Report on Additional Sums Necessary
for the Support of the Government
Treasury Department Augst. 5th. 1790
[Communicated on August 7, 1790]1
[To the Speaker of the House of Representatives]
The Secretary of the Treasury begs leave respectfully to submit to the House of Representatives the Estimates contained in the Schedules A and B herewith transmitted.
That contained in the Schedule A relates chiefly to the current service, and to matters for which an immediate provision is obviously requisite.
That contained in the Schedule B relates partly to certain claims on the United States of a nature distinguishable from the mass of the public debt and therefore requiring some special disposition, and partly to objects which it appeared to the Secretary proper to bring into the view of the House, that it might be considered whether any reservation of funds was necessary on their account.
The item respecting the orders of the Superintendant of Finance was the subject of a Statement which accompanied a report to the House of the 24th day of September last;2 but was not then provided for. Two petitions preferring claims, for the satisfaction of which among others those orders were issued, one from Peter Anspach3 on behalf of Timothy Pickering late Quarter Master General and the other from Abraham Skinner4 late Commissary General of Prisoners, have been presented to the House during the present Session and referred to the said Secretary: pursuant to which reference he begs leave to state—
That those orders were issued to satisfy debts which had been contracted by the said late quarter Master General for supplies furnished and services performed in relation to his department, subsequent to the first of January 1782, before which time all transactions in paper money had ceased, and contracts and dealings had begun to be wholly carried on in Specie; and to discharge demands upon the United States on account of supplies and accommodations to the officers of the American army, in captivity during the late war.
The sums due on the former account were understood, when incurred, to be immediately, or in a short time payable in specie, in many instances by special contract, in others, from the course of the business. The then Quarter Master General alleges, and the allegation is supported by some evidence, that he and his assistants relying on being enabled to make due payment, have rendered themselves in a number of cases personally answerable for its being done.
The sums due on the latter account have been understood to be payable in like manner with those due on the former. Assistances to this effect have been repeatedly given; and correspondent expectations have been entertained by those to whom the money is due. The said late Commissary of Prisoners appears to have made himself personally liable in some instances and represents that he has done it in all.
Such having been the nature of both these species of claims, warrants in the usual course were issued by the Superintendant of Finance on the Receivers of the States of Rhode Island, New York & Delaware; which warrants not being satisfied, by reason of the want of means, were afterwards returned into the Treasury by the Officers to whom they were granted.
It has happened, that several persons have brought in the Certificates they received from the Quarter Master General and his deputies, to the Commissioner for settling the accounts of that department, to be cancelled and have received other certificates in lieu of them, which now constitute a part of the general debt. To what extent this has been done is not ascertained, nor can be so without going over an immense mass of cancelled papers.
It does not appear that this circumstance has attended the class of claims relating to Prisoners.
If an appropriation should be made, it can only operate for the benefit of those who have never made a different election by accepting in exchange the certificates alluded to. It is a rule necessary to be maintained in all cases that wherever such an election has been made the parties shall be concluded by it.
In respect to those claims which remain as they originally stood, The Secretary is of opinion, that they ought to be discharged in specie. And he is informed, that they have always been considered in this light at the Treasury, though the embarassments of the finances have unavoidably postponed the payment.
The expences which have been incurred in relation to the Treaties5 contemplated by the Acts of Congress of the 22nd. of October 1787 and 2d. of July 17886 appear to exceed the sums which have been actually advanced on account of them. This excess is not finally ascertained. The expediency of an appropriation equal to the sum remaining unpaid of the grant of the 2d. of July to answer such further demands as may be liquidated and admitted in the course of the Treasury is respectfully submitted.
An estimate of the probable expence of a Treaty with the Indians of the Wabash and Miami rivers is inserted, in order that a provisional reservation of a competent sum may be made, if it should be judged eligible.
The Statement respecting the warrants issued by the late Board of Treasury is intended as explanatory of the disposition of the sum of One hundred and ninety thousand dollars appropriated by the Act of the 29th day of September last,7 towards discharging those warrants.
In regard to the debt due to foreign officers,8 the Secretary begs leave to submit to the House of Representatives the expediency of directing the same to be paid out of the Loan of Twelve Millions of dollars, which is authorised by the Act of the fourth instant making provision for the public debt:9 In addition to other cogent inducements for paying off this debt, is the circumstance that it bears an interest of six per Cent, payable in Europe.
