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Application of Public Money.

least, it ought to be so considered, until it should be by the agents or departments to whom the same otherwise determined by law.

may have been advanced ? The committee are, therefore, of opinion, that 4. What construction has been given to the apa clause to this effect ought to be inserted in the propriation laws by the Treasury Department, and bill already reported by them, respecting the ac- by ihe several agents or departments to whom countability of public officers.

moneys have been advanced ? For other arrangements which appear to be 5. Have moneys always been paid by the Treanecessary, “ to promote economy, enforce adher- sury, and applied by the agents or departments ence to legislative restrictions, and secure the in conformity to the laws authorizing expenses accountability of persons entrusted with public and making appropriations for the same ? money,” they refer to the bill reported by them 6. To whom, and in what manner, are the reduring the present session, to provide for the due ceivers of public moneys accountable ? application of public money, and to secure the 7. In what situation are the accounts of persons accountability of persons entrusted therewith, and at this time, who have received moneys from the also to the communication of the Secretary of the Treasury, and where any of those accounts reTreasury, made to them on the 2d of March. All main unsettled, what are the causes ? which is respectfully submitted.

6. What is, particularly, the situation of ac

counts for moneys advanced to the Secretary of JANUARY 21, 1802.

State, or to the War and Navy Departments ? Sir: I this morning submitted to the commit- 9. Are the checks, under which public moneys tee, appointed to investigate the state of the Trea- are expended, sufficient to enforce a due applicasury Department, &c., a proposition that the com- tion to the objects for which they are advanced ? mittee should direct their inquiries to the several

10. Can any mode be devised' by which more particular objects contained in the annexed state- efficient checks, in relation to the public expendiment. This proposition was agreed to, and I ture, may be adopted, and the accountability of have been desired by the committee to enclose it those who receive moneys from the Treasury be to you, for the purpose of obtaining from you such more effectually secured, without embarrassing information as you may be able to furnish, in an- the public service ? swer to these inquiries. It may not, perhaps, be in your power immediately to give the whole in

TREASURY DEPARTMENT, formation required, but it is expected that you

March 2, 1802 will transmit it, from time to time, as it can be Sir: I have the honor to enclose an answer to prepared, keeping in view the necessity of all pos- the queries proposed in your letter of the 21st sible despatch. In the interim, it is the intention January last. The statement of balances due by of the committee to call at the Treasury Office, at individuals had been prepared as they stood on the convenient periods, in order to inspect the books of 30th June last; but, having been enabled to obthe Department, and the accounts of those per- tain them, since, as they stood on the 31st Decemsons who have been entrusted with the expendi- ber last, that statement is delayed for two or three ture of public money. I have the honor to be, days longer, in order to give time to transcribe sir, with high consideration, your obedient servant. several marginal notes.

JOSEPH H. NICHOLSON, I have the honor to be, most respectfully, sir,
Chairman of the Committee.

your obedient servant, ALBERT Gallatin, Secretary of the Treasury.

ALBERT GALLATIN.

Hon. J. NICHOLSON, Chairman, c. Objects of inquiry submitted by the Chairman, and

agreed to by the committee appointed “ to inquire In pursuance of the request of the Committee of Invesand report whether moneys drawn from the Treasury

tigation, contained in the letter of their Chairman, of have been faithfully applied to the objects for which

the 21st day of January last, the Secretary of the they were appropriated, and whether the same have

Treasury respectfully submits to the consideration of been regularly accounted for, and to report, likewise, the Committee the following facts, observations, and whether any further arrangements are necessary to promote economy, enforce adherence to Legislative restrictions, and secure the accountability of persons

By the Constitution it is provided that " no entrusted with public money.

money shall be drawn from the Treasury but in

consequence of appropriations made by law." By OBJECTS OF INQUIRY GENERALLY.

the act to establish the Treasury Department it 1. How are moneys drawn out of the Treasury? is enacted that the Secretary of the Treasury shall 2. How are they expended ?

grant, under certain limitations, all warrants for 3. How are they accounted for ?

