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To James Madison from William Davies, 8 May 1790

From William Davies

Editorial Note

As the Virginia commissioner charged with settling the state’s accounts with the Union, William Davies had been in New York since early 1789 arranging and presenting vouchers and other evidence of the Virginia expenditures during the war. In conducting this business the commissioner worked closely with the Virginia delegation in Congress, particularly with JM, who was “zealous on this subject” (PJM description begins William T. Hutchinson et al., eds., The Papers of James Madison (vols. 1–10, Chicago, 1962–77; vols. 11—, Charlottesville, Va., 1977—). description ends , XII, 11–12 and n. 1; CVSP description begins William P. Palmer et al., eds., Calendar of Virginia State Papers and Other Manuscripts (11 vols.; Richmond, 1875–93). description ends , IV, 596–97, 607, 622–23; V, 39–40, 52, 56–57, 63, 71–72, 85, 90–91, 101–2, 105–6, 115, 125–26). Throughout the protracted debate over the assumption of state debts, JM had indeed been the zealous guardian of the commonwealth’s interests. To be palatable to Virginia and other states that had already discharged a large portion of their wartime debts, assumption, JM insisted, would have to be subordinate to the ultimate settlement of accounts. His overriding concern was that an immediate assumption would impede or perhaps prevent a final adjustment. If assumption ever took place, JM did not want Virginia to depend on such a settlement to obtain its full measure of justice (see speeches of 24 and 26 Feb., 1 Mar., and 22 Apr. 1790).

As if to confirm JM’s apprehensions, the board of commissioners on 30 April submitted to the House a preliminary report on the various state claims that was pointedly offensive to Virginia. The accounts on which the state’s claims were founded were vague, irregular, and disorderly, the commissioners wrote, thus leaving the House members to draw the inference that the claims probably exceeded the commonwealth’s actual expenditures. The authors of this report were John Taylor Gilman of New Hampshire and John Kean of South Carolina; the third commissioner, William Irvine of Pennsylvania, was absent. “North Carolina and Georgia are also stigmatized,” Davies wrote to Governor Randolph on 21 May, “but their Vengeance seems more particularly directed at Virginia. How far their own Speculations may have influenced their conduct, cannot be ascertained, but their Zeal for the Assumption is well known. The House were so little pleased with the Report, that they would not suffer it to be read and on the request of Mr. FitzSimmons with the general assent of the members, the printers and short hand writers were desired not to publish it” (Beverley Randolph to Washington, 4 Aug. 1790, with enclosures [DNA: RG 59, State Department, Miscellaneous Letters]).

Davies’s reply to this report is printed below. At the request of the state’s representatives, the Virginia commissioner also drew up a statement of Virginia’s claims with explanatory remarks. These documents, together with an extract from the 30 April report, were transmitted by Davies to Governor Randolph on 21 May (calendared in CVSP description begins William P. Palmer et al., eds., Calendar of Virginia State Papers and Other Manuscripts (11 vols.; Richmond, 1875–93). description ends , V, 156–57). The governor in turn forwarded copies of Davies’s letter and its enclosures to President Washington in August just as a bill for settling the state accounts was being enacted into law (Randolph to Washington, 4 Aug. 1790 [DNA: State Department]; Randolph to JM, 4 June and 10 Aug. 1790). While this bill was under consideration during the summer of 1790, JM, who had denounced the commissioners’ report as “a libel on the State” (Davies to Randolph, 21 May 1790), sought to dilute the influence of the board of commissioners. He supported an amendment that would have transferred much of the business to the Treasury Department and in effect added the secretaries of state and treasury to the board (N.Y. Daily Gazette, 2 June 1790; Gazette of the U.S., 7 July 1790). Although this amendment was not adopted, the bill passed by the House on 22 June provided for two additional commissioners (N.Y. Daily Gazette, 23 June 1790). The Senate struck out this provision, however, and also rebuffed JM’s attempt to reinstate the additional commissioners in a separate bill (DHFC description begins Linda Grant De Pauw et al., eds., Documentary History of the First Federal Congress of the United States of America (3 vols. to date; Baltimore, 1972—). description ends , III, 469, 510, 511, 513, 522–23, 548, 550, 556–57; U.S. Statutes at Large description begins The Public Statutes at Large of the United States of America … (17 vols.; Boston, 1848–73). description ends , I, 178–79).

