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AN ACCOUNT OF THE IMPEACHMENT, TRIAL, AND ACQUITTAL &c.
On Tuesday the 4th day of December, in the year of our Lord, 1792, and sixteenth of the Independence of the United States, the Representatives of the Freemen of the commonwealth of Pennsylvania, met at the State-house in Philadelphia, and proceeded to business.
ON the 7th they appointed John Swanwick, Thomas Forrest, John Chapman, John Hannum, Samuel Boyd, John Stewart, James Power, Nicholas Lutz, Jacob Eyerly, jun. George Woods, jun. John White, Abraham Hendricks, David Bradford, Albert Gallatin, James Johnston, Cadwallader Evans, Simon Spalding, Stacy Potts, Thomas Morton and William West, Esqrs. a committee to devise ways and means for the supplies of the current year.
On the next day John Canan of Huntingdon county was added to the same committee.
On the 4th of January following, a letter was received from the State-Treasurer, from which the following is an extract.
"FULLY convinced in my own mind, indeed I may say from my positive knowledge, that it never was [Page 68] the intention of the Legislature to embrace within the redemption the so called New-Loan certificates, which in fact never were a state debt.
"I was much surprised (when after observing among the list of purchasers the name of John Nicholson for 65,000 dols. all paid for in redeemable debt without any money) to see in the hands of Mr. Morris's Clerk, warrants amounting in the whole to 63,093 35/100 dols. exclusive of an order on me for 4621 60/100 dols. due Mr. Nicholson for Dollar-money redeemed, which he presented to me as payment for stock in lieu of money.
"The warrants were properly signed and countersigned, I could not refuse payment; I asked him if he knew how they originated, he said he did not, but that Mr. Morris had borrowed them that morning from Mr. Nicholson. Having previously heard that one or more hawkers employed by, and even the Comptroller-General himself were running about town purchasing up New-Loans, and that they were so eager in the pursuit that they had raised the market price on themselves from 20ʃ to 21ʃ6, I got alarmed.
"I sent a confidential Clerk to the office of the Commissioner of Loans, he returned and told me, that he saw Mr. Nicholson's name in the subscription book, but no sum annexed to it. The next morning I went down to Mr. Smith and asked him if Mr. Nicholson or any body else had subscribed New-Loans, he answered they had, put his hand in a drawer beside him, and pulled out a bundle of New-Loans and said, the Comptroller-General subscribed these and certified them to be genuine and assumable state debt and when he did, he left the subscription blank, and said, he had more to bring.
"I waited on his Excellency the Governor, the Secretary of the commonwealth, and the Register-General, and an immediate stop was put to this, in my conception, unwarrantable career of speculation, a few more warrants of less moment than the Comptroller's having been previously paid.
[Page 69]"The honorable Legislature will pardon me for being thus lengthy, when I declare, that viewing the subject as I do, it is not only a direct violation of law, but a glaring imposition on the public.
"I have made several calculations; the most moderate and exact of which is a nett profit to the speculator of near 25 per cent. If the original entries of those transactions are had recourse to in the offices of accounts, they will shew that my calculations are not exaggerated.
"Be pleased Sir to present to the honorable House enclosure B. being a memorial soliciting to be re-appointed Treasurer for the ensuing year.
"I have, &c. CHRISTIAN FEBIGER."
Treasury office, January 1, 1793.
Hon. GERARDUS WYNKOOP, Speaker of the House of Representatives.
On the motion of Mr. Gallatin, seconded by Mr. Evans, the above letter was referred to the committee on ways and means to report thereon.
On the 8th the following letters from Mr. Nicholson, were presented to the Speakers of both Houses, read, and ordered to lie for consideration.
"I UNDERSTAND a communication from Christian Febiger, Esq Treasurer, was yesterday read in the Legislature, containing reflections against me; knowing my own conduct, I feel myself perfectly secure from injury by any assault he may make, and I defy and despise the attempts, he or any other enemy I have, may make against me.
"But without regarding the character of the man, it is proper that I should take some notice thereof, I do not wish that the motives of malice which actuate him, may operate to relax from the strictest scrutiny into my conduct. I have this morning applied for and just now obtained [Page 70] from the assistant clerk of the House of Representatives, a copy of the representation alluded to, and was referred to the Printer, where I saw the statement therein referred to.
"On examination I find nothing therein but what hath already been stated in the joint report of the Register-General and myself on the revenues to the Governor, and which hath been heretofore laid before you, except the positive opinion (for they merit not the name of reasons) of Mr. Febiger, and some deductions therefrom which are worthy of himself.
"The facts being stated and before the Legislature, I should suppose they needed not the aid of Mr. Febiger's opinion on the subject: If any members of the present House regret the parting with the stock in the manner which was done, or the mode of the redemption of the debt, whether that, on which an interest had been payable half yearly, the unfunded depreciation debt, or the New-Loan debt (the two latter of which were only redeemable through the intervention of the Loan of the United States). They will find the causes thereof in the Redemption Act of last year; and while they lament the adoption of such a system, when a more advantageous one was within their reach, they have also to be thankful to Congress that it was no worse, for had the Legislature of the United States thought proper to have adopted the system of loaning State debts in the extent and manner in which it was first brought before Congress, this law would also have obligated the state to have immediately paid for all the old Bills of Credit emitted by the state to carry on the war, and which might have been subscribed to the Loan of the Union.
"I foresaw, the effects that bill if passed, would have when it was before the Legislature, and did not fail, to members of both Houses, to deprecate the consequences of enacting it, both as it regarded the parting with stock and the redemption of the debt, and also mentioned its operation with respect to the several classes of debt aforesaid.
[Page 71]"When it became a law, I availed myself of the advantage it presented as well as others, the proceedings are regular, the invitation for stock was public, all might apply, and the proposals by Mr. Febiger, either by himself or his "confidential Clerk" were as welcome as any other. With respect to the debt redeemed and for whom, it also stands on record, and hath been already laid before you, and in my purchases or application for redemption, I never used the name of another, not even a "confidential Clerk," had I thought it wrong I should not have done it, and it generally argues a conviction of impropriety to use the cover of another name, but this will be remembered that my purchases were not with the public money.
"As to the rates at which I purchased, they were such as afforded a profit, or I would not have made them, although as he observes, and I suppose found, a competition of prices, soon brought up their value in the market, but it is none of his business what these profits were.
"There are I suppose mistakes in the copy given me, where it reads, 365,000; 863,093 55/100 and 84,621 60/100 arising from his mode of prefixing his figures, the first 8 in the three cases I presume were not originally so designed, taking this to be the case, or otherwise I can't see what he hath to do with the business; whether payment of my warrant was made to Mr. Morris, myself, or any other person, to whom I chose to give an order, nor do I see why he should trouble the Legislature with the story of my giving Mr. Morris an order for the principal and interest of the Dollar-money also redeemable.
"The Dollar-money however was not mine, it belonged to a person who I believe thought himself degraded in finding Mr. Febiger appointed to succeed him in an office he resigned and had once filled.
"From the stile of his letter one would think he had the merit, if there were any merit in it, of effecting every thing as well in the department of the Governor, [Page 72] as in that of the Register-General and Secretary of the commonwealth, and that he had put a stop to it; the fact is the limited period put a stop to further subscriptions, but those few subscribed, assigned and not paid, will yet be done, the parties are legally entitled thereto, but as a doubt arose with the Governor, I paid Judge Addison the cash for the amount of his second subscription for which he was waiting that he might not he delayed as he was from a remote part of the State; the others were of this city and they have not since been brought forward till every objection be removed, but then the parties claim payment as their legal right. There remains but one thing more in Mr. Febiger's letter to notice, and that is the information from Mr. Smith's office by his confidential Clerk and himself. They are both mistaken or worse, I never delayed an account at that office for subscription till more should be added. The first I took with the certificates, I made two copies of, to expedite my business, I left one of them with the Loan-officer, the other I got him to certify immediately, and it was transferred before I left the office, the next was a few days after and contained what I had purchased in the interim, I sent them down by a messenger, and by him also they were brought back without remaining for any additional certificates to be added.
"On enquiry of Mr. Smith I find (as I expected) that Mr. Febiger got no such information from him.
I have, &c. JOHN NICHOLSON."
January 5, 1793.
The hon. SAMUEL POWELL, Esq Speaker of the Senate of Penna.
"AS the accounts of Christian Febiger, Esq as Treasurer hath been laid before you with his late representation and they also come under my consideration, it may be proper to remark thereon, that the payments [Page 73] of interest of the New-Loan debt in bills of credit as appears in said accounts is in violation of the Act of the Legislature of the 7th April, 1791, which excepted those bills from re-issue or payment, and I was astonished on the exchange of the New-Loan certificates lately for Joseph Pennel, Esq to be informed by him that he had just been paid in those bills and was unable to get any other, and wanted to know what he could do to get the money, I observe it is only to some persons this interest hath been so paid therein.
"In his letter and in his accounts, he expresses a desire that the Legislature would direct what is to be done with the old continental money and equivalents in his hands, they have already directed them to lie in the Treasury, which in my opinion is the best thing that could yet be done with them. But hath he observed these directions? no; if you look at his accounts No. 13, you will find that he hath been disposing thereof of his own authority, and in a former account he hath disposed of far the greater part of the whole continental money on like authority, and he had even the confidence to declare to me that he knew, at the time he did it that it was not authorized by the Legislature. The Assembly will please to observe that at the same time an offer was made the Legislature of ten per cent. advance upon what they would get if they chose to loan it to the United States. As I will never pass these sums to his credit in violation of law and as in my estimation, they will be of more value than he ever will be able to pay, I think it necessary also to inform the Legislature that he hath neglected to give and record the surety required of him in the manner directed by law. The House need not be informed that his former sureties will not be bound for him under another appointment. There is one thing more which hath in some measure delayed the settlement of his accounts, notwithstanding the Clerk of the late Treasurer (who was at first employed by him, and so cruelly treated afterwards) must have informed him as well of the business generally, as that [Page 74] receipts had always been taken for the interest paid or allowed on the redemption of the dollar-money, yet he neglected to do it, or if he did, to exhibit them as vouchers for the money so paid, this was the more necessary as by an interpretation of law acted on, a great difference was made in the allowance between that emission coming in by taxes and by other means; it is true he hath at last adopted that measure but is was towards the close of the time.
I have the honor to be with great respect, Sir, your most obt. servant, JOHN NICHOLSON."
January 7th, 1793.
The honorable the Speaker of the Senate of Pennsylvania.
The following letters were written on this subject soon after—
"I HAVE read with attention the letter of the Secretary of the Treasury of the U. S. dated 21 December, 1791, and the two letters of the Comptroller-General dated 24th December, 1791, and 29th of February, 1792, relative to the construction of the 18th section of the Act of Congress making provision for the debt of the U. S. It appears to me that the word "those" in the enacting part of the clause can only apply to the certificates issued by the State, but as that never could be the meaning of the Act of Congress, I agree that the construction given by the Secretary is the only rational one. Be that as it may, it is very certain that neither the New-Loan certificates of Pennsylvania, remaining in circulation, nor the Continental certificates in exchange for which these New-Loans had been issued, have been surrendered to the U. S.—It is not less certain that the payment of interest, whether to the state or to individuals has not been suspended, the present [Page 75] suspension to the state is but temporary, and arises merely from the extension of the former law of Congress by their Act of last May, and will of course cease on the first of March next, (if the former objections are not revived) and of course it must have appeared to the satisfaction of the Secretary of the Treasury that all the New-Loan certificates have been re-exchanged or redeemed. To have considered them as such is I suppose, what the Comptroller means by the "equitable decision" of the Secretary. It is however of importance to us to know what were the real grounds of that decision, as it is possible that the subscription made lately in New-Loan certificates to the loan of the U. S. may affect it materially. For if the Secretary considered the whole of the New-Loan certificates as actually re-exchanged or redeemed, it must have been, because the state law which entitled the holders to such an exchange might been supposed to have been altogether carried into effect, since not a single of those certificates had been offered for subscription to the loan of the U. S. But as some have been offered since the extension of the loan took place, that circumstance may induce him to alter his opinion, and indeed I cannot well understand how he may suppose himself justifiable in looking upon the whole amount as being actually re-exchanged, whilst he has got it in proof, that some of them are not so. Upon the first impression I should be led to think that the Secretary having once declared (by his allowing the interest not to be suspended) that the whole amount was re-exchanged (and that upon the information of the state officer) will now look upon them in the same light and return them as not assumable, an opinion which I think, may also be supported on different ground both from the nature of the certificates themselves and from the state law of 1789, which declared the state not to be liable for the payment of the principal.
