James Madison Papers
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To James Madison from Alexander J. Dallas, 15 November 1814

From Alexander J. Dallas

Treasury Department, Nov. 15, 1814.

Mr. Dallas has the honour to submit to the President, the following views of the case of Mr. Jacob Barker, a subscriber for 5,000,000 of dollars, to the ten million loan, under the contract of the 2d of May, 1814, printed in the Appendix to Mr. Campbell’s report of the 23d of September last.1

I First View.

1. The contract was concluded in the terms of Mr. Barker’s offer of the 30th of April, and Mr. Campbell’s acceptance, dated the 2d of May, 1814. The terms were different from those proposed in the Treasury advertisement; and, particularly, in this respect, that in the advertisement, it was stipulated, that “on failure of payment of any instalment, the next preceding instalment should be forfeited;” but in the contract, it was agreed, that “on the payment of each instalment, and satisfactory assurances for the payment of the others, funded stock should be issued.”2 What assurances were given, does not appear from the records of the Treasury; but it must be presumed, that they were satisfactory, as funded stock was issued, upon the payment of the first and second instalments of the loan.

2. The stock deliverable on the payment of each instalment, was thus separated from the mass of the subscription; and the contract, as to each instalment, seems to have become an executed contract, in the hands of the contractor, as well as of his assignees.

3. From the nature of the original contract, connected with the advertisement, it was implied that a subscription might be divisible into a number of shares, and that every owner of a share, complying with the terms, in relation to his share, could not be affected by the conduct of the owners of the other shares. It is understood, that this was the case in relation to Mr. Barker’s subscription for 5 millions of dollars; and that some of the sharers, in that subscription, have actually complied with the stipulations of the contract.

4. Under these circumstances, it is believed, that Mr. Barker’s contract must be executed generally, without discriminating between the holders of the stock, original or derivative.

II. Second View.

1. The contract of Mr. Barker stipulated, that “if any part of the sum of 25 millions of dollars, authorized to be borrowed by the act of the 24th of March, 1814, should be borrowed upon terms more favorable to the lenders, the benefit of the same terms should be extended to the persons who might then hold the stock, or any part of it, issued for the present loan of ten millions.”3 The case of the stipulation occurred; and Mr. Barker’s contract is to be executed by paying to the persons entitled, the difference between 88 for each hundred dollars, the terms of the contract of the 2d of May, and 80 for each hundred dollars, the terms of the subsequent contract of the 31st of August, 1814. It is, therefore, proposed to issue the supplemental stock, for the difference, to the persons entitled, with interest from the 31st of August, one thousand eight hundred and fourteen.

2. By the opinion of the attorney general (which has already been submitted to the President) the holders of the original stock, at this time, are entitled to receive the supplemental stock; the condition being considered as attached to the stock, and not to the contract. It is, therefore, proposed to issue the enclosed notification, and to address the instructions to the comptroller, which are contained in the enclosed draft of a letter, for executing the contract, according to the Attorney General’s opinion.

III. Third View.

1. It appears from Mr. Campbell’s report of the 23d of Sept. 1814, that “there was paid into the Treasury on account of the loan of 10 millions, prior to the 1st of July, 6,087,011 dollars, leaving to be paid, after that day, 3,708,045 dollars; and of this sum, a failure of payment on the days fixed by the terms of the loans, of about 1,900,000 dollars, took place.”4 Mr. Barker’s failure in making payment of the third and fourth instalments of his subscription, amounted to 1,717,500 dollars; and there was a failure of 150,000 dollars in the proposal of William Whann in behalf of R.C. Jennings.

2. But Mr. Barker suggests, that he can justify his conduct, and relieve himself from all responsibility, by shewing a failure, on the part of Mr. Campbell, in affording certain facilities which were promised. It is not, at present, deemed necessary to investigate the foundation of Mr. Barker’s suggestion; but, certainly, no evidence to support it is found on the files of the Treasury. The failure to pay the third instalment of Mr. Barker’s subscription (without deciding who was to blame) had the effect to depress the stock market; and, indeed, the original condition of Mr. Barker’s contract was not calculated to raise it.

3. If, however, it should even [sic] be deemed expedient to pursue Mr. Barker for the failure in his contract; or if he should ever apply for any benefit, or emolument, on account of the contract; the personal responsiblity of that gentleman will remain open for a proper enquiry and decision.

Upon the whole, it has been the occasion of much regret, mortification and trouble, that Mr. Campbell did not himself provide for the execution of the contracts arising out of the ten million loan: but with all the official information, that I can collect, and, particularly, from the gentleman who assisted Mr. Campbell, at the time of the contracts, I have formed the conclusions, that are now submitted to the President, for his consideration.

RC (DNA: RG 217, Office of the First Comptroller, Letters Received from the Secretary of the Treasury). Filed with the RC is an undated note from JM to Dallas: “These papers under a cover addressed to the Secy. of the Treasury, were put into the hands of the Secy. of war who was to hand them to the Secy. of the Treasury expected to be seen by him very shortly after. Owing to some misunderstanding, they are just returned to me. They will of course be used as intended by Mr. Dallas, no objection to them occuring,” with Dallas’s instruction to Treasury Department chief clerk Daniel Sheldon written above it: “Mr. Sheldon will please to issue the notice &c.” Also filed with the RC is Sheldon’s 21 Nov. note to Comptroller of the Treasury Ezekiel Bacon: “Mr. Dallas, late on Saturday, directed the measures for completing the execution of the contract relating to the 10 million loan, to be suspended. The Comptroller is requested not to issue the instructions to the Commissioners of Loans, until further advised on the subject.”

1For the terms of the 2 May 1814 contract, Barker’s subscription to the loan, and his subsequent default, see George W. Campbell to JM, 4 May 1814, PJM-PS, description begins Robert A. Rutland et al., eds., The Papers of James Madison: Presidential Series (8 vols. to date; Charlottesville, Va., 1984–). description ends 7:454–55 and n. 1. In addition to Campbell’s 2 May 1814 letter to Barker, accepting his 30 Apr. 1814 offer to lend the government $5 million, Appendix “B” of Campbell’s 23 Sept. 1814 report included his 4 Apr. 1814 advertisement for loan proposals and the text of Barker’s offer (Letter from the Secretary of the Treasury, Transmitting His Annual Report [Shaw and Shoemaker description begins R. R. Shaw and R. H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819 (22 vols.; New York, 1958–66). description ends 33279], 17–19).

2Dallas’s latter quote was taken from Barker’s 30 Apr. proposal rather than Campbell’s 2 May 1814 acceptance (Letter from the Secretary of the Treasury, Transmitting His Annual Report [Shaw and Shoemaker description begins R. R. Shaw and R. H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819 (22 vols.; New York, 1958–66). description ends 33279], 18–19).

3Dallas quoted from Campbell’s 2 May 1814 acceptance (ibid., 19).

4Ibid., 13.

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