The attempt to enlarge the board not only failed, but on 9 August Gilman and Kean (along with Irvine) were reappointed commissioners (DHFC description begins Linda Grant De Pauw et al., eds., Documentary History of the First Federal Congress of the United States of America (3 vols. to date; Baltimore, 1972—). description ends , II, 92, 93). This happened after Randolph had sent Davies’s letter and papers to the president for the express purpose of preventing their reappointment. Washington, however, could see no just cause for removing them after having inquired into their official conduct. He assured the governor that the unfavorable reaction to the commissioners’ report would induce such caution on their part in the future that Virginia would “have no cause to apprehend a premature or uncandid decision” upon its accounts. This forecast proved accurate, as from this time until the accounts were finally settled in 1793 the state’s claims were accepted with great liberality (Washington to Beverley Randolph, 24 Aug. 1790, Fitzpatrick, Writings of Washington description begins John C. Fitzpatrick, ed., The Writings of George Washington, from the Original Sources, 1745–1799 (39 vols.; Washington, 1931–44). description ends , XXXI, 94–95; Ferguson, Power of the Purse, pp. 323–24).

New York May 8th. 1790.

The Commissioner for settling the Continental Account of the State of Virginia having seen the report of the two Commissioners of the General Board to the House of Representatives begs leave to remark to the Senators and Representatives of Virginia,

That although it is not very evident how far the information called for by the House, rendered it necessary for the two Commisssioners to go into a discussion of the Conduct of the State Commissioner, yet Candor would seem to have required that they should so far have possessed themselves of facts, as not to ascribe to him transactions with which h⟨e⟩ was wholly unconnected, being in no measure concerne⟨d⟩ with the public Accounts till the period for presenting claims had expired; nor having ever had any communication with the District Commissioner, till within One Month prior to his leaving the State with the Papers. It is true that with an intention of defining more precisely the Claims of Virginia, the State Commissioner after his Arrival here did propose a recurrence to certain books and papers for that purpose: But when he found that the period limited by the general Board was too short for the object, that some of the public officers were unwilling to part with documents which had been officially committed to their Charge, and that no general principle of ascertaining the depreciation had been adopted, so as to have universal Operation through all the branches of the Account, it became obvious that the measure was not only impracticable for want of time, but unnecessary, as little more certainty could be hoped for as to the Amount of the just Claims of Virginia than already appeared in the general Statements which had been presented, which were formed on principles of as much Accuracy as the Occasion would admit, or as could have been expected after so extensive a destruction as that of near five years Vouchers. The Commissioner of Virginia, therefore resumed the employment in which he had been engaged, of collecting evidence to supply the loss of Vouchers, and of completing the Statements from the books and papers which had been left by the district Commissioner. These Statements have since been regularly delivered, partly to the Auditor of the Treasury, and partly to the General Board; tho’ from the Expression of the two Commissioners, “that no other or further Specification was made,” it should seem that this Circumstance was wholly unknown to them: And, indeed, from the terms in which they speak of the books opened by the late district Commissioner, it would appear that they were not acquainted with the existence of two other books delivered at their office, in which the whole of the Advances from the Treasury from the 13th. of September 1775 to the 4th. of January 1781 are distinctly Stated and have actually undergone the examination of former Commissioners from Congress.