"However as the whole of this reasoning is mostly conjectural, as the decision of the Secretary may, under the present circumstances, lead him to suspend the payment [Page 76] of interest to the subscribers to the loan (since it was extended at least) unless some legislative measures can prevent that inconvenience, permit me to suggest to you the propriety of procuring as soon as possible the necessary information on that subject, as I have no doubt the House or the committee of ways and means will soon apply to you in an official manner for the same. The questions which appear to me the most necessary to be solved are the following—
"1st. What were the grounds of the decision of the Secretary of the Treasury relative to the intended suspension of interest in Feb. 1791, and what construction did he give to the 18th section of the funding Act of Congress?
"2d. Does he look now on the New-Loan certificates offered for subscription to the loan of the U. S. as assumable, if so, upon what ground? if not, upon what grounds also? and will he return them soon to the subscribers?
"3d. Will his decision relative to the suspension of interest be the same now as last winter, and if it is not, what measures on the side of the Legislature of Pennsylvania, will remove the difficulties that may in his opinion now prevent the payment of interest?
"I have chosen to communicate to you my ideas on that subject as an individual, rather than to wait for the formalities of official application taking place, in order to prevent delays; which I hope will be a sufficient apology for this letter.
With sincere esteem, &c. ALBERT GALLATIN."
Philadelphia, Jan. 14, 1793.
A. J. Dallas, Esq
"Treasury Department, Feb. 8th, 1793.
"SIR,
"IT is regretted that the pressing business of this department has not till this time permitted a reply to the questions stated in Mr. Gallatin's letter of the 14th of [Page 77] January, respecting the New-Loan certificates of the state of Pennsylvania.
"It has been the uniform construction of the Act making provision for the debt of the United States, that to render any certificates receivable on the loan it was not only necessary that they should have been issued for services or supplies towards the prosecution of the late war, but also that they should at the time of being subscribed be recognized by the existing laws of the States as evidences of debts by them respectively owing.
"It was not, till lately understood, that any doubts were entertained whether the New-Loan certificates were in fact debts due by the state of Pennsylvania in every sense necessary to bring them within the meaning of the Act of Congress; it is certain, that no such doubts were suggested to the Treasury.
"The commissioner of loans was accordingly advised in June 1791 that the certificates which had been received of the State in lieu of certificates of the U. S. were receivable on loan, though at the same time he was instructed with a view to future convenience to use his endeavours with the holders to exchange them with the State.
"In consequence of an explanation which was rendered necessary by the provisions contained in the 18th section of the Act making provision for the debt of the U. S. it appeared that none of the New-Loan certificates of Pennsylvania had been subscribed to the loan of the U. S. That only the sum of about forty thousand pounds of said certificates remained to be exchanged, and that adequate and final arrangements had been made for exchanging the remainder by the State.
"This being the state of the case it became necessary to determine whether the payment of interest on the assumed debt of Pennsylvania was to remain suspended until a sum in certificates of the United States, equal to the amount of New-Loan Certificates remaining un-exchanged, was surrendered to the Treasury.
"As the provision in the law was expressly designed [Page 78] to prevent interest from being twice paid on what originally constituted one debt; an event which could not in this case happen; as it appeared inconsistent with equity, that the state should be required to surrender the certificates which were the sole consideration for which they had become indebted to their citizens when no equivalent had been stipulated therefor by the United States; as such a surrender would defeat the arrangements made by the state for effecting a re-exchange of the outstanding certificates, and a just settlement with their creditors, as a suspension of the payment of interest on the assumed debt of Pennsylvania would prove highly injurious to the rights of individuals; and lastly, as it appeared to me that the terms and intent of the law could be satisfied without assuming a construction liable to the strong objections before stated, I could not hesitate to determine, that a surrender on the part of the state was not necessary.
"I have been the more explicit in my reply to the first question proposed by Mr. Gallalin, as it appears to be the most important, and for the purpose of evincing that as the case was then presented, no doubt was or could be entertained, that the New-Loan certificates might have been subscribed to the loan of the United States. If however the New-Loan certificates are not by the laws of Pennsylvania, considered as debts, but merely as receipts for certificates of the United States, which may be demanded at pleasure—then according to the general rule of construction, the New-Loan certificates of the state will not be considered as receivable on loan to the United States, and will be restored to the subscribers.
"As the engagements of the United States appear to be somewhat implicated in a right decision of this question, I shall take measures to have the case stated to the Attorney-General of the United States for his opinion. At the same time I suggest the expediency of some measures being taken on the part of the government of the [Page 79] state, for expressing their sense respecting the certificates in question.
With great consideration and esteem, I am, &c. ALEXANDER HAMILTON."
A. J. DALLAS, Secretary of the Commonwealth of Pennsylvannia.
"IN order to obtain the best information, in answer to your letter of the 14th ultimo, I consulted the Secretary of the Treasury; and I now inclose you a copy of this communication on the subject to which you refer.
"If you think I can be of any further service to your enquiries, I beg you to suggest the points, and to rely on a prompt and chearful attendance. In the mean time, permit me to request, that you will pay particular attention to that part of Mr. Hamilton's letter, which invites a declaration of the sentiments of the government, respecting the New-Loan Certificates.
I am, &c. A. J. DALLAS, Secretary."
Secretary's Office, Philad. 11th Feb. 1793.
ALBERT GALLATIN, Esq
"AGREEABLY to the desire of the Committee of Ways and Means, I submit the following state of facts, relative to the redeeming certain abstracts of New-Loan Certificates, as stated in my report to the Honorable Legislature on the 14th January last, and contained in Book A, Article No. 3.
"It having been previously arranged with the Secretary of the Treasury, that the abstracts with receipts assigned to the Commonwealth, should be sufficient to authorise the proper officers of the United States to issue the certificates to be granted thereon, direct to the commonwealth. [Page 80] The subscribing state creditors presented a list, together with the certificates, to the Comptroller-General, who examined and certified their assumable and genuine quality, without describing the kind of debt; on which certificate the officer of loans granted the party a receipt on an abstract, which abstract and receipt were generally presented to this office, and assigned to the commonwealth. An examination with respect to the casting and interest took place, and submitted to the Comptroller for his examination and approbation, when, if approved by him, a certificate to the Governor from his office, was sent to this office, of the amount of the redeemable debt and interest, which was countersigned by the Register, and sent to the Secretary, on which a warrant issued on the Treasury.
"Of the abstracts in question, No. 264-5-6-8, and one in favour of David Rittenhouse, Esq were assigned, and sent from the Comptroller-General to this office, examined and entered as before stated, and returned to the Comptroller-General on the 7th July, and warrants issued the 9th, and were entered in this office on the 10th.
Abstract, No. 262, was sent in the same manner from the Comptroller's office, entered in this the 9th July, and a warrant issued on the 12th, and was entered the 14th in this office.
"Abstract, No. 272, was presented by Mr. Addison on the 17th July, which was the first time I knew of any New-Loans being subscribed to the Loan of the United States, and not before. A conference took place between Comptroller and Register, in which it was stated by the Comptroller, that they were within the Act of the United States, and were certainly redeemable. In this I concurred, provided the conditions stipulated by the Act of the United States, could be complied with: This he observed was a matter of the United States, and that he had or would consult the Secretary of the Treasury on the business.
"About this time, I had a conference with the Secretary, Mr. Dallas, who informed me that he had heard [Page 81] much of this business, and that it was wrong, in which the Attorney-General agreed with him—That he would put the question in writing to him, and transmit official directions for my government.
"In consequence of the communications with Mr. Dallas and the Treasurer, there was a stop put to the business until the Attorney-General's opinion should be obtained in writing, which the Secretary applied for on the 23d July, and received an answer the 28th, and transmitted the same to this office on the 31st July.
"No payments were made for any abstracts containing New-Loan Certificates, after the communications with the Secretary, Treasurer and Comptroller, save the one in favor of Mr. Addison, No. 272, for 217 dollars and 69 cents.
I have the honor to be, &c. JOHN DONNALDSON." Register-General's Office,
March 30, 1793.
To the Committee of Ways and Means.
Philadelphia, March 30, 1793.
"SIR,
"THE question which I had the honor of receiving in your letter of the 20th of March instant, is, Whether certain certificates of the commonwealth of Pennsylvania, originally issued in lieu of Continental certificates, and lately offered to be subscribed to the Loan in State debt, according to the Act supplementary to the Act, making provision for the debt of the United States, can be legally received upon loan, as contended for by the holders?
"What may be the result of a contest between the holders of those certificates, and the state of Pennsylvania, I presume, not to determine—But between the United States and that state I have no great difficulty in deciding—I am of opinion that the Acts of the Pennsylvania Assembly of the 27th March, 1789, and of the 30th March, and 1st of April 1790, abolished these [Page 82] certificates as debts of the State, except for the purpose of being re-exchanged for continental certificates, and therefore that the former, as wanting the due recognition from that state, cannot be legally received upon loan.
I have the honor to be, &c. EDMUND RANDOLPH."
The Secretary of the Treasury.
"I HAVE understood that the committee are this day again to meet on the business upon which I addressed them on the 27th ultimo; if the doubt still exists with the committee, I would propose, that it should be made a question to be argued before the Supreme Court, Whether the debt in question was redeemable under the Act mentioned?
"I am so well established in my opinion, that if the decision should be in the negative, I will go as far as to hold myself responsible to the state for the recovery and re-payment of all money paid by the state to the several creditors of that description.
I am with great respect, &c. JOHN NICHOLSON."
TO JOHN SWANWICK, Esq Chairman of the committee on ways and means.
Register-General's Office, April 3, 1793.
"GENTLEMEN,
"AGREEABLY to your desire, I have re-stated the abstract, No. 262, subscribed and assigned by John Nicholson, Esq from which I have deducted the amount of funded and depreciation debt, included in the former report, as New-Loan, and since corrected.
[Page 83]
No. 262. | Principal. | Int. Jan. 92 | Int. July, 92 | Total. |
| 47156 29 | 12842 04 | 1414 68 | 61413 01 |
Deduct the amount of depreciation & funded debt. | 1771 71 | 397 55 | 35 43 | 2204 69 |
| 45384 58 | 12444 49 | 1379 25 | 59208 32 |
I am, with respect, &c. JOHN DONNALDSON."
To the Committee of Ways and Means.
The business progressed in this manner until the 3d of April, when the committee on ways and means made the following report, viz.
The committee on Ways and Means to whom were referred sundry letters and documents relative to the subscription to the Loan proposed by the United States, and the subsequent redemption of sundry certificates, formerly issued under the authority of Pennsylvania, and commonly called New-Loan, report on that subject—
That by a law passed on the 10th day of April 1792, amongst other provision made for the redemption and final discharge of sundry debts due by the commonwealth; in the sixth section, it is enacted, That if Congress shall on or before the first day of July next, renew and again open the subscription to the loan heretofore proposed to the state creditors, or shall in any other manner or upon any other terms, provide for the assumption of the non-subscribed debts owing to such state creditors, the holder or holders of any certificate or certificates, subscribable to the subscription so renewed, or entitled to the benefit of such other provision, shall be entitled to have and receive the nominal value of the said certificate or certificates from the State-Treasurer, upon this condition and not otherwise: that they shall and do subscribe to the loan so renewed, or acquiesce in the terms of such other provision, and thereupon, on or before the first day of July next, transfer to the State-Treasurer, for the use of the commonwealth, each and every [Page 84] the certificate and certificates which they shall receive from the United States, in consequence of such subscription, or all and singular the interests and benefits to be derived from such other provision, together with the proper evidences thereof.
