George Town and the City of Washington was the Stage upon which Morris & Nicholson acted the last scene of swindling and imposition. They contracted debts and issued notes to an immense amount here, and such was the folly of a numbers of our inhabitants that just before they sunk, they bought up their paper to a very great amount, which paper had been issued a considerable time before.

Morris & Nicholson apprized of these circumstances, and finding that they could no longer raise money in their ordinary modes of negotiation, proposed as they termed it, to fund their debts. That is they agreed & proposed, that if any holder of their paper would advance to them in cash one third of the amount of the paper so [p. 509] held, they would secure the whole sum by a Mortgage on their city property.

U. Forrest, Benjamin Stoddert, Gustavus Scott and Philip B Key formed a company, united the paper they held, made the advance demanded, and received the proposed Mortgage. The Mortgage which they thus received included a number of lots sold by the Commissioners to Morris Nicholson & Greenleaf, for which they had not made full payment. The Bal. due to the Comrs, for the purchase money of these lots, amounted, I am told, to $35,000; no doubt it amounted to a very large sum of money. By the terms of sale, made by the Commissioners to Morris Nicholson & Greenleaf, these lots were to be resold for any default in the payment of the purchase money. This default happened, the lots were resold, and Uriah Forrest purchased them for the benefit of the funded debt as above stated, that is for himself, Scott, (one of the City Commissioners) Stoddert, & Key,1 upon a credit I believe of sixty days. After this purchase, and before the day of payment came round as I have always understood, and beleive, the Maryland Legislature met. Uriah Forrest a Senator proposed to the Legislature to make a loan of $50,000 to the Commissioners of the City, to enable them the better to provide for the reception of Congress, and thereby to secure the residence of that body upon the Potomac. His efforts were a long time unsuccessful, however just before the close of the session, when many of the Members had gone home, to the great astonishment of many, he succeeded, procured the loan, and also procured himself to be taken as one of the Securities to the State for the repayment of the money.

When he returned home, it was whispered and beleived, that he prevailed upon the Commissioners to consent, that the money which he owed them should not be drawn from his hands, except to pay the debt to the State of Maryland for which he stood bound as Security. This trick was supported upon the plausible pretext, that as Forrest was bound for them in a large Sum of Money, it was necessary to secure him for the risque he run, and that could not be better done than by letting him hold as an indemnity the money he owed them. Scott and Thornton it is said thought this reasonable, White it is said remonstrated. Two however made a majority, and the result was, that the Legislature of Maryland, to promote the progress of the City, and secure the residence of Congress, loaned to Uriah Forrest and others 35,000$ and to the Commissioners $15,000, and they became mutually bound for each other to repay the money.

That Scott should think this a proper arrangement, no person wondered, but Thorntons conduct excited great surprize, until it [p. 510] was understood, and I believe it is true, that Thornton too was a purchaser of lots upon credit, that finding indulgence necessary, he found no means of gaining it so easy and so certain as that of a mutual exchange of favours with his brother Commissioner Scott. It was also said that Thornton owed money in Bank, to continue his paper there he needed an indorser, he found it difficult to get one, and was upon the point of being denied further credit, and called upon for payment, when U Forrest very generously came forward and indorsed for him. This was a friendly act and merited some return

I this moment heard that you were at this time deliberating upon this very subject. I accidentally saw a note from Doctor Thornton to his friend, in which he mentions that U Forrest had written you a letter upon this business, and that he Thornton had made some statement upon the subject, which had been handed to you. I thought I saw a settled design to deceive you by false statements. An enemy to fraud I felt it my duty to represent to you the transactions as they have been represented among us, and as they are beleived in truth to be.

The time when Forrest purchased these lots, the terms of credit given to him, the time when the State loaned the money, and the amount of the Debt from Forrest to the Commissioners will certainly appear from their books. Whether Thornton is a purchaser upon credit and has remained undisturbed for the payment, tho’ the time in which it ought to have been made has passed, may be also seen there. I will state it as a fact within my own knowledge that Scott was interested with Forrest in these purchases, if that fact does not appear from the Commissioners proceedings

I have the Honor to be with great respect and esteem Your Obedt. Servt