It will occur to the House of Representatives that all the revenues which shall exist at the close of the present Session are appropriated to the payment of the interest of the public debt, subject to such priorities and reservations as may result from appropriations heretofore made, or those which may be made, during the present session. Hence it will be perceived to be necessary to reserve and appropriate, before the termination of the session, such proportion of the revenues which have accrued, or may be expected to accrue in the course of the present year, as may be sufficient to satisfy, not only the demands on the treasury already established, but those which are likely to be established in the progress of the adjustments of depending claims, resulting from the transactions of the former government. A reservation and appropriation of fifty thousand Dollars for this purpose will, probably be found convenient.
The Secretary begs leave further to state, that there is a probability of a surplus of about One Million of Dollars accruing from the duties now in operation to the end of the present year over and above all the sums for which appropriations have been heretofore made and are now proposed: And to submit it as his opinion, that it will be expedient to authorise the application of this surplus to purchases of the public debt in the Market.
As long as these purchases can be made at rates below the true value of the Stock, there will be an absolute gain of all the difference to the Government. And very considerable savings to the nation will result from raising the price of Stock by this operation; inasmuch as foreigners must pay a higher price for what they buy.
It may even be worthy of consideration, whether authority ought not to be given to extend the purchases beyond the limit of that surplus upon a credit not exceeding a certain specified and short term; relying for this purpose on the aid of Loans.
In the execution of an arrangement of this nature, due regard may be had to the possibility that the collection of the duties accruing in the ensuing year, may not keep pace with the demand for paying the early interest.
All which is humbly submitted
Secretary of the Treasury
DS, RG 233, Reports of the Secretary of the Treasury, 1790–1791, Vol. I, National Archives.
2. H’s use of this date is confusing, since he made two reports at this time on the same subject. On September 17, 1789, the House directed the Secretary to report an estimate of money for the civil list and for paying outstanding warrants of the Confederation Treasury Board. H replied in a report dated September 19 which the House received September 21. On September 23 the House asked H for a detailed analysis of these unpaid warrants. This second report is the one to which H is referring as dated September 24. Actually H’s letter to the House bears the date September 25, but the Register, Joseph Nourse, dated the statistical portion of the report September 24. See “Report on the Estimate of the Expenditure for the Civil List and the War Department to the End of the Present Year,” September 19, 1789, and “Report on a Particular Statement of the Warrants Issued by the Late Superintendent of Finance and by the Board of Treasury,” September 25, 1789.
3. For background to Anspach’s petition, see Timothy Pickering to H, November 19, 25, 1789; H to Pickering, November 19, 1789; H to Anspach, December 5, 1789; Anspach to H, December 30, 1789, July 2, 1790.
On July 1, 1790,
“A petition of Peter Anspach, of the City of New York, in behalf of Timothy Pickering, late Quartermaster General of the Armies of the United States, was presented to the House and read, praying the liquidation and settlement of a claim of the said Timothy Pickering against the United States.
“Ordered, That the said petition be referred to the Secretary of the Treasury, with instruction to examine the same, and report his opinion thereupon to the House.” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826). description ends , 254–55.)
4. On March 2, 1790, “A petition of Abraham Skinner was presented to the House and read, praying to be reimbursed for moneys advanced, and losses sustained by the petitioner, whilst Commissary General of Prisoners of the United States, during the late war” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826). description ends , 166). It was ordered that the petition lie on the table, but on July 27, the House ordered that Skinner’s petition “be referred to the Secretary of the Treasury, with instruction to examine the same, and report his opinion thereupon to the House” (Journal of the House, I description begins Journal of the House of Representatives of the United States (Washington, 1826). description ends , 282).
5. These were the treaties of Fort Harmar negotiated by Arthur St. Clair in January, 1789. One of them was with the Six Nations (except the Mohawks) and the other was with the Wyandots and western tribes.
6. These acts provided funds for a treaty. However, the act of 1788 restricted treaty expenses to $8,000 and stipulated that the remaining $26,000 be used to extinguish Indian claims (JCC description begins Journals of the Continental Congress, 1784–1789 (Washington, 1904–1937). description ends , XXXIII, 696; XXXIV, 285–86).