The Remarks made by the two Commissioners on the Vouchers they have Specified, are so wholly incongruous to the modes and principles by which the state of Virginia settled with her Citizens, that it is difficult to affix to them any definite meaning that can apply to the Subject. It may be sufficient therefore to give some explanation of the Nature of these Vouchers. No. 396 was granted under a law which entitled the Citizen furnishing the Article to be paid in Six Months after date with interest and depreciation.1 This depreciation had no referrence to the scale, as the two Commissioners seems to suppose, for that was not formed till more than 12 Months afterwards, but was ascertained at the Commencement of every quarter by the grand jury of the General Court, making the price of Tobacco the Standard. No. 431 & 437 were given under laws which allowed no depreciation, but entitled the holder to prompt payment at the Treasury, or Authorized him to pay the Voucher to the Collector in discharge of an equal Amount of his tax at the rates fixed in the laws: And as there is nothing in either of these Vouchers which respects or in any degree militates with the Scale of depreciation, it is difficult to discover for what purpose they are introduced. No. 680, 685, 741 & 745 are all of them for horses impressed under special restrictions, and the depreciation on the specie Value ascertained from time to time by temporary regulations similar to what has been before mentioned. Every one of these Vouchers as well as those which have been before specified were given to the Citizens and settled by the state, some time before any scale of depreciation was established and while no other payments but paper were made at the Treasury. This circumstance will account at Once to the two Commissioners why the scale could not govern in the settlement with the Individuals as well as why specie Certificates were turned into Continental Money, “the necessity of which” to them it seems, “was not apparent.” After all it is humbly conceived that the principles and modes by which the State adjusted the Claims of her Citizens are not in ordinary Cases so properly the Objects for the enquiries of the General Board, as the proofs, that these Claims were actually adjusted and assumed.

[“]That it will be necessary to consider from whence, the amount charged arises, and the rate by which depreciated paper has been reduced to specie, as it will Materially affect the real specie Value of the claims” are truths not likely to be denied; and if the introduction of Voucher No. 445 was only to shew the powers of Calculation and to prove that an Article charged at a depreciation of 40 for 1 is rated fifteen times as high as at 600 for 1, it is probable the House will not think the information either new or very important. If however it is meant to insinuate that exorbitant prices were allowed to the Citizens, the Original letters, ready to be produced from the Commanding Generals of the Southern troops complaining of the restrictions imposed by the Government of Virginia on this head will evince the Caution and even parsimony of the State: And if we consider that the temporary rates of depreciation by which these claims were adjusted, were almost always fixed some time before the settlements were made, it will be evident that the payments to the Citizens and of consequence the charges against the Union, must in like manner in all these cases be invariably below the Appraised Value of the Articles furnished. But if it is meant that the claims are vague and indifinite for want of reduction by some Scale, it may be sufficient to reply that they are stated as they were actually settled with the individuals, neither Claiming 40 for 1 when the State settled at less, nor relinquishing the claim if it should be allowed to others.

Upon the whole if the two Commissioners in framing their report, had it in contemplation to criminate the Conduct of the Commissioner of Virginia, it may be doubted whether the Occasion was proper, or the object pertinent to the Views of the House: Or if their design was to discredit the Accounts of Virginia, the Vouchers do not appear to be well chosen for the purpose, nor duly understood by them, neither is it improbable that at least an equal number of doubtful Charges might have been selected with equal ease from the Accounts of any other state. More enquiry would have afforded the two Commissioners better information, and would probably have induced them to have avoided “a discussion,” which they profess to have been “highly disagreeable to them,” and which the concurrent sense of the House has pronounced to be unfit for the public eye.

Wm. Davies.

Clerk’s copy (DNA: RG 59, State Department, Miscellaneous Letters). Enclosed in Beverley Randolph to George Washington, 4 Aug. 1790.

1See Hening, Statutes description begins William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (13 vols.; Richmond and Philadelphia, 1819–23). description ends , X, 234. Copies of this and other vouchers referred to by Davies were enclosed in his letter to Governor Randolph of 21 May 1790 (see Beverley Randolph to Washington, 4 Aug. 1790, and enclosures [DNA: RG 59, State Department, Miscellaneous Letters]).

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