Remission of Forfeitures. REMISSION OF FORFEITURE. [Communicated to the House, April 28, 1802.] The Secretary of the Treasury, to whom was referred the petition of Ferdinand Mullenheim, by his agent, Anthony Lamarlere, respectfully reports: That the petitioner, a native subject of Denmark, and resident at St. Thomas, was the owner of the schooner Nymph, and of the greater part of a cargo, consisting of 48,676 lbs. (French weight) of coffee, 18,817 lbs. of brown sugar, and 317 pieces of logwood, which was laden at Port de Paix, on 13th day of April, 1799, by the said A. Lamarlere. That William Smith, the commander of the said vessel, which was bound from Port de Paix to St. Thomas, ran away with the said vessel, and, having entered the Chesapeake, did land and sell, at Norfolk, a part of the cargo, consisting of the whole of the sugar, and 6,682 lbs. of coffee, on which the duties were paid, and afterwards attempted, with the assistance of David Porter and others, to smuggle the remainder of the cargo. That, having been detected therein, the vessel and part of the cargo were seized, libelled, condemned, and sold for seven thousand seven hundred and seventy dollars and ninety-five cents; from which, deducting six hundred and eighty-two dollars and seven cents costs, left a sum of seven thousand and eighty-eight dollars and eighty-eight cents for the net proceeds of the sale. That a certain Lascamela having laid claim to a part of the said cargo, a sum of two thousand two hundred and seventy-five dollars and three cents, part of the net proceeds above-mentioned, were, by order of the court. retained by Jacob Graybill, then Marshal of the District of Maryland, until a decision had taken place on the said claim; and that, by subsequent decree of the court, the said claim was set aside. Under those circumstances, the petitioner applied, under the provisions, and in the manner directed by law, for a remission of the said forfeitures; whereupon, the Secretary of the Treasury being of opinion that the said forfeitures were incurred in consequence of the barratry and fraud of William Smith, master of the schooner Nymph, and sundry mariners, and without intention of fraud or wilful negligence on the part of the owners of the said schooner and her cargo, did, on the 27th day of December, 1800, decide, that, deducting the duties on the merchandise shipped at Port de Paix for the Island of St. Thomas, (which merchandise was presumed to have been brought to the United States) and all costs, the proceeds of the sales of the vessel and cargo, which had been forfeited, and which have or may be recovered, be restored to the respective owners." The duties on coffee shipped at Port de Paix amount to two thousand nine hundred and ninetyeight dollars and forty-four cents, of which sum three hundred and sixty-seven dollars and fiftyone cents were paid on account of the parcel landed at Norfolk, leaving a sum of two thousand six hundred and thirty dollars and ninety-three cents for the amount of duties, which, in pursuance of the Secretary's decision, being deducted from the sum of seven thousand and eighty-eight dollars and eighty-eight cents, net proceeds of the vessel and cargo, leaves, for the whole amount which might have been claimed by the petitioner, a sum of four thousand four hundred and fifty-seven dollars and ninety-five cents. He has already received three thousand four hundred and nineteen dollars and seventy-five cents, and there has been paid into the Treasury, on account of the duties, five hundred and thirty-four dollars and seventyseven cents. The balance due to the petitioner is - $1,038 20 That due to the United States for duties 3,096 16 Which sum has not yet been recovered, the late Marshal of Maryland, who had no sureties, having died insolvent, without having paid the sum of two thousand two hundred and seventy-five dollars and three cents, left in his hands; and the balance of eight hundred and fifty-nine dollars and thirty-three cents, being still in the possession of the informer, to whom it had been paid, as his legal share, before the Secretary had remitted the forfeiture. From that statement of facts, it is evident that the petitioner has no just claim, unless the Secretary's decision should be supposed not to have been sufficiently favorable. In the opinion of the present Secretary, that decision is grounded on just principles. However unfortunate the barratry and subsequent conduct of his captain may have proven to the owner of the vessel, he, and not the United States, must bear the loss resulting from that misconduct. The duties on the whole cargo, consumed within the United States, are justly due to them, whether the merchandise was smuggled or entered according to law; and nothing more can be required from them, than a restoration of what may be recovered, after deducting the amount of those duties. It also appears, that the manner in which the former Secretary's decision has been carried into effect, is more liberal than the petitioner had, strictly, a right to expect, as the duties ought, perhaps, to have been deducted from the specie on hand, leaving him the chance of recovering what he could from Mr. Graybill's estate and from the informer. Against this last, a suit has been instituted, and the amount, if recovered, will be paid to the petitioner. But the eventual loss of the sum which was left in the hands of the late marshal, although it arises from the act