The Secretary of state thinking it his duty to communicate to the President his proceedings of the present year for transferring to Europe the annual fund of 40,000 Dollars appropriated to the department of state (a report whereof was unnecessary the two former years, as monies already in the hands of our bankers in Europe were put under his orders)

Reports

That in consequence of the President’s order of Mar. 23. he received from the Secretary of the Treasury Mar. 31. a warrant on the Treasurer for 39,500. Dollars:1 that it being necessary to purchase private bills of exchange to transfer the money to Europe, he consulted with persons acquainted with that business, who advised him not to let it be known that he was to purchase bills at all, as it would raise the exchange, and to defer the purchase a few days till the British packet should be gone, on which event bills generally sunk some few percent.2 he therefore deferred the purchase, or giving any orders for it till Apr. 10. when he engaged mister Vaughan (whose line of business enabled him to do it without suspicion) to make the purchase for him: he then delivered the warrant to the Treasurer,3 & received a credit at the Bank of the U.S. for 39,500. D. whereon he had an account opened between ‘The Department of state & the Bank of the U.S.’ that mister Vaughan procured for him the next day the following bills

averaging 4s. 7 38/100 d. the dollar, or about 2½ per cent above par, which added to the 1. per cent loss heretofore always sustained on the government bills (which allowed but 99 florins, instead of 100. d[itt]o. for every 40. dollars) will render the fund somewhat larger this year than heretofore: that these bills being drawn on London (for none could be got on Amsterdam but to considerable loss, added to the risk of the present possible situation of that place)8 he had them made payable to mister Pinckney, and inclosed them to him by Capt. Cutting, in the letter of Apr. 12. now communicated to the President, and at the same time wrote the letters of the same date to our bankers at Amsterdam & to Colo. Humphreys, now also communicated to the President, which will place under his view the footing on which this business is put, and which is still subject to any change he may think proper to direct, as neither the letters nor bills are yet gone.9

The Secretary of state proposes hereafter to remit in the course of each quarter, 10,000 D. for the ensuing quarter, as that will enable him to take advantage of the times when exchange is low. he proposes to direct at this time a further purchase of 12,166.66 D. (which with the 500. D. formerly obtained & 17,333.33 now remitted, will make 30,000 D. of this year’s fund) at long sight,10 which circumstance with the present low rate of exchange will enable him to remit it to advantage.

He has only further to add that he delivered to mister Vaughan orders on the bank of the U.S. in favor of the persons themselves from whom the bills were purchased, for their respective sums.