On December 16, 1793, the Speaker of the House of Representatives “laid before the House a Letter from the Secretary of the Treasury, requesting that a new inquiry into his official conduct may be instituted, in some mode most effectual for an accurate and thorough investigation; which was read, and ordered to lie on the table.”1 Because of Republican criticism of the manner in which the 1793 investigation into the Treasury Department had been conducted, Hamilton had decided during the early part of the summer2 to make this request when Congress reconvened.
After Hamilton’s letter had been read, William B. Giles of Virginia, who had directed the 1793 inquiry, proposed several resolutions concerning the examination and suggested that a committee be formed to report to the House.3 Giles, however, did not press for immediate consideration of his resolutions, for as he pointed out on February 24, 1794, he had thought that it “might have been deemed a violation of delicacy and propriety” to pursue a general investigation while the Fraunces affair4 was being examined. At the same time he stated that after the Fraunces petition had been disposed of “the delicate crisis of our external affairs” precluded a discussion of the examination of the Treasury. As a result, it was not until late in February, 1794, that the House turned to Giles’s resolutions.5
Meanwhile Albert Gallatin had proposed a series of resolutions in the Senate on January 8, 1794,6 calling for a full statement of Treasury operations from the commencement of the Federal Government. The Senate passed these resolutions on January 20, 1794,7 but Gallatin’s right to a seat in the Senate was contested, and on February 28, 1794, he was deprived of his seat.8 In large part because of the absence of their author, these resolutions were never implemented.
On February 24, 1794, in the House of Representatives Giles called up the resolutions which he had proposed the previous December. These resolutions read as follows:
“Resolved, that a committee be appointed to examine into the state of the Treasury Department, and that they be instructed to report to the House, generally, thereon; and, among other things, more particularly:
“1st Whether the forms of keeping the accounts be calculated to effectuate the dispositions of the public moneys, as prescribed by law.
“2d Whether the cash receipts, from domestic resources, have exceeded, equalled, or fallen short, of the domestic cash expenditures, from the establishment of the Government, to the first day of January, one thousand seven hundred and ninety-four; remarking the dates and amount of any excess, or deficiency, quarterly.
“3d Whether the sinking fund, at the time of its establishment, consisted of cash or bonds; specifying, in the latter case, as nearly as may be, the several dates at which any sum or sums of such bonds became payable.
“4th What proceedings have been had under the laws of the fourth and twelfth of August one thousand seven hundred and ninety,9 authorizing loans of money, and what authorities were given for those proceedings; That they also state, in dollars and cents, the gross principal of debt in Holland, produced to the United States by the said loans, and the precise amount of the principal of the foreign debt, which has been discharged thereby; what portion of such loans has been drawn to the United States, at what dates and by what authority; in what manner such drafts have been applied; under what forms and checks these drafts were made; and whether the moneys raised thereby were immediately deposited in the Treasury; if not, in what places, and to what amount, were such moneys deposited; how much time elapsed after such loans, before the said moneys came into the Treasury; whether a compleat fulfilment of our engagements to France was, in any degree, obviated by such drafts; whether any portion of the French debt remained unpaid, at the end of one thousand seven hundred and ninety-two; and whether any balance of the said debt is yet unpaid; And that the committee do also report the date of the first information to this House, communicating the said drafts; and whether any call of the House was made upon the Treasury Department, which embraced the ideas of a previous disclosure thereof.
“5th That the committee be also instructed to report the whole amount of the existing debt of the United States, discriminating the domestic from the foreign debt, and specifying the amount of domestic debt bearing a present interest of six per centum; the amount bearing a present interest of three per centum, and the amount deferred: That they also report the increase or decrease of the whole debt of the United States, and the operation of the sinking fund to the end of the year one thousand seven hundred and ninety-three.”10
The House passed Giles’s resolutions on February 24, 1794, and on the same day a committee was appointed which consisted of Abraham Baldwin of Georgia as chairman, John Hunter of South Carolina, Joseph McDowell of North Carolina, William B. Giles, Christopher Greenup of Kentucky, George Dent of Maryland, Henry Latimer of Delaware, William Irvine of Pennsylvania, John Beatty of New Jersey, Philip Van Cortlandt of New York, Nathaniel Niles of Vermont, Zephaniah Swift of Connecticut, Francis Malbone of Rhode Island, Peleg Coffin of Massachusetts, and Paine Wingate of New Hampshire.11
On February 27 the House resolved that “the committee appointed to inquire into the state of the Treasury Department, have power to send for persons, papers, and records.”12 At a committee hearing on March 1, 1794, which Hamilton attended, the committee agreed to “meet every Tuesday and Thursday at 7 O’clock in the evening, and every Saturday at 10 o’clock in the morning, until the object of their appointment be accomplished.” The committee also agreed that its members would “proceed on the execution of the business as follows: 1st. They will enquire into the mode of transacting the business at the Treasury, as to the collection, keeping and disbursement of the public monies, as to the duties of the respective Officers, and as to the forms of Accounts. 2nd. That they will examine each distinct head of enquiry, in succession, in the order specified in the resolutions. 3d. That the Secretary of the Treasury be requested to exhibit to the Committee at their next meeting a view of the subject contained in the first Resolution.” The committee adopted a final resolution requesting the Secretary of the Treasury “to procure a room, as convenient, as possible, to the Treasury Office, in which, the Committee shall hold their meetings.”13
