From Oliver Wolcott, Junior1
T D C O. Aug 7. 1793
I have perused a Letter dated July 30th. 1793 addressed by Mr Andrew G. Fraunces to the President of the United States,2 and agreably to your request I now communicate a statement of such facts as have come to my knowledge in relation to the claim he has adduced.
The principal funds for satisfying demands upon the United States during the administration of the late Board of Treasury, were the proceeds of foreign Loans, and the requisitions of Congress upon the States—the supplies from these sources were aided by negociations of the paper emitted in pursuance of the Act of Congress of the 18th. of March 1780,3 and by monies recd. for debts due to the public.
For some time after the organization of the Board of Treasy.,4 the Treasurer5 was absent from the seat of Government, this rendered it necessary for the Commissioners to make an arrangement for receiving public monies & entering into the detail of payments. This business was generally transacted by William Duer the Secy. of the Board; the same practise was occasionally continued after the arrival of the Treasurer. It is a fact that a great proportion of all the money negociations of the UStates during the administration of the Board of Treasy. were executed without the immediate Agency of the Treasurer.
It was however contemplated by the system then adopted, that all receipts & expenditures should finally appear in the Treasurers Accounts. Warrants were therefore drawn on the Treasurer for expenditures, and Warrants in favour of the Treasurer, for Receipts.
As it was frequently the case, that there were no monies in the hands of the Treasurer6 it was customary for the board to discharge Warrants issued on the Treasurer, out of monies in the hands of their Secy. Mr. Duer, or by drafts on the Receivers of Continental Taxes—in such cases, the Warrants frequently remained for a considerable time in the possession of the Board or of their Secretary. After the drafts which were issued in payment of Warrants on the Treasurer, had been discharged by the Receivers of Taxes, they were remitted to the Board of Treasury, whereupon Warrants were issued in favour of the Treasurer on said Receivers.7 The Secy. of the Board, then presented both descriptions of Warrants to the Treasurer, who charged the Warrants drawn on him, to the United States, and indorsed his name on the Warrants in his favour, as evidences of payments into the Treasury.
These transactions however, as they respected the Treasurer, were merely matters of form—in neither case was any money paid or received by that Officer—the Warrants on the Treasurer were in fact discharged by the Secy of the Board or by the drafts of the Board on the Receivers of Taxes—and the sums acknowledged as received by the Treasurer were nothing more than counter entries to ascertain the sums paid by the Receivers of Taxes on the drafts of the Board.
In some instances however a different mode was adopted. Warrants were drawn on the Treasr for disbursements, and Warrants in favour of the Treasurer on the Recivers of Taxes for equal amounts, directing the payments of monies into the Treasury. In such cases both descriptions of Warrants were presented at the same time to the Treasurer—the claimant endorsed the Warrants on the Treasurer as evidence that he had recd. satisfaction, & the Treasurer endorsed the Warrants on the Reciver, which were delivered to the claimant & on which he was to receive payment from the Reciver of Taxes.8 Though it would in such a case appear, as if monies had been recd. and paid by the Treasurer, yet in fact nothing was done except a mutual indorsement & exchange of Warrants, and the Warrant on the Reciver of Taxes, could justly be considered in no other light, than an anticipation upon the Revenue.9
These observations are made to explain the general course of business at the Treasury, during the administration of the late Board & to prove, that the business of issuing Warrants & reciving & paying public monies was essentially concentered in the Board of Treasury, and the Recivers of the public Taxes. The Treasurer in fact did little more than register the receipts & payments of the Board or their Secy. & this was frequently done by him a considerable time after the transactions were compleated. In all or most of these transactions William Duer was the principal & immediately efficient Agent.