That by the arrangements taken in consequence of the law of Congress, extending the terms of their former loan, no certificates could issue in favor of the subscribers, prior to the 1st day of May 1793; whereupon, it having been agreed that the receipts given by the commissioner of loan, to the subscribing state creditors, should be assigned to the commonwealth, and that the certificates from the Loan-office, should issue directly to the commonwealth; the business was conducted under the following regulations: When the holder of any state-certificate or certificates, wished to subscribe the same to the loan proposed by Congress, and to avail himself of the benefit of the above-mentioned law of the commonwealth, passed in April 1792, he presented such certificate or certificates, with an abstract of the same, specifying the number, date, by whom and to whom issued, and the amount of the principal and interest, to the Comptroller- General, who after examination certified on the face of the abstract, that the certificates were genuine and assumable. The abstract being then presented to the commissioner of loan, and the certificates themselves deposited with him, the commissioner gave to the party a receitps for the same on the abstract. The abstract and receipt were then assigned to the commonwealth, and presented to the Register-General and Comptroller-General for examination, and if approved, a certificate signed by the two officers, was sent to the Governor, stating the amount due to the party, and a warrant for the same, thereupon issued according to law.
That amongst other abstracts thus declared to be assumable by the Comptroller, which passed the several offices, and the nominal amount of which (including both principal and interest,) was consequently paid to the respective holders out of the State-Treasury, there [Page 85] were sundry certificates of that description commonly called New-Loan, and which were issued by virtue of an Act, entitled ‘An Act for the further relief of the public creditors, who are citizens of this state, by receiving on loan certain debts of the United States of America, and for funding the same, and for paying the annual interest of such loans, and the interest of certain debts of this state, every six months,’ passed on the first day of March 1786; part of which Act was repealed by the Act, entitled ‘An Act to repeal so much of any Act or Acts of Assembly of this commonwealth, as directs the payment of the New-Loan debt, or the interest thereof, beyond the 1st day of April next, and for other purposes therein mentioned,’ passed on the 27th day of March 1789, wherein it is enacted that the continental certificates received by the state by virtue of the former Act, shall be returned to the holders of New-Loan certificates, upon their delivering the same, and that "so much of every Act or Acts of General Assembly as directs or secures the payment of the principal sum or sums, in the said certificates or any of them mentioned, or of the interest thereof, beyond the term of four years, shall be, and the same is hereby repealed and made null and void."
That the total amount of the New-Loan certificates thus redeemed by the state, at their nominal value, including the interest, amounts to 63,075 dollars and 37 cents; 60,220 dollars and 41 cents of which, were subscribed in the name, and of course appear to be the property of John Nicholson.
The committee are of opinion that the Comptroller-General, in the above-mentioned transactions, has been guilty of a high misdemeanor:—
First. By certifying the assumable quantity of the New-Loan certificates; the greater part of the same being his own property.
Second, By passing and certifying the same to the Executive in the usual forms of office; thereby causing them to be redeemed.
[Page 86]The opinion of the committee on the first point, is founded upon the following considerations—
1st. They conceive, that since the Act of March 1789, above mentioned, the New-Loan certificates ceased to be a state debt; were not, therefore, within the assumption of, and could not be subscribed to the loan proposed by Congress.
2. Whatever the decision of the officers of the Treasury of the United States might be on the preceding position, as it was not, by law, the official duty of the Comptroller-General to decide on it, he ought not to have done so, when a decision given under the colour of office operated in his own favor, at the expence of the state.
3d. In certifying the New-Loan certificates to be assumable, he neither consulted the Register-General, nor communicated the transaction to the Governor; and as neither the abstracts on the face of which the assumable quantity was certified, nor the official certificates on which warrants were issued, did discriminate the kind of debt that was redeemed; the checks provided by law were thereby destroyed, and the other officers of the state deluded into error.
4th. The Comptroller-General knew, by a former decision of the Secretary of the Treasury of the United States, that at all events the New-Loan certificates could not be recognized as assumable, unless an equal amount of continental certificates was delivered to the Secretary aforesaid; which no law authorised the Comptroller to do: and he was apprised that the payment of the interest to the subscribing state creditors and to the state, on account of the assumption, would have been suspended, when the time limited for receiving subscriptions to the former loan of Congress expired, had it not, upon investigation, appeared that no New-Loan certificates had been subscribed.
The opinion of the committee on the second point, arises from considering that, independent of the qu [...]stion, Whether the New-Loan certificates were within [Page 87] the assumption of the United States, they were not redeemable by the Act of April 1792? and this appears from the following considerations—
1st. No funds were provided by the Act for the redemption of those certificates.
2d. The sixth section of the Act can only be regarded as a proviso and exception to the preceding sections by which the redemption of certain descriptions of debts, which do not include the New-Loan certificates, were exclusively and solely contemplated.
3d. Even the sixth section, supposing it to stand alone, cannot admit of the construction given by the Comptroller-General, as it designates only state-creditors, and by the existing laws of the commonwealth, the holders of New-Loan certificates are declared not to be such.
Having stated this ge [...]ral view of the subject, the committee deem it their duty to present the following resolutions to the consideration of the House.
Resolved, That John Nicholson, Comptroller-General of this commonwealth, be impeached for a high misdemeanor in his office.
Resolved, That the Attorney-General be directed to institute a suit against the said John Nicholson, to recover, for the use of the commonwealth, the amount of the New-Loan certificates, which have been redeemed and paid at the Treasury of this state.
The committee in the course of their enquiries upon this occasion, have found reason to lament, that in the execution of the various, important and confidential duties, (embracing the emission of certificates and the care and management of other public property to an immense amount) which have from time to time been assigned to the Comptroller-General, an adequate check has in few cases been provided, and, in fewer still, enforced. They conceive, therefore, that the honor and interest of the state, require an early and effectual investigation of the Comptroller's official transactions; and they would be wanting in their duty to the public and to themselves, were they not to offer an earnest recommendation [Page 88] that the following resolution should be adopted.
Resolved, That a committee be appointed to examine, during the recess of the House, all the accounts and official transactions of the Comptroller-General of this commonwealth, and to report thereon at the next session of the Legislature.
APRIL 4.
A LETTER from Mr. Nicholson, was presented to the chair, and read, requesting that an investigation of his conduct may take place during the present session of the Legislature.
APRIL 5.
AGREEABLY to the order of the day, the report of the committee on ways and means, read the third instant, was read the second time.
The first resolution being under consideration, to wit.
Resolved, That John Nicholson, Comptroller-General of this commonwealth, be impeached for a high misdemeanor in his office.
On the question, "Will the House agree to the same?"
The yeas and nays being called by Mr. Gallatin and Mr. Torrence, were as follow, viz.
YEAS.
- 1 Jacob Hiltzheimer,
- 2 Henry Kammerer,
- 3 George Latimer,
- 4 John Swanwick,
- 5 Thomas Britton,
- 6 Thomas Paul,
- 7 John Chapman,
- 8 Ralph Stover,
- 9 James Bryan,
- 10 Dennis Whelen,
- 11 Charles Dilworth,
- 12 John Hannum,
- 13 Samuel Sharp,
- 14 Joseph Work,
- [Page 89]15 Abraham Carpenter,
- 16 John Breckbill,
- 17 John Stewart,
- 18 Alexander Turner,
- 19 Thomas Lilly,
- 20 William M'Pherson,
- 21 Philip Gartner,
- 22 James Power,
- 23 George Cover,
- 24 Runnel Blair,
- 25 Paul Groscop,
- 26 Nicholas Lutz,
- 27 Peter Burkhalter,
- 28 Jacob Eyerly, jun.
- 29 Thomas Hariman,
- 30 Abraham Cable,
- 31 George Woods, jun.
- 32 Samuel Dale,
- 33 John White,
- 34 Christopher Labengeier,
- 35 Abraham Hendricks,
- 36 Daniel Leet,
- 37 Albert Gallatin,
- 38 Joseph Torrence,
- 39 James Johnston,
- 40 John Rea,
- 41 Isaiah Davis,
- 42 Joseph Tyson,
- 43 Cadwallader Evans,
- 44 John Shoemaker,
- 45 Stacy Potts,
- 46 Jacob Miley,
- 47 Christian King,
- 48 Simon Spalding,
- 49 John Canan, (Hunt.)
- 50 Thomas Morton,
- 51 John Oliver,
- 52 Joseph Gibbons,
- 53 William West.
NAYS.
- 1 Robert Hare,
- 2 Thomas Forrest,
- 3 John Lardner,
- 4 Samuel Boyd.
So it was determined in the affirmative.
And the second resolution being under consideration, viz.
2. Resolved, That the Attorney-General be directed to institute a suit against the said John Nicholson, to recover for the use of the commonwealth, the amount of the New-Loan certificates, which have been redeemed and paid at the Treasury of this State.
On the question, "Will the House agree to the same?"
It was determined in the affirmative.
In the afternoon of the same day the following proceedings are recorded:—
Agreeably to the order of the day, the House resumed [Page 90] the consideration of the report of the committee on Ways and Means, read this forenoon.
And the following resolution being under consideration, viz.
3. Resolved, That a committee be appointed to examine, during the recess of the House, all the accounts and official transactions of the Comptroller-General of this commonwealth, and to report thereon at the next session of the Legislature.
A motion was made by Mr. Evans, seconded by Mr. Tyson,
To postpone the consideration of the said resolution for the present.
On the question, "Will the House agree to the same?"
The yeas and nays being called by Mr. Swanwick and Mr. Hannum, were as follow, viz.
YEAS.
- 1 Thomas Lilly,
- 2 George Woods, jun.
- 3 Joseph Tyson,
- 4 Cadwallader Evans.
NAYS.
- 1 Jacob Hiltzheimer,
- 2 Benjamin R. Morgan,
- 3 Henry Kammerer,
- 4 George Latimer,
- 5 John Swanwick,
- 6 Robert Hare,
- 7 Thomas Forrest,
- 8 Thomas Britton,
- 9 Thomas Paul,
- 10 John Lardner,
- 11 John Chapman,
- 12 James Bryan,
- 13 Dennis Whelen,
- 14 Charles Dilworth,
- 15 John Hannum,
- 16 Samuel Sharp,
- 17 Samuel Boyd,
- 18 Joseph Work,
- 19 Abraham Carpent [...],
- 20 John Breckbill,
- 21 John Stewart,
- 22 Alexander Turner,
- 23 William M'Pherson,
- 24 Philip Gartner,
- 25 James Power,
- 26 George Cover,
- 27 Paul Groscop,
- 28 Nicholas Lutz,
- 29 Jacob Eyerly, jun.
- 30 Thomas Hartman,
- 31 Abraham Cable,
- 32 Samuel Dale,
- 33 John White,
- 34 Christopher Labengeier,
- 35 Abraham Hendricks,
- 36 Thomas Stokely,
- [Page 91]37 Daniel Leet,
- 38 Albert Gallatin,
- 39 Joseph Torrence,
- 40 James Johnston,
- 41 John Rea,
- 42 Isaiah Davis,
- 43 John Shoemaker,
- 44 Stacy Potts,
- 45 Jacob Miley,
- 46 Christian King,
- 47 Simon Spalding,
- 48 John Canan, (Hunt.)
- 49 Thomas Morton,
- 50 John Oliver,
- 51 William West.
So it was determined in the negative.
A motion was then made by Mr. Hare, seconded by Mr. Morgan,
To amend the said resolution so as to read as follows, viz.
Resolved, That [...] Commissioners be appointed by law to examine all the official accounts and transactions of the Comptroller-General of this commonwealth, and to report thereon at the next session of the Legislature.
On the question, "Will the House agree to the same?"
The yeas and nays being called by Mr. Swanwick and Mr. Eyerly, were as follow, viz.
YEAS.
- 1 Benjamin R. Morgan,
- 2 Robert Hare,
- 3 Thomas Forrest,
- 4 John Lardner,
- 5 Abraham Carpenter,
- 6 John Breckbill,
- 7 John Stewart,
- 8 Alexander Turner,
- 9 Thomas Lilly,
- 10 William M'Pherson,
- 11 Philip Gartner,
- 12 George Woods, jun,
- 13 Joseph Tyson,
- 14 Cadwallader Evans,
- 15 John Shoemaker,
- 16 John Canan, (Hunt.)
NAYS.
- 1 Jacob Hiltzheimer,
- 2 Henry Kammerer,
- 3 George Latimer,
- 4 John Swanwick,
- 5 Thomas Britton,
- 6 Thomas Paul,
- 7 John Chapman,
- 8 James Bryan,
- 9 Dennis Whelen,
- 10 Charles Dilworth,
- 11 John Hannum,
- 12 Samuel Sharp,
- [Page 92]13 Samuel Boyd,
- 14 Joseph Work,
- 15 James Power,
- 16 George Cover,
- 17 Paul Groscop,
- 18 Nicholas Lutz,
- 19 Jacob Eyerly, jun.