moneys, to be issued from the Treasury, in purMORE PARTICULAR OBJECTS OF INQUIRY.

suance of appropriations by law; and that the

Treasurer shall disburse the moneys of the Uor 1. Under what checks, founded either on law ted States, “ upon warrants drawn by the Secreor usage, are moneys paid out of the Treasury ? tary of the Treasury, countersigned by the Comp2. To whom are these moneys paid ?

troller, recorded by the Register, and not other3. Under whose control, and under what checks, wise." are moneys drawn out of the Treasury-expended Although the construction given by the Trea

statements :

T.:

Application of Public Money. sury Department to appropriation laws, may not letter, addressed from the Secretary to the Treahave been universally uniform, yet it seems to surer, which payments have, afterwards, been have been generally understood, that the whole of covered by warrants, instead of being grounded, the moneys, appropriated for the annual support according to law, on those warrants. And, in of the Army and Navy, respectively, were to be some instances, moneys have been thus informally considered as making but one general appropria- paid by the Treasurer, or advanced by the Bank tion for each of those two objects; and that the of the United States, before an appropriation had sums, thus appropriated, were indiscriminately been made, by law, to cover the expense for which applicable to every distinct object of expenditure the money had thus been advanced. In every embraced under those two general heads. such instance, the payment has been authorized

The appropriations for the Indian department, by a subsequent appropriation, and covered by a and those made generally for fortifications, have warrant, grounded on the appropriation. It must, also been mostly blended with those of the War also, be observed, that, in some instances, moneys Department. But it seems, though it is difficult are advanced by the collectors of the revenue, out to reduce the practice, heretofore established, to of the public moneys in their hands, and before any uniform and certain rule, that the appropria- the same have been drawn in the Treasury. The tions, in relation to the purchase of cannon, arms, two principal objects of expenditure, to which ammunition, and military stores, to the purchase this exception to the general rule applies, are the or leasing of foundries and armories, and to the expenses incident to the courts of the United fortifications of certain designated harbors, and, States, other than those for salary, namely, those also, those in relation to the purchase of land for jurors, witnesses, fees, safe-keeping of prisonwith growing timber, or of timber, to the erecting ers, and contingencies, which are advanced by the of two docks, to the purchase or building of twelve collectors of the customs, to the marshals, and vessels, to building and equipping three ships, not those incident to the ordinary support and repairs less than thirty-two guns, to the building of ten of light-houses, buoys, and piers, which are, also, galleys, to the building six sloops of war, and six generally defrayed out of the public moneys, in seventy-four gun ships, to the safe keeping of their hands, by those collectors, or other revenue French prisoners, as well as those respectively officers, under whose superintendence those estabmade during the last session of Congress, for com- lishments are placed. In those instances warrants pleting six seventy-four gun ships and the public issue as if the moneys expended had been prenavy yards, docks, and wharves, and for erecting | viously drawn into the Treasury, and, afterwards, marine barracks, have been considered as distinct paid out of the same, to the revenue officers, in from each other, and from all other made in rela- order to enable them to defray the expense. tion to the Army and Navy, respectively.

All warrants regularly granted by the Secretary The appropriations made in relation to the pub- of the Treasury, on the Treasurer, for the dislic debt, to the civil department, to domestic ex- bursement of public moneys, issue, either in paypenses of a miscellaneous nature, (such as the ment of a balance actually due, or in advance; in mint establishment, light-houses, census, &c.,) the first case, they are drawn in pursuance of a and to foreign expenses, have been generally con- settled account, certified by the Comptroller ; in sidered as constituting, for each distinct object of the last case, they rest on the authorization of that expenditure, embraced under each of those gene- particular department who has the control of the ral heads, á specific distinct appropriation, the object of expenditure to which they refer. amount of which was applicable only to that The payments on account of the compensations specific object for which it was appropriated. of the members of the Senate, and of the contin

