrete mentioned, nor of any of the documents furnished by me in support of my Claim. Mr. Wardens verbal application I have reason to believe was made to a Clerk (Mr. Dubuisson) in the Treasury Department. It is fair to presume that our Minister did not think fit to make a formal application in my favor for those papers; without them I do not see that I can have any effectual remedy either again⟨st⟩ Higginson the pretended Debtor of this Government, or against Swan, to whose advantage in fact my property has been applied. With great respect I have the honor to be, Sir, Your Mo. Ob Servt.

Fulwar Skipwith

DNA: RG 59—CD—Consular Despatches, Paris.

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