of one of the owners, will fall, almost exclusively, on the United States. From a view of all the circumstances of the case, the petitioner does not seem to be entitled to any legislative relief. All which is most respectfully submitted. ALBERT GALLATIN. TREASURY DEPARTMENT, April 26, 1802. Application of Public Money. APPLICATION OF PUBLIC MONEY. [Communicated to the House, April 29, 1802.] Mr. NICHOLSON made the following report: The committee appointed "to inquire and report whether moneys drawn from the Treasury have been faithfully applied to the objects for which they were appropriated, and whether the same have been regularly accounted for; and to report, likewise, whether any further arrangements are necessary to promote economy, enforce adherence to legislative restrictions, and secure the accountability of persons entrusted with public money;" submit the following report: In order to ascertain, generally, in what manner and under what checks, moneys were drawn from the Treasury of the United States, and were afterwards expended and accounted for, the committee applied to the Secretary of the Treasury, stating the several objects to which they intended to direct their inquiry; his answers, under date of the second of March and the ninth of April, are annexed to this report; to which, as well as to the statements of the Accountants of the War and Navy Departments, on the same subject, they beg leave to refer. sequent warrants and appropriations, and the committee do not discover that it has been productive of an injurious consequence to the United States. The Secretary of the Treasury, in his communication of the second of March, having expressed a doubt whether the moneys advanced on account of the removal of the seat of Government from Philadelphia to Washington, had been authorized by any previous law, the committee directed their attention to the object, and now offer the result. The law establishing the permanent and temporary seat of Government (passed on the 16th of June, in the year 1790) provided, "that all offices attached to the seat of Government, should be removed to this District on the first day of December, in the year one thousand eight hundred, by their respective holders," and declared that the necessary expenses of such removal should be defrayed out of the duties on imports and tonnage. This appropriation is indefinite in its nature, and, perhaps, some contrariety of opinion may exist, as to the extent of the expense it was intended to cover; but the committee conceive that a strict adherence to the letter of the law would confine the appropriation to the expenses actually incurred in removing the books, papers, records, and furniture, of the respective officss. From the document The committee deemed it sufficient to state, marked G, hereto annexed, it appears that the sum here, that all public moneys are drawn from the of fifteen thousand two hundred and ninety-three Treasury in virtue of warrants signed by the Sec- dollars and twenty-three cents were paid for the retary of the Treasury, and countersigned by the transportation of the books, papers, records, and Comptroller, and are paid to the officers or agents, furniture of the several offices, and the furniture to whom the same are due, or who are entrusted of the President; and the sum of thirty-two thouwith their application; or, when relating to the sand eight hundred and seventy-two dollars and War or Navy Departments, they are placed in the thirty-four cents for expenses incurred by the offi hands of the Treasurer, as agent for those Depart-cers and clerks for the removal of themselves and ments, who disburses them on warrants drawn by the Secretary of the Department, and countersigned by the respective accountants. For the general construction heretofore given by the Treasury Department to the various ap propriation laws, the committee refer to the communication made to them by the Secretary of the Treasury, on the second of March, and more particularly, for the construction given to the annual appropriations for the support of the Navy and Army, respectively, they refer to a report made by the late Secretary of the Treasury, on the day of May, one thousand seven hundred and ninety-six, to the Committee of Ways and Means. From both of these, it appears that the appropriations for the Army and Navy, respectively, have been considered as constituting but one general fund for each of these objects, although, in most of the laws making appropriations, a variety of heads of expenditure were distinctly specified. If the general construction be correct, it may, perhaps, be said that, in most instances, moneys have been drawn from the Treasury in the manner prescribed by law. Some irregularities are stated to have occurred, where moneys have been advanced upon the simple application of the Secretary of the Treasury, by letter, without the formality of a warrant, and, sometimes, even without a previous appropriation; but, in these cases, the irregularity has been afterwards covered by sub families. In general, the vouchers produced in support of these last mentioned expenses, are the stated accounts, and the declarations of the officers and clerks, to whom the same were allowed. Transcripts of the accounts of the officers only, are annexed, those of the clerks being too numerous to be detailed. From these accounts (which are marked G 1 to G 12, inclusive) it will be seen that the charges consist