If the construction of appropriation laws, adopt- gent expenses of that body, are made, on his reed by the Treasury Department, shall be consid- quisition, to the Secretary of the Senate; those ered as having been correct, it is believed that on account of the compensation of the members moneys may be said to have been drawn from the of the House of Representatives, on his requisition, Treasury in the manner prescribed by law, only to the Speaker of the House; those on account of in consequence of appropriations made by law. the contingent expenses of the House, in the same The only object of expenditure within the know- manner, to the Clerk of the House. ledge of the Secretary, which may, perhaps, be The payments on account of the official conexcepted, is that which relates to the removal of tingent expenses of the several departments are the seat of Government. An examination of the made at the requisition, and are, afterwards, unappropriation books, kept in the offices of the Sec- der the control of the head of each department, retary and Comptroller, will give complete infor- respectively; those on account of the expenses mation on that part of the inquiry. But the Sec- relative to the courts of the United States, other retary here begs leave to state, that, having thought than those for salary, are made on the requisition it his duty not to innovate in the usual practice, of, and to, the marshals. except in cases where the laws appeared to him The payments on account of the Mint are made not to admit of any doubt, his having conformed, to the Treasurer thereof, on the requisition of the in doubtful cases, to the construction heretofore Director; those on account of invalid pensions, adopted, is not to be considered as expressing an to the several Commissioners of Loans, or other opinion in favor of the correctness of such con- agents, on the requisition of the Secretary of War. structions; but a custom had, till lately, prevailed, The greater part of all other payments, in relato pay moneys out of the Treasury, on a simple tion to the civil list, and to miscellaneous domestic Application of Public Money. expenses of a civil nature, as they are made only der the exclusive control of the Commissioners of after the amount has become due, and the account the Sinking Fund. has been settled, never can be liable to abuse. All No abuse is supposed to have taken place, in re other payments whatever are generally made in lation to the expenditure of the advances made. advance, and in the following manner:

for the purpose of paying either the interest or 1. Those on account of the interest on the principal of any part of the public debt. All the whole of the public debt, of the annual reimburse agents are immediately accountable, and genement of the principal of the six per cent. and de- rally, account regularly, to the Treasury. The ferred stocks, and of the instalments of the Dutch whole amount of balances, due on that account, debt, are made by the Secretary of the Treasury, to the United States, for moneys not accounted as follow, viz: Those on account of the interest for, is only three thousand three hundred and and principal of the Dutch debt, to the Commis- ninety-three dollars and forty-nine cents. sioners of the United States, at Amsterdam ; those

2. The advances for the War and Navy Deon account of the interest and reimbursement of partments are uniformly made on the requisition the domestic debt, standing on the books of the of the Secretaries of War and of the Navy, reTreasury, to the Bank of the United States; those spectively, to the Treasurer of the United States, on account of the interest and reimbursement who becomes thereby Treasurer of each depariof the same debt, standing on the books of the ment, and disburses the moneys, thus placed in several Commissioners of Loans, to the said Com- his hands, according to law, on warrants sigoed missioners, respectively.

by the Secretary, and countersigned by the acThe advances to the Commissioners in Holland countant of each department, respectively. The are made, from time to time, by remittances, pur-charged, in fact, to the proper department, in ae;

moneys thus advanced by the Treasury, are chased, heretofore, by the several cashiers of the Bank of the United States; and the Commis- counts, opened in the names of the accountants of sioners render their accounts, annually, to the the Treasurer, by virtue of warrants of either of

the same. Individuals who receive moneys from Treasury. Those to the bank and Commissioners those two departments

, are accountable to the of Loans are made quarterly, and to the amount accountants, who settle provisionally those suborascertained to be due to the creditors, on the re- dinate accounts, and account themselves, quarterspective books of the Treasury, and Commission- ly, to the Treasury. The credits they claim, eners. The Commissioners of Loans render their brace, therefore, all those to which individuals, accounts to the Treasury, quarterly; and as the accountable to them, were entitled, and the whole dividends, which remain unclaimed for nine is ultimately adjusted and settled by the Auditor months, are payable only at this Treasury, such and Comptroller, in the same manner as all other unclaimed amount is quarterly deducted from the

accounts. advances which, otherwise, should be made to the Commissioners, and is paid to the bank. From the intercourse with foreign nations, including

