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Application of Public Money.

least, it ought to be so considered, until it should be otherwise determined by law.

The committee are, therefore, of opinion, that a clause to this effect ought to be inserted in the bill already reported by them, respecting the accountability of public officers.

For other arrangements which appear to be necessary "to promote economy, enforce adherence to legislative restrictions, and secure the accountability of persons entrusted with public money," they refer to the bill reported by them during the present session, to provide for the due application of public money, and to secure the accountability of persons entrusted therewith, and also to the communication of the Secretary of the Treasury, made to them on the 2d of March. All which is respectfully submitted.

JANUARY 21, 1802.

SIR: I this morning submitted to the committee, appointed to investigate the state of the Treasury Department, &c., a proposition that the committee should direct their inquiries to the several particular objects contained in the annexed statement. This proposition was agreed to, and I have been desired by the committee to enclose it to you, for the purpose of obtaining from you such information as you may be able to furnish, in answer to these inquiries. It may not, perhaps, be in your power immediately to give the whole information required, but it is expected that you will transmit it, from time to time, as it can be prepared, keeping in view the necessity of all possible despatch. In the interim, it is the intention of the committee to call at the Treasury Office, at convenient periods, in order to inspect the books of the Department, and the accounts of those persons who have been entrusted with the expenditure of public money. I have the honor to be, sir, with high consideration, your obedient servant. JOSEPH H. NICHOLSON, Chairman of the Committee. ALBERT GALLATIN, Secretary of the Treasury.

Objects of inquiry submitted by the Chairman, and agreed to by 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.

OBJECTS OF INQUIRY GENERALLY.

by the agents or departments to whom the same may have been advanced?

4. What construction has been given to the appropriation laws by the Treasury Department, and by the several agents or departments to whom moneys have been advanced?

5. Have moneys always been paid by the Treasury, and applied by the agents or departments in conformity to the laws authorizing expenses and making appropriations for the same? 6. To whom, and in what manner, are the receivers of public moneys accountable?

7. In what situation are the accounts of persons at this time, who have received moneys from the Treasury, and where any of those accounts remain unsettled, what are the causes?

6. What is, particularly, the situation of accounts for moneys advanced to the Secretary of State, or to the War and Navy Departments?

9. Are the checks, under which public moneys are expended, sufficient to enforce a due applica tion to the objects for which they are advanced?

10. Can any mode be devised by which more efficient checks, in relation to the public expendi ture, may be adopted, and the accountability of those who receive moneys from the Treasury be more effectually secured, without embarrassing the public service?

TREASURY DEPARTMENT.

March 2, 1802. SIR: I have the honor to enclose an answer to

the queries proposed in your letter of the 21st January last. The statement of balances due by individuals had been prepared as they stood on the 30th June last; but, having been enabled to obtain them, since, as they stood on the 31st December last, that statement is delayed for two or three days longer, in order to give time to transcribe several marginal notes.

I have the honor to be, most respectfully, sit, obedient servant,

your

ALBERT GALLATIN. Hon. J. NICHOLSON, Chairman, &c.

In pursuance of the request of the Committee of Inves tigation, contained in the letter of their Chairman, of the 21st day of January last, the Secretary of the Treasury respectfully submits to the consideration of the Committee the following facts, observations, and

statements:

By the Constitution it is provided that "no money shall be drawn from the Treasury but in consequence of appropriations made by law." By 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?

3. How are they accounted for?

MORE PARTICULAR OBJECTS OF INQUIRY.

1. Under what checks, founded either on law or usage, are moneys paid out of the Treasury? 2. To whom are these moneys paid?

3. Under whose control, and under what checks, are moneys drawn out of the Treasury-expended

grant, under certain limitations, all warrants for moneys, to be issued from the Treasury, in pur suance of appropriations by law; and that the Treasurer shall disburse the moneys of the United States, "upon warrants drawn by the Secre tary of the Treasury, countersigned by the Comp troller, recorded by the Register, and not otherAlthough the construction given by the Trea

wise."

Application of Public Money.

sury Department to appropriation laws, may not have been universally uniform, yet it seems to have been generally understood, that the whole of the moneys, appropriated for the annual support of the Army and Navy, respectively, were to be considered as making but one general appropriation for each of those two objects; and that the sums, thus appropriated, were indiscriminately applicable to every distinct object of expenditure embraced under those two general heads.