of travelling expenses, losses on the sale of articles thought too inconvenient to remove, packing, breakage, and transportation of furniture, house rent in Philadelphia, and extra expenses after their arrival at the city of Washington. As all the officers and clerks were, at the time, in the service and pay of the Government, and received the full amount of their salaries, exclusive of these extraordinary allowances, and as the act of June, 1790, provided only for defraying the expenses incident to the removal of the offices, the committee are of opinion that this sum of $32,872 34 was drawn from the Treasury and expended without any legal authority. The manner in which moneys drawn from the Treasury, under previous appropriations, have been afterwards applied, presents a subject of inquiry of more difficulty and importance. The expenses in relation to the civil list, being chiefly for salaries, are not otherwise liable to abuse, than in cases where moneys advanced to agents have not been applied to the objects for which the Application of Public Money. The moneys which have been advanced to the several Secretaries of State, have been remitted by them principally to Ministers, Consuls, and other agents abroad, whose accounts are not yet rendered, (although many of them are of an old date,) and the committee cannot say how, or in what manner, the money has been expended. The advances necessary for defraying the expenses of the Military and Naval Establishments. were formerly made, in part, to individuals who have accounted directly with that department; but since the law of the 16th July, 1798, the whole of the moneys have been paid to the Treasurer, as agent for these two departments, and have been subject to the drafts of the respective Secretaries. The letter of the Secretary of the Treasury, under date of the 9th of April,, accompanied by sundry abstracts, (marked from A 1 to A 9, inclusive) together with the statements of the two accountants (E, E 1, E 2, E 3, and F, respectively) herewith reported, exhibit the amount advanced, settled, and remaining unaccounted for, in each department. From these it appears, that, from the 1st day of January, 1797, to the end of the year 1801, the advances made by the Treasury on account of the War Department, have amounted (exclusively of a sum in the hands of the Treasurer) to $9,846,of which, there have been paid to individuals who have accounted with, or are accountable to the Treasury, a sum of - $1,390,238 21 advance was made, and have, not been, afterwards, Although the committee will not say that there are no cases in which a public officer would be justified in applying moneys appropriated to one object, to expenditures on another, yet they are of opinion that, in every deviation, the necessity for the application ought to be for some obvious benefit to the United States, and, in every such case. a disclosure thereof to Congress ought to be made, at the next session which should immediately thereafter ensue. And there have been paid, by virtue of the warrants of the Secretary Making an aggregate equal to Making, in the whole, a sum char geable to the War Department, 8,456,725 07 9,846,963 29 1,756,391 36 10,213,116 43 Of which, the accountant has settled and rendered to the Treasury, accounts to the amount of $6,335,923 93; leaving a balance of $3,877,192 50 unaccounted for, or not yet settled. The moneys advanced to the Navy Department, from its establishment in 1798, to the 1st March, 1801, exclusively of the sum paid by the Treasury to individuals, amount to 9,982,313 72 Of which sum, accounts have been settled by the accountant, and rendered to the Treasury, to the amount of Leaving an unsettled balance of 5,810,691 98 4,170,951 75 These sums differ in amount, nominally, from those contained in the statement annexed to the letter of the Secretary of the Treasury, of the 2d Application of Public Money. March, but the difference is explained, and the ceive that no authority was given, by law, not actual amount proved to be the same in the letter and statements of the 9th of April. The statements of the accountants, although they exhibit balances apparently unaccounted for, to a large amount, will, likewise, show that accounts have been rendered for a considerable portion, which are in a train of settlement but not finally closed. The late hour at which the voluminous documents accompanying this report were received by the committee, (upon the 9th of April) and the labor necessary to investigate such a mass of accounts, and of advances unaccounted for, particularly in the War and Navy Departments, embracing an expenditure of twenty million of dollars, have rendered it impossible for the committee, consistently with their attention to their other duties, to form an opinion as to the manner in which this sum has been expended. But, from the partial view which they have taken, they beg leave to present some facts and principles, which they believe to be worthy of the notice of Congress. any appropriation made, except for the two docks above-mentioned, as the sum of one million dollars was appropriated by the act of 1799, for building or purchasing the ships only, and the sum of two hundred thousand dollars for the purchase of timber. As public ships of war had been before built under a similar authority, for the use of the United States, at private yards, and as Congress did, at the same time that they authorized the building