3. The advances for all expenses incident to this arrangement it" results, that the accounts of the diplomatic establishment, the moneys exthe Commissioners of Loans uniformly exhibit a considerable apparent balance charged to them; applied to the relief of seamen abroad, those ad

pended in relation to the Barbary Powers, those and which consists, partly, of the dividends paid vanced in the prosecution of claims, for property by then during the six preceding months, and not captured by the belligerent Powers, the salaries yet accounted for, and partly of the sums neces- of agents, and other officers abroad and at home, sary to pay the outstanding dividends. The accounts with the Bank of the United States, for of treaties with foreign nations, as well as all other

appointed under, or in relation to, certain articles advances and payments of interest and reimbursement of the domestic debt, not having been set: treaties, are made on the requisition of the Seere

expenses, incidental to the execution of those tled since the year 1797, they exhibit an apparent tary of State, who has that class of expenditures balance against the bank of more than six mil- under his control. The moneys thus advanced lions of dollars, the whole of which, however, has are paid partly to the Purveyor of Supplies, and been paid by them, with the exception of the accumulated unclaimed dividends, the amount of Treasury; but they have, till lately, been made

to some other agents, who are accountable to ibe which is not ascertained.

principally to the Secretary of State himseli, who It is here proper to add, in relation to the other disbursed the same, and became personally acpayments on account of the public debt, that those countable for the amount. The individuals, to for interest on the temporary loans obtained from the whom he advanced the money, used to render bank, are made as the same become due, quarterly their accounts to him; and his account, in some or semi-annually, in pursuance of accounts settled instances, embraced those subordinate accounts, and certified by the Comptroller; those for the but generally exhibited only the disbursements principal of the same loans, occasionally, and at made by him to those individuals, who were there ihe discretion of the Secretary of the Treasury, upon charged with the proper amount, and be as the situation of the Treasury may permit; and came accountable to the Treasury. But, by a that those for purchase of the public debt, or in arrangement made in the month of June last, the payment of any part of the same, which may be Secretary of State no longer receives any mones; payable at the will of the United States, but is the sums required for that part of the public sernot actually demandable by the creditors, are un-vice are paid immediately by the Treasury, to the

Application of Public Money. agents or other individuals, to whom they were under each distinct head of expenditure. It is, formerly advanced by him; and these are at once however, evident, from the account itself, and from charged and made accountable to the Treasury a sketch stated by Mr. Kimbal, late clerk in his deThose agents are, principally, the Purveyor of partment, that, although he drew the moneys from Public Supplies, at Philadelphia, and bankers in the Treasury, under distinct appropriations, he did England and Holland.

not sufficiently attend to these, in the application From this statement, it is evident that the of the money, but has, in many instances, applied branches of the public expenditure, which have the sums drawn under one head, to another head been most liable to abuse, are those under the con- of expenditure, and has, therefore, in some cases, trol of the three last mentioned departments—the spent less, and in others more, than was authordiscretion of the head of the department having been ized by law. The statement C shows the excess, the only check, in relatior both to the legality of which it appears has thus been expended, so far as the expense, and to the amount expended under the same can be ascertained. The greater part of each appropriation, and the accountability of the the sums, thus expended for certain objects, beyond Receivers of Public Moneys being 100 remote the sums he had drawn from the Treasury, for those, from the Comptroller, who, by law, can alone ul- is covered by appropriations, made principally timately settle and decide upon all accounts what after the expenditure had taken place; and in orever. It has not been the duty of the Secretary, der to enable the Comptroller to pass the whole nor would the attention due to the business im- of the accounts, some further appropriations are mediately entrusted to his care, have permitted still necessary. In relation to accounts of every him to investigate the accounts, relative to past description, the statement D is annexed, which extransactions, in either of the War or Navy De-hibits the balances which appeared due on the 31st partments. 'It is, however, believed that the most day of December last, on the Treasury books, by easy mode of investigation will be, by a recur- all the receivers of public moneys, arranged under rence to the books and accounts of the account distinct classes, and accompanied with notes, in orants themselves; and, in order to facilitate the in- der to distinguish those cases where the balance quiries of the committee, an account, marked A, is merely nominal, from where it is either asceris annexed, which exhibits the sums advanced to tained, or expected to be actually due. each of those two departments, from the first day The most apparent defects in the present arrangeof January, 1797, to the thirty-first day of Decem- ment, seem to be, in relation to the drawing pubber, 1801, under each head of appropriation, for lic moneys from the Treasury, a want of specificawhich a distinct account has been opened in the tion in the several appropriations, defined by law books of the Secretary and Comptroller of the with such precision, as not to leave it in the powTreasury, and by virtue of which, the warrants er of the Secretary of the Treasury to affix an arbigranted by them, for the moneys thus advanced, trary construction, and to blend together objects, have been issued.