The accounts of Mr. Duer, as the Secy or agent of the Board of Treasury have not been adjusted, repeated applications have been at different times made to him & to the late Commissioners,10 which proving ineffectual, a suit has been instituted, which is still depending.11
The records of the Register of the Treasury were founded solely on actual settlements, on on Warrants drawn by the Board on, or in favour of the Treasurer; it was not the practice at that time for the Register to record or enter, the receipts of the Board or their Secretary, or the drafts on the Recivers of Taxes; it has therefore been difficult for the present Treasury Department to acquire a competent knowledge of the business transacted by their predecessors; though it has been rendered certain that considerable sums of specie, paper bills of the new Emissions12 and Indents of Interest,13 came into the hands of Mr. Duer, for which no accounts have been rendered.
It has not yet been possible to ascertain the amount of the sum which remain to be accounted for, as the accounts of the late Treasurer, & of some of the Recivers of Taxes are unsettled; Some of the facts now stated have been recently developed in the course of examination; to what extent, similar negotiations may hereafter be discovered cannot be conjectured.
It is however necessary to observe that drafts on the Recivers of Taxes, issued by Jno. Pierce Esq. late PMG under authority from the late Board Treasury, have lately been presented at the Treasury, although it has been generally understood that no such drafts were to be discharged by the existing Department.14
From the course of the business, & from the facts before stated, it appears, that though a Warrant was regularly drawn, & not paid by the late Treasurer, & though a Warrant of anticipation upon the Revenue, was regularly issued, & not paid by the Receiver upon whom drawn, yet it will not conclusively follow that said Warrants have not been discharged in the manner usually practised under the administration of the late Board of Treasury—that considerable funds which came into the hands of the Secy. of the Board, have never been accounted for, is certain—& it is equally certain that the said Agent has repeatedly declared that he expected to account for said funds by surrendering Warrants of the Board which he had discharged.
That the Warrants of the late Board which have been discharged by the present Treasury Department, were not in this predicament, can I believe be made satisfactorily to appear, a great proportion of them were drawn for advances to the Secy at War, Pay Master General, & for Supplies, and were never negotiated.
That the Warrants for which Mr. Francis claims payment, have been discharged by Mr. Duer, though they now appear as claims upon the Treasury, is rendered indisputable from the following circumstances.
Since the failure of Mr. Duer,15 the same Warrants have been presented for payment by different persons—at one time by a Clerk of a known agent & broker of the said Duer,16 as considering the long time which the claim had remained dormant, this circumstance, taken in connection with others, created a suspicion that the Warrants had been improperly put into circulation. Special enquires were made at this Office, when the demand was renewed by Mr. Fraunces.
It was then confessed to me by said Fraunces, that it was well known to him before he made the purchase, that the Warrants had been in the possession of Mr. Duer, & that they had been pledged by him, in the time of his embarrassment for a Loan of money—that Mr. Duer knowing said Warrants to be in the possession of said Fraunces had requested him to detain them, that he had advised with Council, on the subject and was informed, that he could not detain them without being exposed to a suit—that afterwards Mr. Duer requested said Fraunces to purchase said Warrants & promised to allow him a handsome Commiss~. for the service. In the same conversation Mr: Fraunces alledged that he knew of other Warrants in a similar predicament, to the amount of about Seventeen thousand Dollars, and he then promised to state in writing the foregoing and other particulars within his knowledge, for the information of the Treasury. This promise has not been performed. The Auditor of the Treasury17 will I presume recollect, that I communicated this information to him, in June last, or the beginning of July.