- 20 Thomas Hartman,
- 21 Abraham Cable,
- 22 Samuel Dale,
- 23 John White,
- 24 Christopher Labengeier,
- 25 Abraham Hendricks,
- 26 Thomas Stokely,
- 27 Daniel Leet,
- 28 Albert Gallatin,
- 29 Joseph Torrence,
- 30 James Johnston,
- 31 John Rea,
- 32 Stacy Potts,
- 33 Jacob Miley,
- 34 Christian King,
- 35 Simon Spalding,
- 36 Thomas Morton,
- 37 John Oliver,
- 38 William West.
So it was determined in the negative.
And the original resolution recurring.
On the question, "Will the House agree to the same?"
The yeas and nays being called by Mr. Gallatin and Mr. Swanwick, were as follow, viz.
YEAS.
- 1 Jacob Hiltzheimer,
- 2 Benjamin R. Morgan,
- 3 Henry Kammerer,
- 4 George Latimer,
- 5 John Swanwick,
- 6 Robert Hare,
- 7 Thomas Forrest,
- 8 Thomas Britton,
- 9 Thomas Paul,
- 10 John Lardner,
- 11 John Chapman,
- 12 James Bryan,
- 13 Dennis Whelen,
- 14 Charles Dilworth,
- 15 John Hannum,
- 16 Samuel Sharp,
- 17 Samuel Boyd,
- 18 Joseph Work,
- 19 Abraham Carpenter,
- 20 John Breckbill,
- 21 John Stewart,
- 22 Alexander Turner,
- 23 Thomas Lilly,
- 24 William M'Pherson,
- 25 Philip Gartner,
- 26 James Power,
- 27 George Cover,
- 28 Paul Groscop,
- 29 Nicholas Lutz,
- 30 Jacob Eyerly, jun.
- 31 Thomas Hartman,
- 32 Abraham Cable,
- 33 George Woods, jun.
- 34 Samuel Dale,
- 35 John White,
- 36 Christopher Labengeier,
- [Page 93]37 Abraham Hendricks,
- 38 Thomas Stokely,
- 39 Daniel Leet,
- 40 Albert Gallatin,
- 41 Joseph Torrence,
- 42 James Johnston,
- 43 John Rea,
- 44 Joseph Tyson,
- 45 Cadwaller Evans,
- 46 John Shoemaker,
- 47 Stacy Potts,
- 48 Jacob Miley,
- 49 Christian King,
- 50 Simon Spalding,
- 51 Thomas Morton,
- 52 John Oliver,
- 53 William West.
So it was unanimously determined in the affirmative.
Whereupon,
Ordered, That Mr. Morgan, Mr. Gallatin and Mr. Evans, be a committee for the purposes contained in the said third resolution.
It was then, on motion,
Ordered, That Mr. Swanwick, Mr. Morgan, Mr. Gallatin, Mr. Johnston and Mr. Evans, be a committee to draft articles of impeachment against John Nicholson, Comptroller-General, for a high misdemeanor in his office, and to report the same to this House.
On the 6th Mr. Nicholson wrote the two following letters—
"Comptroller-General's Office, April 6, 1793.
"SIR,
"I AM under the necessity of writing to you as Chairman of the Committee on Ways and Means, to request copies of the sundry letters and documents relative to the subscription of the Loan proposed by the United States, and the subsequent redemption of sundry certificates, formerly issued under the authority of Pennsylvania, commonly called New-Loans, on which the report on that subject was founded.
I am, &c. JOHN NICHOLSON."
JOHN SWANWICK, Esq Chairman Committee en Ways and Means.
[Page 94]
"I HAVE the honor to inclose a copy of a letter addressed to the Chairman of the Committee on Ways and Means, and also a copy of his letter in answer, both of this date. As it is my wish, and should be that of the government, as well for the sake of justice to the public, as to an individual, to have an early investigation of the business therein referred to. Permit me to request I may be furnished with the papers referred to, as soon as possible. If a list is made of what they consist, perhaps I have the most of them already, and I will, myself, to save time, have the remainder copied, under the direction of the Clerk of the House of Representatives, as soon as I am permitted.
I am, with, &c. JOHN NICHOLSON."
Speaker House Representatives of Pennsylvania.
On the 8th he wrote the following letters—
"IF I am not obliged by the favourable decision, I acknowledge myself so by the expeditious one which hath been made of my business in your honorable House, having been gone through in one day.—I have since waited with impatience for the article of impeachment to be reported, this is now the fourth day since it was referred, and it is not yet done.
"I am anxious to have an opportunity of being heard before the Senate, my Judges, that justice may be done both to the public and myself, and am sorry again to mention the same kind of procrastination here, and with the same persons generally, which I lamented in the former report. Permit me to pray for the sake of justice, that this report be called for, which I suppose [Page 95] taking the resolution for their guide cannot be the work of many minutes.
I have the honor, &c. JOHN NICHOLSON."
The SPEAKER of the House of Representatives of Pennsylvania.
"IT hath been represented to me that in the course of debate, on my business before the House of Representatives—Albert Gallatin a member from the county of Fayette, hath stated to the House of Representatives, that it would have saved millions to the state, under the pressure of which the good people of Pennsylvania will long groan, if a different mode had been pursued by the, Legislature in our accounts with the United States, which was lost by mine.
"This is a heavy and important charge, I pledge myself that it is without foundation, and I call upon the House to require a specification of what he refers to, that an enquiry therein may take place and justice be rendered.
I am, &c. JOHN NICHOLSON."
The HON. SPEAKER of the House of Representatives of Pennsylvania.
On motion,
Ordered, That the Clerk of this House be directed to present to the Senate a copy of the third resolution contained in the report of the committee on ways and means, and adopted by this House April 5th instant, on the subject of appointing a committee to examine, during the recess of the House, all the accounts and official transactions of the Comptroller-General of this commonwealth, and to report thereon at the next session of the Legislature.
[Page 96]
APRIL 9.
THE committee reported the first five articles of impeachment, they are omitted here, as they were considerably altered by subsequent revisions, I will give them as they were read before the Senate on the opening of the trial.—The following resolves were reported at the same time, being attached to the articles, to wit.
Resolved, That the foregoing articles of impeachment be engrossed and signed by the Speaker, and that Mr. Morgan, Mr. Swanwick, Mr. Gallatin, Mr. Johnston and Mr. Evans be a committee to exhibit the same to the Senate, and on the part of the House of Representatives to manage the trial thereof.
Resolved, That the Attorney-General and such other counsel as the managers may think proper, be requested to give their attendance at the trial aforesaid, and assist thereat on behalf of the House of Representatives.
One of Mr. Nicholson's letters which had been presented to the Speaker, and laid for consideration, was read a second time, whereupon it was resolved that he should be furnished with copies of the following letters and documents.
"Philadelphia, June 23, 1792.
"SIR,
"BY a late Act of the General Assembly of Pennsylvania, provision is made, among other things, for paying the nominal amount of the state certificates which are subscribable to the Loan proposed by Congress to the state creditors, "upon this condition and not otherwise", that "the state creditors, subscribe to that loan and thereupon, on or before the first day of July next; transfer to the State-Treasurer for the use of the commonwealth, the certificates which they shall receive from the United States in consequence of such subscription."
[Page 97]"The Comptroller-General and Register-General of the state, have stated to me that a difficulty occurs in the execution of this Act; as according to their information, the certificates of the United States, for the amount of the respective subscriptions of the state, will not be issued until the first of March 1793, and of course cannot be transferred to the State-Treasure for the use of the commonwealth, at the period which the Legislature of Pennsylvania had prescribed, previously to the passing of the Act of Congress that extends the time for subscribing to the Loan.
"Under these circumstances, I am induced to request, that you will, as far as you can with propriety, enter into an arrangement to accommodate the state; and either direct the certificates to be immediately issued (since there is no reasonable ground to suppose that the subscription in Pennsylvania will exceed the amount of the assumption) or give your sanction to a transfer of the receipts which the Loan-officer issues in the first instance to the parties subscribing, so that at the regular period, the certificates may be obtained in the name and for the use of the commonwealth.
"The readiness which you have shewn on every occasion, to facilitate our fiscal operations, as far as they are connected with the federal establishment, assures me, that no apology is necessary for this application, and increases the sincere respect with which
I am, Sir, &c. THOMAS MIFFLIN."
To ALEXANDER HAMILTON, Esq. Secretary of the Treasury of the U.S.
"Treasury Department, June 25, 1792.
"SIR,
"I HAD this morning the honor of receiving your letter of the 23d instant.
"I would with pleasure concur in removing the difficulty you suggest, by anticipating the issuing of certificates for the debt of the commonwealth of Pennsylvania, [Page 98] subscribed to the depending loan, were I not apprehensive of embarrassment in other cases, in which a similar anticipation might be urged on probable ground, but could not be complied with equal safety.
"But I shall with pleasure co-operate in the alternative which you suggest; by giving a sanction to a transfer of the receipts which the Loan-officer issues to the parties subscribing, so that after the first day of March next, the certificates to be granted in lieu of those receipts, may issue in the name and for the use of the commonwealth. To this it will be only necessary, that the receipts be lodged with the proper officer of the state, accompanied by competent transfers or assignments, and that notice be given of those which shall have been so deposited, prior to the first of March next.
With very sincere, &c. ALEXANDER HAMILTON."
His Excellency THOMAS MIFFLIN, Esq
"Secretary's Office, Philad. 23d July, 1792.
"DEAR SIR,
"THE Governor directs me to request your opinion on the following statement.
"By an Act of the General Assembly, passed on the first day of March 1786, a loan was proposed, for the relief of the citizens of Pennsylvania, to receive certain continental certificates, in exchange for state certificates, then directed to be issued, and usually called New-Loan certificates: By an Act passed the 27th of March 1789, it is declared, "that so much of every Act or Acts of General Assembly, as directs or secures the payment of the principal sum or sums in the said certificates or any of them mentioned, or of the interest thereof, beyond the term of four years, shall be, and the same is hereby repealed, and made null and void." And the re-exchange of the New-Loan for continental certificates, was directed and regulated by the same Act, and in subsequent [Page 99] Acts, passed on the thirtieth of March and first of April 1790: and by an Act of the 10th of April 1792, provision is made for the redemption of certain state debts, and particularly, in the sixth section, for paying the nominal amount of those certificates, which are subscribable to the loan proposed to the state creditors, by the Act of Congress, which was passed on the 4th of April 1790, and extended in it's operation by an Act of Congress passed on the eighth day of May 1792.
"Having considered these laws, the following are submitted to your decision.
"1st. Whether, after the passing of the Act of Assembly of the twenty-seventh of March 1789, and the other Acts on the subject, the New-Loan certificates could be recognized, by the officers of the federal or state government, for any other purpose than re-exchanging them for continental certificates?
"2d. Whether the New-Loan certificates, after the passing of the above Act, by which all Acts securing the payment of either principal or interest thereof, are declared void, can be included within the description of the state debts, directed to be redeemed and paid by the Act of the 10th of April 1792?
"3d. Whether the New-Loan certificates, being issued after the war, and, as the preamble of the Act of the first of March 1786, states, for the relief of the patriotic citizens of Pennsylvania are excluded from the loan proposed by Congress, by the words or spirit of the proviso annexed to the 13th section of the Act of Congress of the fourth of August 1790?
"As it is of great importance speedily to ascertain the points here submitted to your consideration, the Governor directs me to request the favor of an early answer.
I am, &c. A. J. DALLAS, Secretary."
To JARED INGERSOLL, Esq Attorney-General of Pennsylvania.
[Page 100]
"DEAR SIR,
Philad. July 28, 1792.
"ENGAGEMENTS at court have prevented me from returning an earlier answer to your favour of the 23d instant.
"I am of opinion that after the passing the Act of Assembly of the 27th March, 1789, and the other Acts on the subject, the New-Loan certificates ceased to be a state debt within the view of the Legislature, and could not consistently with those laws, be recognized by the officers of the Federal or State government, for any other purpose than re-exchanging them for continental certificates.
"I am also clearly and decidedly of opinion, that after the passing the above Act, the New-Loan certificates cannot be included within the description of the State debts directed to be redeemed and paid by the Act of the 10th April, 1792.
"The amount of Continental debt assumed by the State of Pennsylvania, and for which New-Loan certificates were given was about five millions of dollars.
"Part of this was redeemed by payments made at the Land-office and other payments in the State-Treasury in the New-Loan certificates.