which might be kept distinct without any inconIn relation to the accounts under the control venience; in relation to the expenditure of moneys, of the Department of State, those of Mr. Jefferson drawn from the Treasury, the want of a proper have been settled since the 31st December, in the check in the War and Navy Departments, which year 1793, and no balance is due thereon. 'Those might prevent the expenditure of money, either for of Mr. Randolph have been adjusted, and a suit in- an object unauthorized by law, or beyond the stituted ever since the year 1797, for a balance of sums appropriated by law; and in relation to the about 51,000 dollars, which, notwithstanding the accountability of persons entrusted with public strenuous efforts of the Comptroller, to bring it to moneys, the delay and other inconveniences arising issue, has not yet been decided. The difficulty to from the manner in which the moneys advanced recover balances due to the United States, being for those two departments are now accounted for. one of the great impediments to public service, ex- The following provisions are respectfully subtracts of the correspondence of the district attorney mitted as necessary and sufficient for those several of Virginia, on that subject, marked B, are annex- objects, in relation to the first: ed. The accounts of Mr. Marshall have been ren- ist. That the accumulated balances of approdered, but are not yet settled. Those of the pres- priations for the Warand Navy Departments made ent Secetary of State, for the short time during before the present year, and remaining un endwhich he received public moneys, are settled, and ed, shall

, henceforih, cease and determine, except no balance is due thereon. Those of Mr. Pickering so much thereof as may be necessary to defray any have been rendered, and his general account has expense, incurred before the present year. been stated by the auditor. By this it appears, 2d. That it be enacted, by, a general law, that that, with the exception of two items suspended every distinct sum, appropriated by any law, for for want of vouchers, or disputed by the parties, an object distinctly specified in the law, 'shall he has accounted for all the public moueys receiv- be applicable only to that object; but as laws ed by him, so far as to show that the whole has can be executed only so far as they are pracbeen applied for public purposes. But as he has ticable, and unavoidable deviations will promote only designated the persons to whom the moneys a general relaxation, it will be expedient, in the were advanced by him, without specifying, under several appropriation laws, especially for the War the respective appropriations, the object for which and Navy Departments, not to subdivide the apthey were thus advanced, it is not practicable to state propriations, beyond what is substantially useful with precision, how much has been paid by him, and necessary.

State of the Finances.

In relation to the two last objects, it is proposed,

STATE OF THE FINANCES. generally, to place the expenses which relate to ihe War and Navy Departments, precisely on the [Communicated to the Senate, Dec. 20, 1802.] same footing now'established for those under the In obedience to the directions of the act supplecontrol of the Department of State, and that the

mentary to the act, entitled "An act to establish arrangement now existing for these last, be made

the Treasury, Department,” the Secretary of permanent. This may be done by providing,

the Treasury respectfully submits the following 1st. That the moneys to be paid, on account of report: the expenses, under the control of those three Departments, shall neither be paid to the head of exclusive of fees, fines, and penalties, which, in a