The appropriations for the Indian department, and those made generally for fortifications, have also been mostly blended with those of the War Department. But it seems, though it is difficult to reduce the practice, heretofore established, to any uniform and certain rule, that the appropriations, in relation to the purchase of cannon, arms, ammunition, and military stores, to the purchase or leasing of foundries and armories, and to the fortifications of certain designated harbors, and, also, those in relation to the purchase of land with growing timber, or of timber, to the erecting of two docks, to the purchase or building of twelve vessels, to building and equipping three ships, not less than thirty-two guns, to the building of ten galleys, to the building six sloops of war, and six seventy-four gun ships, to the safe keeping of French prisoners, as well as those respectively made during the last session of Congress, for completing six seventy-four gun ships and the public navy yards, docks, and wharves, and for erecting marine barracks, have been considered as distinct from each other, and from all other made in relation to the Army and Navy, respectively.

The appropriations made in relation to the public debt, to the civil department, to domestic expenses of a miscellaneous nature, (such as the mint establishment, light-houses, census, &c.,) and to foreign expenses, have been generally considered as constituting, for each distinct object of expenditure, embraced under each of those general heads, a specific distinct appropriation, the amount of which was applicable only to that specific object for which it was appropriated.

letter, addressed from the Secretary to the Treasurer, which payments have, afterwards, been covered by warrants, instead of being grounded, according to law, on those warrants. And, in some instances, moneys have been thus informally paid by the Treasurer, or advanced by the Bank of the United States, before an appropriation had been made, by law, to cover the expense for which the money had thus been advanced. In every such instance, the payment has been authorized by a subsequent appropriation, and covered by a warrant, grounded on the appropriation. It must, also, be observed, that, in some instances, moneys are advanced by the collectors of the revenue, out of the public moneys in their hands, and before the same have been drawn in the Treasury. The two principal objects of expenditure, to which this exception to the general rule applies, are the expenses incident to the courts of the United States, other than those for salary, namely, those for jurors, witnesses, fees, safe-keeping of prisoners, and contingencies, which are advanced by the collectors of the customs, to the marshals, and those incident to the ordinary support and repairs of light-houses, buoys, and piers, which are, also, generally defrayed out of the public moneys, in their hands, by those collectors, or other revenue officers, under whose superintendence those establishments are placed. In those instances warrants issue as if the moneys expended had been previously drawn into the Treasury, and, afterwards, paid out of the same, to the revenue officers, in order to enable them to defray the expense.

All warrants regularly granted by the Secretary of the Treasury, on the Treasurer, for the disbursement of public moneys, issue, either in payment of a balance actually due, or in advance; in the first case, they are drawn in pursuance of a settled account, certified by the Comptroller; in the last case, they rest on the authorization of that particular department who has the control of the object of expenditure to which they refer.

on account of the compensation of the members of the House of Representatives, on his requisition, to the Speaker of the House; those on account of the contingent expenses of the House, in the same manner, to the Clerk of the House.

The payments on account of the compensations of the members of the Senate, and of the continIf 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 moneys may be said to have been drawn from the Treasury in the manner prescribed by law, only in consequence of appropriations made by law. The only object of expenditure within the knowledge of the Secretary, which may, perhaps, be excepted, is that which relates to the removal of the seat of Government. An examination of the appropriation books, kept in the offices of the Secretary and Comptroller, will give complete information on that part of the inquiry. But the Secretary here begs leave to state, that, having thought it his duty not to innovate in the usual practice, except in cases where the laws appeared to him not to admit of any doubt, his having conformed, in doubtful cases, to the construction heretofore adopted, is not to be considered as expressing an opinion in favor of the correctness of such constructions; but a custom had, till lately, prevailed, to pay moneys out of the Treasury, on a simple

The payments on account of the official contingent expenses of the several departments are made at the requisition, and are, afterwards, under the control of the head of each department, respectively; those on account of the expenses relative to the courts of the United States, other than those for salary, are made on the requisition of, and to, the marshals.

The payments on account of the Mint are made to the Treasurer thereof, on the requisition of the Director; those on account of invalid pensions, to the several Commissioners of Loans, or other agents, on the requisition of the Secretary of War.

The greater part of all other payments, in relation to the civil list, and to miscellaneous domestic

Application of Public Money.

expenses of a civil nature, as they are made only after the amount has become due, and the account has been settled, never can be liable to abuse. All other payments whatever are generally made in advance, and in the following manner:

1. Those on account of the interest on the whole of the public debt, of the annual reimbursement of the principal of the six per cent. and deferred stocks, and of the instalments of the Dutch debt, are made by the Secretary of the Treasury, as follow, viz: Those on account of the interest and principal of the Dutch debt, to the Commissioners of the United States, at Amsterdam; those on account of the interest and reimbursement of the domestic debt, standing on the books of the Treasury, to the Bank of the United States; those on account of the interest and reimbursement of the same debt, standing on the books of the several Commissioners of Loans, to the said Commissioners, respectively.

der the exclusive control of the Commissioners of the Sinking Fund.