"But the sum remaining of this class of certificates, was much more than the amount of the sum 2,200,000 dollars, which the United States agreed to assume of State debt for Pennsylvania.
"The State debt what was originally and properly so called, and which the Legislature could only have had in contemplation when they made provision for such deficiency, as they considered to be left unprovided for by the continental rule of assumption was about one million, or say 1,200,000 dollars.
"Suppose this sum to be, interest included 1,200,000 the United States would give certificates as follows, viz.
At 3 per cent, per annum | 400,000 |
Deferred debt | 266,666 67 |
At 6 per cent. per annum | 533,333 33 |
| Dollars 1,200,000 |
[Page 101]"So far as 6 per cents extend, the state considered this as a full provision, in satisfaction of the debt. But for the 400,000 dollars, 3 per cent. stock, the state considered it as only payment of one half, they therefore issued other 3 per cent. stock payable by the state to an equal amount, and for the deferred stock on which the United States pay no interest, 'till the year 1801. The state agrees to pay interest annually at 6 per cent. per annum 'till that time.
"By the Act of April last, the state agrees to redeem these assumptions from the holders of the debt, by paying 10ʃ in the pound for the 3 per cents, and £. 39 per cent. for the deferred part, being the estimated value of the annuity of 6 per cent. per annum for the time limited.
"This recapitulation of facts appears to me to suggest the solution of your second question.
"If the New-Loan certificates are brought in assumable by the United States, the sum may exceed the whole that Congress have agreed to assume, and our Assembly will have encouraged measures for the exclusion of the whole of our State debt from being assumed.
"Two motives may be supposed to have actuated our Legislature.
"First—To free the state from debt that in case of necessity they might anticipate their resources by credit.
"Secondly—Selling the 3 per cent. stock of the United States at 12ʃ and paying off their 3 per cent. stock at 10ʃ affords an obvious advantage; in the deferred no less was suffered, and therefore the balance in their favour remained.
"On the New-Loan certificates they were paying no interest, the continental certificates furnished the means of redemption at any moment, without expense, the reason of the law determines it's extent, neither of those motives apply to the New-Loan certificates, it is impossible that the state could have intended, that they should be assumed by the United States, or that they were in contemplation in the provision made by the Act of April last.
[Page 102]"To the third question I am not ready at present to give an answer, it requires some information which I do not possess, but will endeavour to obtain.
A. J. DALLAS, Esq
"SIR,
Treasury Dept. Dec. 21, 1791.
"IT appearing to me, that the attention of the Legislature of Pennsylvania may be necessary to the removal of an inconvenience under which the subscribers of the debt of the state now lie, I do myself the honor to make the requisite communication to your Excellency.
"The 18th section of the Act, making provision for the debt of the United States, suspends the payment of interest in respect to the debt of any state which shall have issued its own certificates in exchange for those of the United States, until it shall be satisfactorily made to appear, that the certificates issued for that purpose by such states▪ have been re-exchanged, or redeemed, or until those which shall not have been re-exchanged or redeemed, shall be surrendered to the United States.
"It is understood that the measure contemplated in this section, was adopted by the state of Pennsylvania; that is, that a sum of state certificates was issued in exchange for an equal sum of certificates of the federal debt, and that although a part of those certificates has been redeemed, others to a considerable amount, have not been re-exchanged or redeemed, it will conduce as well to the order of the finances, as to the convenience of the public creditors, the payment of interest to whom must be otherwise suspended, if measures can be taken by the government of Pennsylvania, to make the balance unredeemed and unexchanged to appear, and if they should direct the surrender of the amount of such balance in certificates of federal debt in their old form, should the surrender of them in that form be impracticable from the circumstance of the subscription of federal debt, which was directed by the Legislature, an equal sum, of six per cent. deferred, and three per cent. stock, in such [Page 103] proportions as the balance or deficiency would produce on subscription, may be paid in lieu of certificates in their old form. This will be at the election of the state, and can be affected by no circumstance but their own convenience, as there can be no pecuniary advantage or disadvantage in either mode. I have, &c.
His Excellency THOMAS MIFFLIN, Governor of Pennsylvania.
"Report of the Sales of Stock made for the Redemption of the State Debts, in Pursuance of an Act of the General Assembly of Pennsylvania, passed on the 10th Day of April, 1792.
The date of sale. | To whom sold. | Kind of stock. | The price, | Amount of each sale. |
1792, May 1st. | John Nicholson, in trust, | 3 per cent. | 12ʃ0 ½ | 46,000 |
| Isaac Brunson, & Com. | do. | 12ʃ0 ⅙ | 20,000 |
| Griffith Evans, | do. | 12ʃ0 ½ | 3,000 |
| John Nicholson, | do. | 12ʃ0 | 7,000 |
| James & William Miller, | do. | 12ʃ0 ½ | 5,000 |
| Phillip Reilly, | do. | do. | 10,000 |
| Thomas M. Willing, | do. | do. | 10,000 |
| Isaac Brunson & Com. | do. | do. | 20,000 |
| John Donnaldson, A. | do. | do. | 10,000 |
| Ditto and Com. | do. | do. | 30,000 |
| John Donnaldson, | do. | do. | 10,000 |
| Joseph Webb, | do. | do. | 2,000 |
| N. G. Phillips, | do. | 12ʃ1 | 20,000 |
| John Lynch, | do. | do. | 10,000 |
| Robert Morris, | do. | 12ʃ0 ½ | 200,000 |
| Geogre Eddy, | do. | 12ʃ1 | 30,000 |
| George Meade, | do. | do. | 15,000 |
| Isaac Bruns [...] [...] Com. | do. | 12ʃ0 ½ | 20,000 |
| James Gr [...]ford, | do. | do. | 10,000 |
| John Nicholson, | do. | 12ʃ0 | 6,000 |
| Le Roy & [...]ayard, | do. | 12ʃ0 ½ | 159,000 |
| Walter Stewart, | do. | do. | 30,000 |
| Thomas M. Willing▪ | do. | do. | 5,000 |
| Robert Morris, | do. | 12ʃ0 | 250,000 |
| John Nicholson, | do. | do. | 6,000 |
| William Bi [...]gh | do. | 12ʃ0 ½ | 6,000 |
| John Donaldson, | do. | 12ʃ0 | 6,000 |
| Walter Stewart, | do. | 12ʃ0 ½ | 20,000 |
| Clement Biddle, | do. | do | 20,000 |
| | | | Dols. 986,000 |
[Page 104]"With the proceeds of the above sales of stock, the amount respectively in the following debts have been redeemed, the particulars of which redemption is set forth in the report of the Register-General.
Funded debt. | Funded Depreciation debt. | State 3 per cts. purpart certificates. | State 6 per cts. purpart certificates. | Debts subscribed to the United States and transferred to Pennsylvania. |
£. s. d. | £. s. d. | Dols. Cts. | Dols. Cts. | Dols. Cts. |
26,909 15 0 | 8,022 4 ¾ | 130,439 76 | 66,325 14 | 120,080 15 |
"In the amount of the debts subscribed to the United States and transferred to Pennsylvania, is included a sum of [...] in the New-Loan certificates of this state; which according to the opinion of the Attorney-General, were not contemplated by the Legislature as objects of redemption in the mode prescribed by Act of the 10th of April, 1792; and the particular statement of which is therefore subjoined.
"An account of New-Loan certificates subscribed to the loan of the United States, transferred to and paid by the state of Pennsylvania.Names of the subscribers. | Amount of interest up to January 1st 1792. | Amount of interest up to July 1st, 1792. | Amount of Principal. | Total amount of principal & interest. |
262 John Nicholson, | 842 04 | 1,414 68 | 47,156 29 | 61,413 01 |
268 Ditto, | 437 83 | 16 72 | 557 54 | 1,012 09 |
272 Alexander Addison, | 88 80 | 3 77 | 125 12 | 217 69 |
266 David Rittenhouse, | 23 03 | 3 84 | 128 | 154 87 |
266 Joseph Honeycomb, | 17 90 | 4 13 | 137 74 | 159 77 |
265 James Duncan, | 185 73 | 15 55 | 518 67 | 719 95 |
264 Jonathan Mifflin, | 340 61 | 36 75 | 1,225 32 | 1,602 68 |
| 13,935 94 | 1,495 44 | 49,848 68 | 65,280 06 |
[Page 105]"Subscribed as above said, but not paid.
282 Thomas Hale, | 37 32 | 2 77 | 92 50 | 132 59 |
277 Ditto, | 161 67 | 12 07 | 402 50 | 576 24 |
279 William Porter, | 104 44 | 7 84 | 261 45 | 373 73 |
276 George Booth, | 50 22 | 4 48 | 149 50 | 204 20 |
| 353 65 | 27 16 | 905 95 | 1,287 76 |
THOMAS MIFFLIN."
Tuesday, 4th December, 1792.
Together with a Report of the Register-General to the Legislature, Book A, which contains the different species of public debt, which had been redeemed by the state, and for whom.
Although the House had passed the resolution that Mr. Nicholson should be furnished with copies of the foregoing letters and documents, from page 96, inclusively, he was nevertheless neglected, and had been under the necessity of renewing his application on the 25th February 1794, as I will shew in its proper place.
The Cerk of the Senate being introduced, presented to the chair, an extract from the Journal of that House; and having withdrawn, the same was read, as follows, viz.
"In SENATE, TUESDAY, April 9, 1793.
"Mr. Hoge called for the resolution of the House of Representatives respecting the adjournment of the Legislature, read yesterday; whereupon the same was again read, as follows, viz.
"In the HOUSE OF REPRESENTATIVES, Monday, April 8, 1794, A. M.
"Resolved, That the Legislature will adjourn on Thursday the 11th day of April instant, to meet again on the fourth Tuesday in August next."
"After debate,
"It was moved by Mr. Hoge, seconded by Mr. Morris,
"That the word "adjourn" be struck out, and the [Page 106] word "rise" be inserted in place thereof, and that from the word "instant" to the end of the resolution be struck out, and the words "sine die" be inserted in place thereof.
The question on the amendment being put, was carried in the affirmative.
The resolution as amended was agreed to.
Extract from the Journal, T. MATLACK, Clerk of the Senate."
Mr. John Oldden appeared agreeable to summons for that purpose served on him, and being duly affirmed, answered some interrogatories, and had liberty to withdraw.
He attended the same afternoon, and had been requested to give his attendance the next day for the same purpose.
APRIL 10.
THE same witness attended again, answered certain interrogatories, and was finally discharged.
The Articles of Impeachment were read the second time.
The Clerk of the Senate being introduced, presented to the chair, an extract from the Journal of that House; and having withdrawn, the same was read, as follows, viz.
"In SENATE, WEDNESDAY, April 10, 1793.
"On motion, and by special order, the Resolution of the House of Representatives respecting the adjournment of the Legislature, this day presented by the Clerk of the House of Representatives, was again read;
"Whereupon, it was
Moved by Mr. Smilie, seconded by Mr. Hanna, and
"Resolved, That the Senate recede from their amendments on the said resolution, and concur the resolution as sent from the House of Representatives, to wit—
"Resolved, That the Legislature will adjourn on Thursday [Page 107] the 11th day of April instant, to meet again on the fourth Tuesday in August next.
Extract from the Journal, T. MATLACK, Clerk of the Senate."
A motion was made by Mr. Hare, seconded by Mr. Lardner, to postpone the consideration of the Articles of Impeachment, to introduce the following resolutions in lieu thereof, viz.
Resolved, That this House does not confide in the administration of John Nicholson, Comptroller-General of this commonwealth.
Resolved, That the Governor be requested to remove John Nicholson from the office of Comptroller-General of this commonwealth, and that this resolution be sent to the Senate for their concurrence.
Mr. Gallatin observed on this question, that he would have moved for the removal of Mr. Nicholson before that time, were it not for the existing settlement of accounts between the United States and the individual states, that he well knew that there was no man in the commonwealth so capable of doing that business as Mr. Nicholson; therefore he would vote against the above resolutions. After which the question for postponement was put, and determined in the negative.
The articles then recurring, after sundry alterations and amendments, they were adopted, and it was ordered, that they should be engrossed for a third reading.
APRIL 11.
THE articles being engrossed, were read the third time, signed by the Speaker, and sent by five gentlemen to the Senate.
"In SENATE, April 11, 1793.