The committee continued to meet until its report was completed on May 22, 1794.14 Hamilton frequently met with the committee and supplied its members with information on his conduct of the Treasury Department. The following extracts from the committee’s minute book indicate its progress from March 1 until completion of its report and Hamilton’s participation in its work:
|March 4.||“The Secretary of the Treasury, Comptroller and Register, attended to give information, as to the mode of transacting business at the Treasury &c.…”|
|March 13.||“Deposits at and other proceedings with the Banks explained.”|
|March 18.||“2 Statements of receipts & expenditures exhibited by the Secretary of the Treasury.”|
|March 25.||“Query of the Secry. as to authorities stated, for answer of Comee.”|
|March 29.||“Resolved, that the Secretary of the Treasury be requested to state to the Committee, by what authority, any portion of the monies borrowed abroad, have been drawn to the United States. Ordered to be transmd. to the Secy.|
|“Sub-Committee of 3 (Mr. Baldwin, Mr. Giles and Mr. Swift) balloted for to commence the Report on the first part of the Reson.”|
|April 1.||“Further Statements exhibited by the Secy of the Treasy, as to authorities.”|
|April 5.||“Resolved, that it would be satisfactory to the Committee, that the paper submitted to them, April 1st. 1794 by the Secretary of the Treasury, respecting the point of authority, under which, monies borrowed abroad, have been drawn to the United States, should be presented to the President of the United States; and that the Secretary should obtain from him, such declaration concerning the same, as the President may think proper to make.”|
|April 10.||“Secretary of the Treasury attended, and produced the answer of the Presidt. to the resolution of the Commee. on Saturday last, respecting authorities for drawing monies borrowed abroad to the United States.”|
|April 12.||“Report of Sub-Committee on the forms of keeping public accounts at the Treasury read.|
|“Sub-Committee to report to the Committee at the next meeting, the practicability of obtaining from the Treasury department, a statement of balances outstanding on the books of the Treasury, & the steps which have been taken to recover the same.”|
|April 19.||“Sub-Committee presented some additional parts of the report which were adopted by the Committee.”|
|April 24.||“Sub Committee presented further parts of the report which were adopted.”|
|April 29.||“Sundry letters from the U. S. Bankers at Amsterdam to the Secy of the Treasury, laid before the Comee. by the Secy. & copies of them left.”|
|May 1.||“Further part of the Report adopted by the Committee.”|
|May 3||“Statement of the debt of the United States, from the 1st. Janry. 1791, to the 31st. decr. 1793, for which, certificates have been issued, exhibd. by Comptr.|
|“Letter from the Secry. of the Treasy. accompanying statement of informal advances.”|
|May 9.||“Secry. of Treasy. & Comptr. attended & suggested some alterations in the report, some of which were agreed to.”|
|May 12.||“Bank Officers Affidavidavits refd. to Sub. Comee.”|
|May 15.||“Statement in regard to the increase or decrease of the whole debt of the United States—refd. to Sub committee.”|
|May 20.||“Report of the Sub Committee respecting ‘increase or decrease of the public debt,’ read and agreed to be adopted. “Paragraph relating to affidavits of the Bank Officers agreed to.”|
|May 22.||“Report compleated, and Committee adjourned sine die.”15|
The report of the committee was submitted to the House of Representatives on May 22, 1794, and was “read, and ordered to lie on the table.”16 The report is for the most part a clerk’s copy of various reports and papers that Hamilton and Oliver Wolcott, Jr., comptroller of the Treasury, submitted to the committee and to the House of Representatives. Although the differences between the committee report and the Treasury Department papers from which it was taken are few, some of them are indicative of the wide gulf between Hamilton’s views and those of his critics.
From Hamilton’s report of March 4, 1794,17 the committee deleted a sentence in which Hamilton stated what to him had been a necessary principle of the Treasury Department—that “all monies in the Treasury form a common mass.” During the 1793 debates over Hamilton’s conduct of the Treasury Department it had sometimes appeared that some of Hamilton’s critics believed that moneys received from a specific source and appropriated to a specific purpose should be held apart from other funds in the Treasury until they were expended. In addition, the committee omitted from Hamilton’s discussion of “informal advances” from the banks18 his statement that “These advances have been made in the confidence, that the Secretary of the Treasury would not request them, but in cases, in which there was a moral certainty of a future provision, and in which, justice and good faith would necessarily oblige the Legislature to make it.” Hamilton’s reports in 1793 had been censured for this kind of interpretive statement. Although Hamilton emphasized to the committee the rapidity and safety of Government operations when conducted through a bank, the committee report, by twice pointing out that Government deposits were “auxiliary to the general operations of the Bank, in the same sense with all other deposits,” underscored the anti-bank contention that public funds were being used for private gain.