No abuse is supposed to have taken place, in re lation to the expenditure of the advances made. for the purpose of paying either the interest or principal of any part of the public debt. All the agents are immediately accountable, and generally account regularly, to the Treasury. The whole amount of balances, due on that account. to the United States, for moneys not accounted for, is only three thousand three hundred and ninety-three dollars and forty-nine cents.

ly, to the Treasury. The credits they claim.embrace, therefore, all those to which individuals. accountable to them, were entitled, and the whole is ultimately adjusted and settled by the Auditor and Comptroller, in the same manner as all other

accounts.

2. The advances for the War and Navy Departments are uniformly made on the requisition of the Secretaries of War and of the Navy, respectively, to the Treasurer of the United States, who becomes thereby Treasurer of each depart ment, and disburses the moneys, thus placed in his hands, according to law, on warrants signed by the Secretary, and countersigned by the ac The 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 ac 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 subor ascertained to be due to the creditors, on the re-dinate accounts, and account themselves, quarterspective books of the Treasury, and Commissioners. The Commissioners of Loans render their accounts to the Treasury, quarterly; and as the dividends, which remain unclaimed for nine months, are payable only at this Treasury, such unclaimed amount is quarterly deducted from the 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 pended in relation to the Barbary Powers, those considerable apparent balance charged to them, applied to the relief of seamen abroad, those adand which consists, partly, of the dividends paid vanced in the prosecution of claims, for property by them during the six preceding months, and not captured by the belligerent Powers, the salares 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, 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 Secre 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 the It is here proper to add, in relation to the other disbursed the same, and became personally ac principally to the Secretary of State himself, who payments on account of the public debt, that those countable for the amount. The individuals, te 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

which is not ascertained.

as well as all other

the discretion of the Secretary of the Treasury, upon charged with the proper amount, and be

But, by

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 money; not actually demandable by the creditors, are un-vice are paid immediately by the Treasury to the

set

Application of Public Money.

agents or other individuals, to whom they were formerly advanced by him; and these are at once charged and made accountable to the Treasury. Those agents are, principally, the Purveyor of Public Supplies, at Philadelphia, and bankers in England and Holland.

under each distinct head of expenditure. It is, however, evident, from the account itself, and from a sketch stated by Mr. Kimbal, late clerk in his department, that, although he drew the moneys from the Treasury, under distinct appropriations, he did 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 relation 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 too 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 easy mode of investigation will be, by a recurrence to the books and accounts of the accountants themselves; and, in order to facilitate the inquiries of the committee, an account, marked A, is annexed, which exhibits the sums advanced to | each of those two departments, from the first day of January, 1797, to the thirty-first day of December, 1801, under each head of appropriation, for which a distinct account has been opened in the books of the Secretary and Comptroller of the Treasury, and by virtue of which, the warrants granted by them, for the moneys thus advanced, have been issued.

In relation to the accounts under the control of the Department of State, those of Mr. Jefferson have been settled since the 31st December, in the year 1793, and no balance is due thereon. Those of Mr. Randolph have been adjusted, and a suit instituted ever since the year 1797, for a balance of about 51,000 dollars, which, notwithstanding the strenuous efforts of the Comptroller, to bring it to issue, has not yet been decided. The difficulty to recover balances due to the United States, being one of the great impediments to public service, extracts of the correspondence of the district attorney of Virginia, on that subject, marked B, are annexed. The accounts of Mr. Marshall have been rendered, but are not yet settled. Those of the present Secetary of State, for the short time during which he received public moneys, are settled, and no balance is due thereon. Those of Mr. Pickering have been rendered, and his general account has been stated by the auditor. By this it appears, that, with the exception of two items suspended for want of vouchers, or disputed by the parties, he has accounted for all the public moneys received by him, so far as to show that the whole has been applied for public purposes. But as he has only designated the persons to whom the moneys were advanced by him, without specifying, under the respective appropriations, the object for which they were thus advanced, it is not practicable to state with precision, how much has been paid by him,

day of December last, on the Treasury books, by all the receivers of public moneys, arranged under distinct classes, and accompanied with notes, in order to distinguish those cases where the balance is merely nominal, from where it is either ascertained, or expected to be actually due.

The most apparent defects in the present arrangement, seem to be, in relation to the drawing public moneys from the Treasury, a want of specification in the several appropriations, defined by law with such precision, as not to leave it in the power of the Secretary of the Treasury to affix an arbitrary construction, and to blend together objects, which might be kept distinct without any inconvenience; in relation to the expenditure of moneys, drawn from the Treasury, the want of a proper check in the War and Navy Departments, which might prevent the expenditure of money, either for an object unauthorized by law, or beyond the sums appropriated by law; and in relation to the accountability of persons entrusted with public moneys, the delay and other inconveniences arising from the manner in which the moneys advanced for those two departments are now accounted for.