"The committee being introduced, Mr. Gallatin said;
[Page 108]"Mr. SPEAKER,
"The managers, duly appointed, do, by the direction, and in the name of the House of Representatives of the General Assembly; and of all the People of Pennsylvania, impeach John Nicholson, the Comptroller-General of this commonwealth, for high misdemeanors in his office, the specification whereof is contained in the accusation and articles which we now present, and which the House of Representatives are ready to prove and maintain, at such time as the Senate shall appoint.
"Whereupon,
"The committee presented the articles of accusation and impeachment, and the same were read, &c."
Mr. Nicholson sent the following letters to the Senate and House of Representatives the same day—
"I WAS much pleased yesterday with the latter part of the report of the committee on the articles of my impeachment, wherein it is stated that the House of Representatives are ready to proceed in the promises, when the Senate shall appoint; but afterwards felt differently when I heard that before the articles were presented to the Senate, they had concurred in the Resolution of the House of Representatives to adjourn on this day.
"I have applied to that House to be heard, and pray that the House of Representatives may wait a few days before they adjourn, that an opportunity may be given for an immediate investigation of this business.
I am, &c. JOHN NICHOLSON."
The Hon. the SPEAKER of the House of Representatives of Pennsylvania.
"ARTICLES of impeachment against me have been prepared and agreed to in the House of Representatives yesterday, in which they say, they are ready to proceed in the business, when your honorable House may appoint; [Page 109] I am also ready, and pray that the Senate may rescind their vote for adjournment this day, and that this business may be taken up and investigated.
I have the honor to be, &c. JOHN NICHOLSON."
The Honorable the SPEAKER of the Senate of Pennsylvania.
"IF it be not improper I would beg leave to solicit the attention of the honorable House to my letter of the 8th instant requesting a specification from Mr. Gallatin of his assertion respecting my official conduct in the business of our accounts with the United States. I am, with great respect,
Your most obedient servant, JOHN NICHOLSON."
The Honorable the SPEAKER of the House of Representatives.
One entry in the minutes of this day, and another of the eighth, respecting Mr. Nicholson's letters, are worthy of observation. It is customary for letters and documents, presented to the Speaker, to be noted on the minutes, so as to inform the reader of the purport and contents of such letters or documents, but in the instances here alluded to, no intimation is given of their contents, purport, request or any of the usual formalities, but, "A letter from John Nicholson was read, and ordered to lie on the table."
A motion was made by Mr. Gallatin, seconded by Mr. Evans, and agreed to, That the committee appointed the 5th to examine the accounts and official transactions of the Comptroller-General, or any member of the said committee that shall have power to examine, at all seasonable hours, all the books, accounts, vouchers, certificates and official documents whatsoever, which may be in the custody of either the Comptroller-General, Register-General or the State-Treasurer, to take [Page 110] copies of the same, or any part thereof, and to require any explanations concerning the same.
That the said committee, or a majority of them, shall have power to send for persons and papers, and to summon any person or persons before them, for the purpose of giving testimony upon oath or affirmation, on the subject of the enquiries of the said committee.
That the said committee shall have power to employ such clerks to assist them, as they shall think necessary.
The committee of accounts reported eight hundred dollars in favor of the Chairman, Mr. Morgan, on account of the expences attending the investigation of the official transactions of the Comptroller-General during the recess, he to be accountable.
Messrs. Swanwick and Gallatin were appointed to inform the Senate that the House of Representatives were ready to close the present session. After Mr. Swanwick had reported his performance of that service, he observed, that the impeachment against the Comptroller was of very great importance, and that probably some of the committee might fall sick, and thereby the business of the investigation might be retarded; he therefore moved that another member might be added to the committee; this motion, not being seconded, was lost.
Adjourned to the 27th August following.
AUGUST 27, 1793.
THE Legislature met pursuant to adjournment.
AUGUST, 29.
THE committee appointed for the purpose, April 5th last, reported additional articles of impeachment against John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, which were read;
[Page 111]Whereupon, on motion,
Ordered, That Tuesday next, the 3d of September, be assigned for the second reading of the said articles, that they be the order for that day, and that a sufficient number of copies be printed in the mean time, for the use of the members.
It was then, on motion,
Resolved, That the Speaker issue his summons, commanding the attendance of Blair M'Clenachan, and Matthew M'Connell, to appear at the bar of the House on Tuesday next, to give testimony on the subject of the articles of impeachment against John Nicholson, Comptroller-General of this commonwealth.
The summons were accordingly issued.
SEPTEMBER 2
THE committee appointed to examine, during the recess of the House, all the accounts and official transactions of the Comptroller-General, made report in part; which was read,
Whereupon, on motion,
Ordered, That a sufficient number of copies be printed for the use of the members, and that it be annexed as an appendix to the Journal of this House.
It may be proper to observe, that the reading was dispensed with, and the Report sent to the printers, where it remained for a considerable time, say 2 months at least, before it was finished. It is as follows, together with Mr. Nicholson's answer to the objectionable parts. Read in the House of Representatives January 9, 1794 —and ordered to lie on the table, as usual.
"Comptroller-General's Office, Jan. 8, 1794.
"THE late House of Representatives of the commonwealth of Pennsylvania appointed a committee of their [Page 112] body, on the 5th day of April 1793, to examine the accounts and official transactions of the Comptroller-General. That committee proceeded to business by instituting, as I was informed a kind of inquisition; in which privately or without my knowledge, they sent for and examined ex parte, such persons as by reports or otherwise, they supposed might be able to testify something against me, and to this every one who had ought to say against the Comptroller-General, were invited to come and cast in their mite; my office was also opened to them and all the books and papers exhibited and exposed to their scrutiny. About the beginning of September following, they reported the result of their labors and enquiries to the late House; their reports consisted, 1st of two additional articles of impeachment, to which I shall have an opportunity to answer in a proper place, and it would be improper to say any thing of their merits here.
"And 2d of a voluminous statement on the business of their appointment, which was ordered to be printed, and which is annexed as an appendix to the Journals of the last House; this paper having been brought before the present House, and referred to a special committee, and being in many parts of such a nature as to require my, I sit down to made some remarks thereon, accompanied with documents to support the leading facts, that so you may have the matter more fully before you.
"I believe it will be fair, considering the circumstances and appointment of the said committee of the late House, at least to infer in my favour, in all parts of my official conduct where they have not otherwise reported; if therefore I shall remove prejudices where they are therein attempted to be raised, or establish facts to be the reverse of what they assert; I shall in all other parts of my official conduct (except what is still pending before the Senate) have profited by my fiery ordeal.
Committee's report.
"THAT from an examination of the powers vested in, and the duties enjoined on the Comptroller-General, by [Page 113] the laws of the commonwealth, they were led to arrange the objects of the investigation committed to their care, under the following heads, to wit.
"First. New-Loan certificates issued or received by the Comptroller, and Continental certificates or interest arising upon the same, received by him.
"Second. Settlement of accounts, and paying the depreciation of the pay of the army.
"Third. Settlement of accounts of persons having claims against the commonwealth, and issuing certificates for the same commonly called "Funded debt."
"Fourth. Settlement of accounts of persons indebted to the commonwealth, and recovering balances due by them.
"FIRST HEAD.
"BY the Act of Assembly, of the 1st of March 1786, it was provided, that a competent number of blank certificates should be prepared and signed by the State-Treasurer, and by him delivered to the Comptroller-General to be filled up, numbered, registered and countersigned. That the said Comptroller-General, should receive on loan on behalf of the state, certain certificates of the debts of the United States, in the Act described (a)
—and should issue and deliver in lieu thereof, to the persons making such loans, certificates to the amount of the principal of the certificates loaned; that he should keep regular regi [...]ies respectively of the certificates thus received on loan and of those issued to the loaners—the said registries and certificates to be subject to the examination of the Supreme Executive Council —that the Treasurer should pay interest on the certificates thus issued half yearly—that the Comptroller should receive from the United States, the interest accruing or due on the certificates received on loan— should note every such payment, whether made in money or in certificates, on the proper registry and pay [Page 114] the same to the Treasurer, to be paid by him to the United States, on account of the State. (b).
"By the Act of the 27th March 1789, so much of the preceding Act, as secured the payment of the principal of the certificates thus issued, and commonly called New-Loan, or of the interest thereof, beyond the term of four years was repealed, and it was further enacted, that the certificates of the United States, received on loan by the state, or others of the same amount, should be returned to the holders of New-Loan certificates, applying for the same at the Comptroller's office; and that the exchange should take place under such regulations as Council should direct, provided that no certificates of the United States should be delivered to the parties, until the overplus of interest, if any, paid by the state, upon the New-Loan certificates returned by the parties, beyond the interest received from the United States by the State upon the continental certificates applied for should have been paid in indents to the Comptroller. (c).
"A copy of the regulations of Council is hereunto annexed by which it appears, that the Comptroller was authorised to give the holders of the New-Loan certificates, either the original Continental certificate, corresponding to the New-Loan presented, or a like sum in Continental certificates, either of those received on loan or redeemed by the Land-office, and in cases where the exact amount could not be made, to issue for the balance a new certificate; that he was directed to keep in a set of proper books, accounts of all certificates received, delivered or issued, with their No., principal sums and dates of interest, and also of all indents, received [Page 115] or paid; (and if he considered it necessary for his own security, or for the regularity of his proceedings,) to demand receipts from all persons to whom certificates or indents were delivered.
"By an Act of the 1st of April 1784, the Receiver-General of the Land-office, was directed to deliver, at the time of settling his accounts, to the Comptroller-General, all certificates by him received, (entering on each certificate, the time of his receiving the same, and the interest due at such time▪) By the same Act, the certificates which the said Receiver-General was authorised to receive in payment for lands are described, amongst which the Continental certificates of certain descriptions are enumerated. By the Act of the 1st of March 1786, the New Loan certificates were also made receivable in the Land-office, which provision was repealed by the Act of the 27th March 1789, and the Continental certificates, were likewise declared to be no longer receivable, by an Act of the 27th of November 1789.
"By the Act of the 1st of April 1790, the Comptroller was directed to deliver to the Treasurer all the Continental certificates, and all indents the property of this state, after the same had been examined by himself, the said Treasurer and the Register-General, in presence of two members of Council, and to cancel and deliver to the Register-General, after a similar examination, all the certificates, issued by the state, and received by the Comptroller-General for the use of the state, (d)
Mr. Nicholson's Answer.
1. "The fact is otherwise as may be testified by the books thereof kept by the Register-General until the repeal as aforesaid took place."
Report continued.
—The provision which rendered the presence of two [Page 116] members of Council necessary in the examination of either kind of certificates, was repealed by an Act of the 30th of March 1791, and the provision which rendered the presence of the Treasurer necessary, in the examination of the certificates directed to be cancelled and delivered to the Register-General, was repealed by an Act of the 4th of April 1792.
"The committee examined the transactions of the Comptroller-General, in pursuance of the above-mentioned laws, in the following order—
"I. Receiving Continental certificates on loan, and issuing New-Loan certificates. Two sets of books were opened for that purpose by the Comptroller. The first of certificates received on loan, contains in distinct colums the No. of the certificate received from No. 3443 to 21,331, which No. is not the original one of such certificate, but put upon it by the Comptroller at the time of receiving the same. 2d. The No. of the New-Loan certificate issued in exchange. 3d. The sum in dollars Continental money, when the principal of the certificate loaned was expressed in that currency. 4th. The rate of depreciation, at which such sums in Continental money were to be calculated. 5th. The sum in dollars specie. 6th. The date of interest commencing.
"The second of New-Loan certificates issued, contain also in separate columns the No. of the certificate from No. 1 to 19,281, the name of the grantee, the sum in pounds, shillings and pence, distinguishing the original from the renewed certificates, the date of interest commencing, and the number of years, interest paid by the state upon each certificate.
"Separate books were kept for the New-Loan certificates issued in exchange for certain Continental certificates, dated between the 1st day of September, 1777, and the 1st day of March, 1778, which were subject to a depreciation whenever redeemed, although the interest till that period, was to be paid upon the nominal amount. The numbers of these are from No. 1 to No. 436. A committee of Council examined those books, [Page 117] and the Continental [...] with the Comptroller. They discovered and rectified several errors, 2
Mr. Nicholson's Answer.