The permanent revenues of the United States, the Department, nor placed, subject to his drafts general view of the subject

, may be omitted, conor warrants, in the hands of the Treasurer, or any sist of duties on merchandise and tonnage, proother agent, but shall be paid, like all other pub- ceeds of the sales on public lands, and duties on lic moneys either to the individuals to whom the

postage. same may be due, or to the proper agents, or The duties on postage, which were, in the an. contractors, who are to be accountable for the nual report of last year, estimated at $50,000, have, same. The moneys paid in advance, to con- during the year ending on the thirtieth day of tinue, as usual, to be disbursed by the Treasury, September last, yielded $50,500. The decrease on the requisition only of the head of the proper of ship letters, the extension of the establishment department.

through unproductive roads, and the acceleration 2d. That the individuals to whom moneys may of the progress of the mail, may, however, cause be advanced, on account of any of the abovemen- some defalcation in the receipts of the ensuing tioned expenses, shall, hereafter, as all other re

year. ceivers of public moneys, be accountable imme- Three hundred and twenty-six thousand and diately to the accounting officers of the Treasury fifty-two dollars and eight cents have been receirDepartment; that it shall be the duty of every ed, during the same year, on account of public receiver of public moneys to apply the same only lands; of which sum, $17,162 50 were paid in the to the object for which they shall have been ad Treasury, in evidences of the public debt, and vanced, and to render quarterly accounts, if resid- $179,575 52 in specie; the local situation of the ing within the United States, and at least annu- land offices not having yet rendered it practicable ally, if abroad, of his expenditures, to the account- to draw the balance from the receivers of public ing officers.

moneys. 3d. That the offices of accountant of the War Three hundred and forty thousand acres of land and Navy Departments be abolished, and, in lieu have been sold for six hundred and eighty thousthereof, an additional auditor be substituted, whose and dollars, during the year ending on the thirtyduty it shall be to examine, and stale all the ac- first day of October last ; of which quantity near counts, generally, of receivers, of public moneys, ninety-seven thousand acres were sold on account other than those of persons employed in the col- of pre-emptions claimed by purchasers under John lection of revenue; the said accounts to be, as Cleves Symmes, and two hundred and forty-three usual, settled and finally decided upon by the thousand acres are the result of curreni sales. Comptroller, or, (if it shall be thought more eligi- The annexed statement A designates the quantible to trust to actual experience, for a proper and ties respectively sold in the several districts, and equal distribution of duties between the two audi- the annual payments receivable on account of the tors) that the said additional auditor shall ex- balance of $960,000, due on these and the preamine and state accounts of such description as ceding sales. shall be assigned to him by the Secretary of the that the annual receipts under this head will not

,

From those several results it appears probable Treasury. 41h. That no credit shall be allowed by the ac

on an average fall short of the sum of $100,000, counting officers, in the settlement of the accounts

at which they have been estimated. of individuals, except for expenses authorized by ceipts in the Treasury, on account of duties on

Although it had been anticipated that the relaw, and to the amount appropriated for the same. merchandise

and tonnage, could not, for the pres5th. That it shall be the duty of the auditors, ent year, be affected by the restoration of peace in respectively, to state, quarterly, all accounts ren- Europe, yet the sum'actually paid has exceeded dered to them, so far as the same can be supported the most sanguine expectations. $12,280,000 hare by vouchers, making, at the end of each quarter, been received during the course of the year enda new statement in relation to any account on ing on the thirtieth day of September last, a sum which a new debit or credit may be charged or larger by two millions of dollars, than the amount allowed.

received for the same duties, during the preceding Respectfully submitted.

or any other year; and which exceeds by twelve ALBERT GALLATIN,

hundred thousand dollars, the aggregate heretoSecretary of the Treasury.

fore collected in any one year, on account of both TREASURY DEPARTMENT, March 1st 1802.

the impost and the internal duties, repealed by

an act of last session. [The tables, in detail, are necessarily omitted.] This excess, which had not been calculated

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