The reply given by me, to Mr. Fraunces was to the following effect—that it was well known to have been the usage for Mr. Duer to discharge Warrants, as the Secretary or Agent of the Board of Treasury, & that funds had accrued or been placed in his hands, for which he had not accounted—that he had often represented that he expected to account by surrendering Treasury Warrants—That it was a question, whether Warrants which had been discharged by Mr. Duer, & which had been afterwards negociated by him, could afford a claim upon the public—that at any rate it was necessary, that the question should be fully considered, and that it would be proper for him & all persons possessed of like claims to lodge them with the Auditor of the Treasury—that this mode would certainly afford a fair opportunity of rendering justice to the public & to the claimants—and that in case it was judged improper for the Treasury to interfere, a fair & impartial Statement of the question would be laid before Congress.18
I close this representation by observing that the Act entitled “an Act relative to claims against the United States not barred by any act of limitation & which have not been already adjusted” passed on the 12th. of February 1793,19 was calculated for the express purpose of producing a final decision upon claims founded on Warrants Certificates & other documents, which had been usually considered as evidences of liquidated Debt & that it is made the special duty of the Accounting Officers of the Treasury to report to Congress upon all claims of the foregoing descriptions as shall not be allowed by them to be valid.
ADf, Connecticut Historical Society, Hartford; copy, RG 59, Miscellaneous Letters, 1790–1799, National Archives.
For background to this letter, see Andrew G. Fraunces to H, May 16, June 10, July 1, August 2, 4, 1793; H to Fraunces, May 18, July 2, August 2, two letters of August 3, 1793; Washington to H, August 3, 1793; Washington to Fraunces, August 3, 1793; H to John M. Taylor, August 6, 1793.
2. ALS, RG 59, Miscellaneous Letters, 1790–1799, National Archives.
4. On May 28, 1784, Congress created the Board of Treasury by “An Ordinance for putting the department of finance into Commission” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXVII, 469–71). On September 21, 1787, the term of the board was extended to November 10, 1789 (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XXXIII, 509–10).
5. Michael Hillegas. See Fraunces to H, May 16, note 19.
6. The Board of Treasury wrote several letters to Washington during July and August, 1789, concerning the specie shortage which existed during its administration (LC, George Washington Papers, Library of Congress).
7. In the report which the Board of Treasury submitted to Washington on June 11, 1789, there is no mention of the intermediate form of a draught on the receivers of taxes—as distinguished from a warrant drawn on a receiver in favor of the treasurer. In describing the duties of the register the report states that it is his duty “to keep all the public accounts both of receipts and Expenditures, and to register all warrants on the Treasurer or others before the same are paid” (LC, George Washington Papers, Library of Congress).
8. For Joseph Nourse’s explanation of this method of drawing warrants in connection with Warrant No. 236, one of those presented by Fraunces, see Nourse to Richard Harrison, August 2, 1793, quoted in the introductory note to Fraunces to H, May 16, 1793.
9. The report of the Board of Treasury of July 23, 1789, to George Washington concerning the condition of the Treasury Department estimated that a total of $143,626.28 had been issued in unpaid warrants between April 21, 1785, and March 31, 1789 (LC, George Washington Papers, Library of Congress). For later estimates which H included in his reports, see “Report on a Particular Statement of the Warrants Issued by the Late Superintendent of Finance, and by the Board of Treasury,” September 25, 1789; “Report on Additional Sums Necessary for the Support of the Government,” August 5, 1790.
For lists of the warrants which were paid after the establishment of the new government, see “Report on the Receipts and Expenditures of Public Monies to the End of the Year 1791,” November 10, 1792; “Report on an Account of the Receipts and Expenditures of the United States for the Year 1792,” December 18, 1793.
10. The commissioners of the Board of Treasury from 1785 to 1789 were Arthur Lee, Samuel Osgood, and Walter Livingston.
14. One such draft was presented at the Treasury under “An Act relative to claims against the United States, not barred by any act of limitation, and which have not been already adjusted” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 301–02 [February 12, 1793]); ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Claims, I, 175, 181). See also “Report on the Memorial of the Officers of the South Carolina Regiments,” March 18, 1790.
16. Jasper Murdock.
17. Richard Harrison.
18. The auditor’s report on these claims was completed on January 19, 1795 (ASP description begins American State Papers, Documents, Legislative and Executive, of the Congress of the United States (Washington, 1832–1861). description ends , Claims, I, 172–81).