2 "When it is considered that in the short space of time allowed to do it in, I had by myself alone without being even allowed the assistance of a clerk to check my calculations, to receive the applications and certificates from the holders of such a number as together amounted to upwards of 5 million dollars and a sixth: To reduce many of those to specie, by a difficult table which progressed daily in its depreciation; to convert the sums respectively from dollars to pounds; to file them regularly, to draw other certificates for the like amount, in many cases to consolidate and ascertain the average, or mean time of interest on the respective certificates, and insert the same, and to deliver to the parties the respective certificates of state debt. I say when this business is considered, it will not be wondered that some mistakes and errors should have been committed; for my own part, on reflection, I wonder they were so inconsiderable in their amount. In transacting this business, every individual was his own advocate, to see that he had the amount to which he was entitled; whereas there was not the same motives of interest to discover mistakes made the other way. It is to be remembered that whatever these mistakes amount to, I have rectified them with the state at my own expence, and so far as I cannot rectify them with the individuals, as well as in one case where the Continental certificates themselves, were either mislaid or stolen, I sustain the loss myself."
Report continued.
—and it appears from their report, that the total nominal amount of continental certificates dated between the 1st day of September, 1777, and the 1st day of March, 1778, received upon loan, was 735,700 dollars, and the amount reduced to specie of all other continental certificates, was 4,437,181 50/90 dollars, making altogether 5,172,881 50/90 dollars, that the tolal amount of original New Loan certificates issued in exchange for continental certificates [Page 118] of the first description, was £. 275,887:10, and the total amount of all other original New-Loan certificates, was £. 1,661,998:5:3, A mistake of £. 60 has been discovered in that sum, so that the amount is £. 1,662,058:5:3—equal to dollars 4,432,155 33/90. That sum is by dollars 5026 17/90 less than the amount of continental certificates received, which arises, as the committee were informed by the Comptroller, from sundry continental certificates being included in those books, which were received by the Comptroller for the use of the state; but not upon loan. The list is not yet furnished, but the principal amount arises from certificates for part of the commutation of pay, granted by Congress, to sundry officers who relinquished them to the state. —making altogether £. 1,937,885:15:3.
"Two enquiries might be necessary on the preceding transactions—First, Whether no continental certificates were received on loan, except such as were admissable by law? As almost the total amount of those certificates have been returned to the parties, or subscribed to the loan of the United States, it is not possible at present to investigate that point; but as the committee of Council examined all those certificates, it amounts nearly to a proof that they were within the description authorised by law to be received.—Second, Whether no New-Loan certificates have been issued, except for the continental certificates received on loan? From the examination of the committee of Council, it is known that the registry of certificates corresponded with the certificates themselves that were received on loan, therefore by comparing the New-Loan certificates, cancelled and delivered to the Register-General, with the registry of certificates issued, it will be easy to see whether they agree; should there appear any certificates which are not entered in the registry, the Comptroller must be accountable for them; but as the delivery of those certificates has but just now been completed, it is necessary in order to have complete satisfaction on that head, to wait until the Register-General shall have arranged them in numerical order.
"It has been mentioned that there is in the registry of New-Loan certificates issued, a column of certificates [Page 119] renewed. It appears that those of that description, issued in exchange for continental certificates, dated between the 1st of September, 1777, and the 1st of March, 1778, amount to £. 18,314:8:9; and all others of the same description to £. 458,917:6:5 (g) amounting altogether to £. 477,231:15:2. That custom, which extended to all the different descriptions of certificates, though publicly known, does not appear to have been authorised by law. The reasons alledged to justify it, are, that the interest of the state was promoted thereby, inasmuch as it facilitated the payments in the Land-Office; and that it accommodated individuals very much, not only on account of such payments, but also in order to enable original or other holders, who were obliged to sell a part of their certificates, to dispose of only a part, and to keep what they did not wish to sell. It produced, however, at last, one very great disadvantage, which was taking up too great a proportion of the time of an officer, whose duties were, perhaps, already too numerous. At all events it would have been better to have applied to the Legislature, in order to receive their sanction. It must also be observed, that that practice had taken place in some instances, before the appointment of the Comptroller; the Auditors appointed to settle the accounts, and issue the certificates for the depreciation of pay, having renewed some of the certificates they had granted.
"II. Re-exchanging the continental certificates received on loan for the New-Loan certificates.
[Page 120]"Two setts of books were also opened for that purpose, by the Comptroller; one of New-loan certificates received on exchange, the other of continental certificates returned to the parties.
"In order fully to understand how they were kept, it is necessary first to know in what manner the exchange was proceeded upon. An account of the New-Loan certificates he offered to be exchanged, was prepared, including the numbers of the same, and names of the grantees; the principal sum of each certificate, the number of years, interest paid by the state, and the date from which each began to bear interest, together with the amount of interest, either due on the face of the certificates upon the 31st day of December, 1787, or paid by the state beyond the same date. To those calculations were added, on the same account, the numbers and amount of the continental certificates returned by him in exchange, together with the date of interest commencing, and the amount of interest due on each, respectively, on the 31st day of December, 1787. This last amount, together with the amount of interest paid by the state, upon the New-Loan certificates offered to be exchanged beyond the 31st day of December, 1787, was charged to the party applying for the exchange; and the amount of interest due on the face of the New-Loan certificate thus offered for exchange on the said 31st day of December, 1787, was carried to the credit of the said party; and the difference between the two amounts, was the sum to be paid in indents, or 3 per cent, stock, either by, or to the party, in order to equalize the interest. All the accounts were numbered and filed; at the same time were entered, in distinct columns, in the book of continental certificates returned, the number of continental certificates returned to, and of New-Loan certificates received from each party; the amount of principal in specie dollars of the continental certificates: the date of interest commencing on each; the amount of interest due on each on the 31st day of December, 1787; and the amount of [Page 121] indents or 3 per cent. stock, paid to or by the parties, respectively. In the last column of each entry, the number of the account presented was inserted, and the party signed his name, acknowledging the receipt or payment of indents.
In the book of New-Loan certificates received on exchange, which was filed afterwards by the help of the numbered accounts, were entered the number of each certificate received; the names of the grantees; the sums of principal of each certificate; the years of interest paid by the state as endorsed on the back of each certificate; the date at which interest commenced on the face of each certificate; and the amount of interest either due on the certificate on the 31st of December, 1787, or overpaid by the state beyond the same date. In distinct columns were entered the numbers and amount of the New-Loan certificates, called Surplus Certificates, which were at first issued by virtue of the resolutions of Council above-mentioned, in those cases where the exact amount of the New-Loan offered for exchange, could not be paid in Continental certificates. After the public offices of the United States had been removed to Philadelphia, that mode was no longer pursued, but the difference which might be due to the parties, was, by the Comptroller, assigned to them in 6 per cent. and deferred stock, or registered debt upon the books of the Treasury of the United States. It is also proper here to observe, that although the above-described mode of exchange was the common one, yet in some instances it was not followed, but the Comptroller assigned on the said books of the Treasury, to the parties, an amount of 6 per cent. deferred, and 3 per cent. stock. equal to the amount of New-Loans offered by them for exchange. Whether this was done by the Comptroller's going and subscribing himself for the parties, the Continental certificates due to them, or whether he had previously subscribed for that purpose a number of Continental certificates deposited with him, your committee cannot pretend positively to decide. If the last, however convenient [Page 122] it might be, it was altogether unauthorised, either by law, or by any resolutions of Council that have come to the knowledge of the committee. The books of Continental certificates delivered so far as they are receipted, are a complete proof of their being delivered, and at all events, that transaction will be checked by the examination of the New-Loan certificates delivered to the Register.
III. Receiving Continental and New-Loan certificates for the use of the state.
The bulk of those certificates were received from the Receiver-General of the Land-Office, and sets of books were opened by the Comptroller, formed from the accounts delivered by the Receiver-General, containing the principal sums of the certificates, the date to which interest had been paid upon each certificate, and the interest calculated upon each from that date to the 1st of January, 1791. The amount of the New-Loan certificates thus redeemed, is £.118,470:6:6 Those books do not contain the numbers of the certificates; but so far as relates to the New-Loan certificates there is another auxiliary book containing the numbers of the certificates; the names of the grantees, the amount of principal, and the number of years; of interest paid at the time the Comptroller received the certificates. That book was formed by the Comptroller, from the certificates themselves; but as the amount of those books, to wit, £. 118,179:10:6, did not agree with the amount of the other book, the committee adopted the result of this, it being checked by the Receiver-General's accounts, and having been compared therewith by the Register-General..
The amount of Continental certificates is, £.328,924:6:3. The calculations of interest are designed (by being checked by similar calculations made by the Register upon the certificates as delivered by the Comptroller) to show that no interest was drawn upon the same by the Comptroller since he received the certificates. The same has been done in regard to certificates of all descriptions whatever, received by the Comptroller. In addition to the foregoing certificates, the Comptroller must be charged with the Continental certificates mentioned in the note (f); with one in the name of [Page 123] Scott, and one in the name of Thompson, as mentioned by preceding reports of the Comptroller; and with another one of 5782 21/90 dollars, received of Wade, in payment of a debt, and subscribed to the loan of the United States. He must likewise be charged with a New-Loan certificate, received of George Woods, as mentioned in former reports; and one of £. equal to 533 77/90 dollars, received in balance of account from Atlee.
"The annexed accounts marked A, B, C, D, E, F, will fully explain the accounts of the Comptroller, as to this first head.
"The account A, is introductory to the others, and exhibits the general account of the New-Loan debt. By that account it appears that the amount of New-Loan certificates yet in circulation, is £. 33,722:3, which amount includes those offered for subscription to the loan of the United States. The Comptroller has prepared from his books a list of the identical certificates thus outstanding; but it is not perfectly checked; as soon as the Register-General shall have arranged the certificates delivered to him in numerical order, he will be able to form an accurate list of the same.
"The Comptroller should have in his possession an amount of Continental certificates equal to that balance of New-Loan outstanding. From the examination made by the committee of the certificates of that description in his possession, it appears that he has only 81,384 11/90. dollars, equal to £.30,519:0:11, leaving a deficiency of £.3,203:2:1, equal to 8,541 55/90 dollars, for which he must account. The same result will appear from the account of the Comptroller with the Continental certificates received upon loan, marked C, and from his account with the Continental certificates received for the state, marked D, it appears that he is indebted for a balance of 3,914 41/100 dollars; these two balances together make a sum of 12,456 2/90 dollars, 3.
Mr. Nicholson's Answer.
3. "That there will be some balance deficient, I am [Page 124] certain, for the same reasons mentioned in page 117 and, that the errors committed in re-exchanging, may perhaps exceed those committed in the first loaning is also possible, inasmuch as the business was more complex and difficult; however I hope for my own interest, that on settlement of these accounts, it will be found the committee were mistaken in the amount. Whenever that settlement shall have been completed, as the committee in the 20th line of this page require, whatever balance may remain, shall "be replaced by the Comptroller immediately."
Report continued.
—and although it may happen from some mistakes, that each of the two separate balances be wrong, yet the aggregate must be right, unless either the sum of Continental certificates received on loan, as returned by the committee of Council, or the sum of New-Loan certificates delivered to the Regist [...] as returned by the Comptroller, be wrong. That sum should be replaced by the Comptroller immediately.
"The account B, which is the Comptroller's account, with New-Loan certificates received by him, requires no observation, except that the whole amount of the certificates of that description delivered by him to the Register, except only a sum of £. were so delivered since the appointment of the committee. 4
Mr. Nicholson's Answer.
4. "This might give the thing an appearance that such an appointment was necessary to hasten their delivery; the fact was, that pending the examining and advocating the accounts of Pennsylvania, under adjustment with the Union, every other business that could be suspended, was put off; this was of that class, and delayed until it was done after the committee's appointment and for that reason."
Report continued.
—But in order more fully to understand the account of indents and [Page 125] interest accruing upon New-Loan and Continental certificates, the property of the state, marked E, it is necessary to observe that the sources from whence the state drew those indents, were, 1st. A sum equal to the interest paid by the state upon the New-Loan debt. 2d. The interest accrued upon the New-Loan and Continental certificates redeemed by the Land-Office, or that had in any other way become the property of the commonwealth from the time to which interest had been paid upon the same when thus redeemed, until the 31st of December, 1790, when the arrearages of interest were funded by the United States.