The following provisions are respectfully submitted as necessary and sufficient for those several objects, in relation to the first:

1st. That the accumulated balances of appropriations for the War and Navy Departments made before the present year, and remaining unexpended, shall, henceforth, cease and determine, except so much thereof as may be necessary to defray any expense, incurred before the present year.

2d. That it be enacted, by, a general law, that every distinct sum, appropriated by any law, for an object distinctly specified in the law, 'shall be applicable only to that object; but as laws can be executed only so far as they are practicable, and unavoidable deviations will promote a general relaxation, it will be expedient, in the several appropriation laws, especially for the War and Navy Departments, not to subdivide the appropriations, beyond what is substantially useful and necessary.

State of the Finances.

In relation to the two last objects, it is proposed, generally, to place the expenses which relate to the War and Navy Departments, precisely on the same footing now established for those under the control of the Department of State, and that the arrangement now existing for these last. be made permanent. This may be done by providing,

In

STATE OF THE FINANCES.

[Communicated to the Senate, Dec. 20, 1802.] obedience to the directions of the act supple mentary to the act, entitled "An act to establish the Treasury, Department," the Secretary of the Treasury respectfully submits the following report:

1st. That the moneys to be paid, on account of the expenses, under the control of those three DeThe permanent revenues of the United States. partments, shall neither be paid to the head of exclusive of fees, fines, and penalties, which, in a 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 same may be due, or to the proper agents, or contractors, who are to be accountable for the The moneys paid in advance, to continue, as usual, to be disbursed by the Treasury, on the requisition only of the head of the proper department.

same.

2d. That the individuals to whom moneys may be advanced, on account of any of the abovementioned expenses, shall, hereafter, as all other receivers of public moneys, be accountable immediately to the accounting officers of the Treasury Department; that it shall be the duty of every receiver of public moneys to apply the same only to the object for which they shall have been advanced, and to render quarterly accounts, if residing within the United States, and at least annually, if abroad, of his expenditures, to the accounting officers.

3d. That the offices of accountant of the War

and Navy Departments be abolished, and, in lieu thereof, an additional auditor be substituted, whose duty it shall be to examine, and state all the accounts, generally, of receivers, of public moneys, other than those of persons employed in the col lection of revenue; the said accounts to be, as usual, settled and finally decided upon by the Comptroller, or, (if it shall be thought more eligible to trust to actual experience, for a proper and equal distribution of duties between the two auditors) that the said additional auditor shall examine and state accounts of such description as shall be assigned to him by the Secretary of the Treasury.

postage.

The duties on postage, which were, in the an nual report of last year, estimated at $50,000, have. during the year ending on the thirtieth day of September last, yielded $50,500. The decrease of ship letters, the extension of the establishment through unproductive roads, and the acceleration of the progress of the mail, may, however, cause some defalcation in the receipts of the ensuing year.

Three hundred and twenty-six thousand and fifty-two dollars and eight cents have been receiv ed, during the same year, on account of public lands; of which sum, $17,162 50 were paid in the Treasury, in evidences of the public debt, and $179,575 52 in specie; the local situation of the land offices not having yet rendered it practicable to draw the balance from the receivers of public

moneys.

Three hundred and forty thousand acres of land have been sold for six hundred and eighty thous and dollars, during the year ending on the thirtyfirst day of October last; of which quantity near ninety-seven thousand acres were sold on account of pre-emptions claimed by purchasers under John Cleves Symmes, and two hundred and forty-three thousand acres are the result of current sales The annexed statement A designates the quanti ties respectively sold in the several districts, and the annual payments receivable on account of the balance of $960,000, due on these and the preceding sales.

From those several results it appears probable that the annual receipts under this head will not on an average fall short of the sum of $100,000, at which they have been estimated.

4th. That no credit shall be allowed by the accounting officers, in the settlement of the accounts Although it had been anticipated that the reof individuals, except for expenses authorized by law, and to the amount appropriated for the same. ceipts in the Treasury, on account of duties on 5th. That it shall be the duty of the auditors, ent year, be affected by the restoration of peace! merchandise and tonnage, could not, for the pres 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. $12,250,000 hare by vouchers, making, at the end of each quarter, been received during the course of the year end a 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 amoun received for the same duties, during the preceding or any other year; and which exceeds by twelve hundred thousand dollars, the aggregate hereto fore collected in any one year, on account of both the impost and the internal duties, repealed by

allowed.

Respectfully submitted.

ALBERT GALLATIN,
Secretary of the Treasury.
TREASURY DEPARTMENT, March 1st 1802.
[The tables, in detail, are necessarily omitted.]

an act of last session.

This excess, which had not been calculated

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