or purchasing the ships, provide for the erection of two docks only, the committee are of opinion that four of the navy yards were purchased without authority, and the money misapplied which was paid for them. In the War Department, there likewise appears to have been a transaction equally unauthorized, In the year, a pile of buildings was com menced, under the directions of the then Secretary of War, on the banks of the Schuylkill, near the city of Philadelphia, which have since been carried on in a maner highly expensive. These buildings have been called a Laboratory, and, although yet in an unfinished state, have already There are two previous requisites which are cost the United States $152,608 5,which sum has necessary to justify the expenditure of public mo- been paid out of the appropriations heretofore ney, and, without which, no legal expenditure can made for the quartermaster's department. The be made: First, that the expenditure for the ob-committee are of an opinion that this expenditure ject to which it is applied, should be authorized by law; and, secondly, that an appropriation should have been made to cover that authorized expense. In the War and Navy Dapartments, this rule does not appear to have been strictly adhered to in all cases; but, for the reasons above assigned, the committee have been unable to ascertain how far it has been departed from. The most prominent instances which have yet presented themselves, are, herewith, stated. By an act passed on the 25th day of February, in the year 1799, an authority was given to the President of the United States to cause to be built six ships of war, to be armed with, and carry not less than seventy-four guns each, and to build or purchase six sloops of war, to be armed with eighteen guns each. In part of the necessary expenditures for these objects, a sum not exceed ing one million of dollars was appropriated by the same law. And by another act, passed on the same day, it was declared that two docks should be erected, in suitable places, under the direction of the President of the United States, for the convenience of repairing the public ships, and the sum of fifty thousand dollars was appropriated for that purpose; and by another act, passed on the same day, the sum of two hundred thousand dollars was appropriated to be laid out in the purchase of growing or other timber, or of land on which timber is growing, suitable for the Navy, and to cause the proper measures to be taken to have the same preserved for the future uses of the Navy. Under this authority. only, the then Secretary of the Navy expended the sum of $135,846 92 in the purchase of six navy yards, at Portsmouth, Charlestown, (Mass.) New York, Philadelphia, Gosport, (Virginia,) and the City of Washing ton. For this expenditure, the committee con of money could not be justified at any time, but more particularly at a moment when the United States were borrowing money, at a high rate of interest, to meet objects which the Legislature considered as necessary, and had sanctioned by law. The committee beg leave, likewise, to refer to an important principle formerly settled by the Executive, and actually practised upon in the War Department, in relation to the expenditure of public money, which they deem improper, in a Gor ernment like ours, where taxes cannot be imposed but by public consent, and where moneys arising from taxes, cannot be disbursed but upon the authority of a law previously passed by the Repre sentatives of the nation. By an act, passed on the 9th of February, in the year 1793, the Presi dent is directed to cause the moneys drawn from the Treasury, for the purpose of intercourse with foreign nations, to be settled, by ca using the same to be accounted for, specifically, in all cases where in the expenditure thereof may, in his judgment, be made public; and by making a certificate of certificates, or causing the Secretary of State to make a certificate or certificates of the amount of such expenditures, as he may think it advisable not to specify; and such certificates are to be taken as sufficient vouchers for the sums expressed to have been expended. The policy of this law. the committee do not intend to question, but it is clear that it extends only to cases of compensation. for what are usually termed "secret services" that may be rendered to the United States in their intercourse with foreign nations. The section abore recited has been engrafted into two laws, passed in the respective years of 1798 and 1800, but in every law on this subject, it has been expressly confined to foreign intercourse, and in the act of 1800, is farther limited to the contingent expenses Application of Public Money. only of foreign intercourse. It has not, therefore, I part of the Constitution which provides that "no been without considerable surprise that the committee have seen the same principle applied to the expenditures of the War Department. In the instructions given by the Secretary of War to the Accountant of the War Department, in his letter of the 28th of December, 1797, herewith reported and marked L, a rule is positively laid down, that expenditures for secret services, rendered in relation to the duties of the War Department, are to be admitted. And on the 20th day of December, in the year 1799, the Secretary of the Treasury made a report on this subject to the President of the United States, (subjoined and marked M) in which the principle