James Madison Papers
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To James Madison from Albert Gallatin, 5 January 1804

From Albert Gallatin

Treasury Department January 5th: 1804


I have the honor to return Mr. Erving’s letter of the 28th: Ultimo and its enclosures.1

It appears that, since Messrs. Bird Savage & Bird’s, failure, Mr. Erving has kept with Messrs. Lees & Co: an account of the monies belonging to the fund for the prosecution of Claims. This is contrary to the general principle which had been adopted in relation to the remittances made by this department for similar objects. The proceeds of these last were directed to remain in the hands of the Bankers of the Department of State (formerly Bird Savage & Bird, now Francis Baring & Co:) and to be disbursed by them, in conformity with the directions of Mr. Erving but without passing through his hands. This deviation is productive of a double inconvenience: as we keep no account with Messrs: Lee, we have no means of ascertaining whether the balance stated by Mr Erving to be in their hands is actually there. And whilst the United States have monies lying with those Gentlemen, they are obliged to pay interest to their own Bankers (Baring & Company) for their advances. The same observations apply with equal force to the large sum belonging to the United States, which Mr. Erving states to be yet in the Bank of England, although he had been instructed by the Department of State, to pay over to Messrs: Baring all the sums which he might receive for the United States on accot: of the advances heretofore made by Government for the prosecution of Claims.

It also appears that Mr: Erving, in his account as Agent for the prosecution of claims blends together the sums received and disbursed for the United States, with those which he may receive for individuals and for which he is accountable to them and not to the Treasury.

Finally neither his accounts for the prosecution of claims, nor those for the relief to American Seamen are accompanied with any Vouchers; and there is some difficulty in defining what shall be received as proper vouchers of his accounts of monies receiv’d from individuals in re-payment of the advances made by the United States for the prosecution of Claims.

At present it appears to me that the most eligible steps to be adopted will be an instruction from the Department of State to Mr. Erving directing him

1st— To pay immediately to Messrs. F. Baring & Co. all the monies which he may have received on account of the United States, whether the same be in the Bank of England or in the hands of Messrs. Lee or, of any other person, and whether received in repayment of advances for the prosecution of Claims or from any other source.
2dly.— To render to the Treasury Departmt. in conformity with the instructions which he may receive from that department, all his Accounts of monies received and disbursed on account of the United States, either as Agent for the prosecution of Claims or as Agent for the releif of Seamen or for any other purpose.
3dly. not to blend in the accounts thus to be rendered to the Treasury, and which are to include the receipts & disbursements on account of the United States any account of monies received for the use of individuals.

How far it may be proper for Government to require him to accot: for the sums which as public Agent may have been paid to him for individuals it is for the Department of State to decide; but it is evident that the Treasury cannot have any agency or controul respecting that branch of Mr Erving’s transactions.

As soon as you shall have communicated the instructions which you may determine to give him, I will write to him explaining the manner in which his accounts must be stated & supported.2 I have the honor to be with the highest respect Sir, Your Obedt: Serv.

Albert Gallatin

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