is again recognised as applicable to the Department of State, War, and Navy. On the subsequent day the President accordingly signed two certificates as vouchers for moneys said to have been expended in relation to the duties of the War Dapartment, which certificates are annexed to this report, and are marked N and O. The committee entertain no doubt as to the illegality of this measure, as it is authorized by no law whatsoever, and they had flattered themselves that the Federal Government required no services of any nature which ought to be concealed from the officers of the Treasury, or from the Legislature. They consider these facts as coming properly under the head of expenditures not authorized by law. Two other cases of exceptionable expenditure in the War Department have been sufficiently examined to warrant a report upon them. The first relates to an appointment conferred by the late President on Uriah Tracy, Esq., in the Summer of the year 1800, while he was a member of the Senate of the United States: the second relates to a payment made, from the contingent fund of the War Department, to Mrs. Ariana French, of Georgetown, in the month of July, 1800. Neither of these are very extensive in amount, but both deemed important for the precedents they may hereafter furnish. It appears from a document herewith exhibited, and marked P, that Mr. Tracy was appointed "to visit and examine into the actual state of the garrisons, Indian trading-houses, factories, &c. in the Northwestern Territory, on the Mississippi, and on the frontiers of Tennessee and Georgia," and that Mr. Tracy received for this service the sum of one thousand nine hundred and eighty-five dollars and five cents; seven hundred and fifty-three dollars and five cents being for travelling and other incidental expenses, and twelve hundred and thirtytwo dollars for his compensation, from the sixteenth of June to the sixteenth of November, in the year one thousand eight hundred, at eight dollars per day. From the account exhibited by Mr. Tracy for his expenses, it will be seen that, during these five mooths he visited Pittsburg, Presqu' Isle, Niagara, Detroit, and Michillimackinack, but did not fulfil the other objects of his mission. The committee cannot forbear to remark, that Mr. Tracy's acceptance of this appointment has the appearance, at least, of inconsistency with that person holding an office under the United States shall be a member of either House of Congress." Mr. Tracy was, at the time of receiving the appointment, during the whole of its continuance, and has ever since been, a member of the Senate of the United States; and, from an inspection of the pay roll of the Senate, the committee find that, for the last seventeen days of the five months of his service, under the above appointment, he not only had his expenses borne by the public to a considerable amount, and received likewise eight dollars per day, but that he had at the same time received, as a member of the Senate, six dollars per day for travelling from Litchfield, in Connecticut, to the seat of Government-a distance of three hundred and forty-four miles-twenty miles being allowed for travelling one day. James McHenry, Esq., former Secretary of War, resigned that office, it is believed, in the month of May, 1800, and the document marked R, hereto annexed, shows that, in the month of April preceding, Mrs. Ariana French leased a house to him for one year, to commence from the first of June following; that an award was made between the parties, by which it was declared that Mr. McHenry should pay to Mrs. French $208 95, for damages sustained by her by reason of his not occupying her house agreeably to the contract; and that, in conformity to the opinions of the Secretary of the Treasury and the Secretary of the Navy, and by the direction of the Secretary of War, this sum was paid to Mrs. French, out of the fund for defraying the contingent expenses of the War Department. Upon the whole the Committee are of opinion. that considerable sums of public money have been greatly misapplied, and that much expense has been incurred without any legal authority; but, for the reasons before assigned, it has been impossible for them to make a complete investigation. Nor do they believe that an investigation entirely satisfactory can be made, unless the House should think proper to appoint a committee for this purpose, to sit during the recess, with directions to make a report to the next session of Congress. The committee deem it their duty to observe, that appropriations for the contingencies of the War and Navy Departments are, at all times, liable to abuses, not only from the very large sums usually appropriated therefor, but, also, from the impracticability of specifying by law the precise objects to which such sums are applicable; and the committee are of opinion, that giving publicity to the accounts of the expenditures of money appropriated for contingencies, would have the most direct tendency to correct the latitude of construction formerly exercised in that respect, by the heads of those Departments, to promote economy in, and attach a proper degree of confidence to, the future proceedings in those Departments. And the committee can discern no possible inconvenience in a disclosure of that nature, since they believe that there is no necessity nor propriety for applying the principle of secret service money to either of those Deparments: and at |