"But upon an examination of the subject, it appeared that a great deficiency had arisen under the first head beyond the balance for which the Comptroller was accountable. The account F, states that deficiency, by which it appears that the State-Treasurers have been credited by a sum of £ 11,598:9:9, over and above the sums which from the endorsements on the certificates appear to have been paid. This must have arisen either from the State-Treasurers, having through some mistake, been credited for a larger amount than they had disbursed, or from the whole amount of interest paid, having not been endorsed on the certificates. In either case the balance must be repaid to the state by the officers who have been guilty of the neglect; but it will require a very long examination, and a comparison of the endorsements on each certificate, with the corresponding payments at the Treasury, before it will be possible to discover exactly where the mistake or the fault lies. 5.
Mr. Nicholson's Answer.
5. "As the last paragraph refers to the State-Treasurers and not to me, I pass over without observation, save that the method they mention, hath long before their appointment been adopted and proceeded in by me, and that it requires, as they say, a very long examination, &c. to insert in the books opposite the certificates respectively, every successive payment of interest made [Page 126] thereon, and that however great the work, it is now nearly finished."
Report continued.
"In the mean while, in order to ascertain the balance which, exclusively of that deficiency, might be due to the state, the committee charged the Comptroller, as will appear by the account E, with the amount of interest which appeared to have been paid upon the face of the certificate re-exchanged or redeemed by the Land-Office. But as the Register has not yet furnished the committee with the total amount which, from the examination of the certificates themselves, will appear to have been paid upon the certificate re-exchanged; the committee have been obliged to rest, for the present, satisfied with a rough calculation made by themselves from the books of New-Loan certificates received on exchange. They have also charged the Comptroller with the indents he had drawn upon the continental certificates yet in his possession, and with four years interest upon the two balances, amounting together to 12,456 2/90 dollars, which appear to be due by him in continental certificates, from the accounts, C, and D.
"It will appear by the credit side of the same account E, that 27,473 28/100 dollars, in indents and 3 per cent. stock, which should have been paid long before, were delivered or transferred to the Treasurer only in June last. The committee thought themselves obliged to write to the Governor on that subject, in order to hasten the delivery. By the same account it appears that the the Comptroller is accountable for a balance of 47,544 33/90 dollars, a great part of which, should, in the opinion of your committee have been paid before this time. It is however, proper to observe, 1stly, That about 20,000 dollars, part of the said balance, arise from indents due by parties (upon equalizing the interest on the exchanges of New-Loan and continental certificates) which they had not paid, by the information of the Comptroller, in June last, but for which he is accountable as by the resolutions of Council above-mentioned, he was not to [Page 127] deliver any continental certificates until he had received the full amount of interest due.—2ndly, That the Comptroller has mentioned that he would transfer to the state whatever balance might appear to be due by him, as soon as the same was ascertained. 6
Mr. Nicholson's Answer.
6. "It is not necessary for me to make any remark on the balance of indents, represented by them in the 10th line from the bottom of the 126th page, to be also due from me, as they have stated themselves in the 15th line preceding, that it grew out of a "rough calculation" they had made, and as they have also herein done me the justice, in the 3d, 4th, and 5th lines of this page, to mention what I had said that if any balance might appear due from me, I would transfer it to the state ‘as soon as the same was ascertained.’
"As the committee there also observe in the six last lines of the 126th page, and two first lines of the present one, I know that I am not to expect from the state, a credit for indents due by individuals. It is a debt due from them to me, and if lost, or such part thereof as may, it must be sustained by myself. The exchanges required by law could not be deemed to be made, until those indents were previously paid, as it is thereby expressly directed.
"In the beginning of the sentence, and at the 17th to the 14th line from the bottom of the last page, the committee again mention the late delivery of about 27,000 dollars in indents, to the Treasurer; the fact is, the quantity not funded, was small in itself, and consisted of a great number of small and broken indents which it required time to count, and which time was then, I thought better employed at our accounts with the United States. It was therefore delayed as well as much other business until that throng was over, after which they were attended to; they would have been delivered then, had no steps been taken by that committee, who I conceived had nothing to do with it. It is further observable, that a considerable part of the said 27,473 dollars [Page 128] 28 cents, was already funded and stood to the credit of the state, so that the interest came as regularly into the Treasury, as if the stock had been in the Treasurer's hands."
Report continued. "SECOND HEAD. "Depreciation Debt.
"BY an Act passed on 18th day of December, 1780, Council were directed to appoint three Auditors, with powers to settle the accounts of the officers and soldiers of the Pennsylvania line, in the Act described for the depreciation of their pay, and to issue certificates for the same. By an Act passed on the 10th of April, 1781, Council were empowered to appoint additional Auditors for the purpose of carrying into operation the last mentioned Act; they were also directed to draw upon the State-Treasurer for such sums of state-money as they thought convenient, and to place the same in the hands of commissioners to be appointed for that purpose, who should, before the first day of May following, repair to the several rendezvous of the regiments, and pay to such of the officers and soldiers who should apply for the same, one third part of the sums specified in the Depreciation certificates, issued to them by the Auditors; and after receiving the old certificates, should transmit them to the Treasurer, and issue new ones for the balance. By the same Act it was provided that such persons as should not apply to the commissioners, might at any time afterwards apply to the Treasurer, who was directed likewise to pay one third of the original certificates in state-money, and to issue new ones for the balance. In conformity to those two laws, James Stevenson and John Nicholson were appointed auditors and commissioners, together with several other persons, but the presence of one of them was declared to be necessary in transacting the business of commissioners, and they were directed to collect all the papers and vouchers relative to those transactions. Receipts were also directed by Council, [Page 129] to be taken for the payments in shilling-money, and all the commissioners have accordingly settled their accounts with the former Auditors of accounts.
"By an Act of the 13th of April, 1782, the Comptroller-General (whose office had been instituted by another Act of the same date) was directed to settle the accounts of the depreciation of the pay of several officers and others in the Act described, and Council were authorised to draw on the Treasurer, for such sums of state-money as might, from time to time appear, by the report of the Comptroller-General to be necessary, and to place the same in the hands of the said Comptroller, who should pay to such persons as might apply for the same, one third part of the sums found due on settlement in bills aforesaid, and for the remaining two thirds, they should receive certificates in like manner as the other troops of the state. Although, by the Act instituting the office of Comptroller-General, the office of Auditors to settle the accounts of depreciation, had been virtually abolished, yet neither by the same nor by the last mentioned Act, was any provision made for settling any original depreciation accounts, except of those in the Act specially defined, nor for issuing of course any original certificates except for them, and, indeed, from the general tenor and expressions of the last Act, the power to pay one third in money, and to issue certificates for the two thirds remaining, seems confined to the same description of persons (e).
Mr. Nicholson's Answer.
— "Here the committee are at some pains to define the import of a section of the law of 13th April, 1782, which I was thereby required to execute; the words directed me to pay in state-money of 1781, to "such persons" as should apply therefor, one third of the depreciation allowed at settlement—this I did; but [Page 130] had the words been "to such of the persons aforesaid" as should apply, I should then have conformed my conduct to what they thought it ought to have been under the law as it stands. To me it appears plain; I never had a doubt of its meaning, nor should I have supposed a doubt would have existed with any, had it not been for this of the committee.
"I do not indeed find that they suggest any articles of impeachment against me for this violation of their construction of the law; had the advantages which were gained by the state, in the saving of interest, on the third part thus paid by me, lay on the other side, so as to have formed a debit of account, and charge against me, no doubt it would have had a different turn with them."
Report continued.
—By the Act of the 20th of September, 1782, all the powers formerly exercised by the above-mentioned Auditors, were vested in the Comptroller, whereby he became authorised to settle all depreciation accounts, and to issue original certificates for the same—a power which he seems however to have exercised from the time of his appointment. 8.
Mr. Nicholson's Answer.
8. "Had this committee been desirous of a candid investigation, and enquired, I could have shown them that the very reverse of this was true; that in no one instance was this power exercised until it was legally given, and that in fact it appears from the minutes and files of the Assembly, the next law alluded to was founded on my representation, that I had not power to adjust and certify those claims, the settlement of which it provided for."
Report continued.
—He also exercised all the powers vested formerly in the above-mentioned commissioners, who were authorised to pay a third in money, and to issue certificates for the two thirds remaining, although they were not farther [Page 131] vested in him than by the above-mentioned 9th section of the Act of the 13th of April, 1782, (i). 9.
Mr. Nicholson's Answer.
9 "Here also they misrepresent the matter, no such thing happened. I exercised none of the powers of those commissioners after I ceased to be one of them myself. The payments therein referred to, were made by me, in consequence of directions and authority to the Comptroller-General; and the payments thereof from the Treasury, were on express warrants of the Supreme Executive Council, founded on the reports of the Comptroller-General, as by a reference to the law and those drafts and reports will appear."
Report continued.
"By an Act of the 25th of March 1786, it was enacted that, in order to prevent frauds, no depreciation certificates should be delivered except to the parties themselves, their attorneys in fact or executors, or to their administrators legally entitled to the same, or a share thereof, by succession ab intestato; and that all depreciation certificates unclaimed on the 1st of April 1787, should escheat to the commonwealth; the Comptroller-General was further directed, within two months after the said day, to transmit a list of all such unclaimed certificates remaining in his hands, and of all that might have been claimed, if any, together with the certificates, to Council, that the same might be endorsed and rendered useless.
"By the Act of the 18th of December 1780, confiscated estates were directed to be sold at public vendue for depreciation certificates, which were to be delivered to the State-Treasurer, and by him cancelled, in such manner as the Assembly should direct. All the certificates thus received by the late Treasurer, Mr. Rittenhouse, were delivered to the Compttoller-General.
"By an Act of the 12th of March, 1783, a certain [Page 132] tract of land, lying north-west of the Ohio and Allegheny rivers, and in the Act described, was directed to be sold at public vendue, for depreciation certificates, to be paid to the Receiver-General of the Land-Office.
"By the Acts of the 1st of April, 1784, and 8th of April, 1786, depreciation certificates were made receivable in payment for lands, and city lots, and payable for both to the Receiver-General, who was directed to deliver the same to the Comptroller-General.
"Provision was made for the final redemption of those certificates, and those commonly called Funded Debt, by the Acts of the 9th of April, 1791, 10th of April, 1792, and 9th of February, 1793.
"Previous to the appointment of the Comptroller-General, the Auditors and Commissioners vested with the power of issuing depreciation certificates, went, according to the orders of Council, to several posts, and there settled the accounts; issued the certificates, and made the payments in shilling money. The Comptroller is in possession of the books they kept of their transactions; of the counter parts of the certificates issued by them, and other vouchers. The certificates received by them upon renewals, were also delivered to him. The books of those transactions are not all of them equally correct and perfect. From them, however, and the counter parts, the Comptroller has formed books of depreciation certificates, issued before his appointment; and has continued them in the same form for those issued by him. Those books contain the numbers of the certificates; the names and rank of the grantees, and the amount of each certificate, distinguishing the original from the renewed, but do not distinguish in the column of original, those which were granted in full, from those which were issued only for two-thirds (the other third being paid on settlement) nor in the column of renewed, those which were granted for the accommodation of the parties in exchange for, and to an equal amount of other certificates, from those which were issued for two-thirds only of the original certificate; [Page 133] the other third having been paid in shilling-money. Those books, therefore, are not, alone, sufficient to settle either the general account of depreciation debt, or the account of the Comptroller with the depreciation certificates by him received. For in order to know the total amount of the depreciation debt paid by the state, it is necessary to add to the amount of the original certificates issued, the amount of shilling-money paid upon settlement, exclusively of those certificates; and the Comptroller, exclusively of all the certificates he may stand charged with for renewals, must also he charged with the whole amount of the shilling-money paid in part of original certificates, as the amount of those original certificates delivered by the parties, upon receiving one-third thereof in said money, and the remainder in new certificates, exceeds the amount of those renewed certificates exactly by the amount of shilling-money, thus paid the parties in part.
"The Comptroller, at the request of the committee, furnished them with copies of the accounts of the several Commissioners appointed to pay that shilling-money, as settled by the former Auditors of accounts, and as those accounts did not in all cases distinguish between the money paid upon settlement, and the money paid in part of certificates, he, by sundry letters and memorandums, informed the committee of the sums respectively paid. The accounts of the Comptroller himself in shilling money, have been settled by the Assembly as far as the 11th day of November, 1782; his accounts from that day to the 19th of November, 1783, were exhibited to the committee, and he furnished to them an abstract of his accounts from the 19th of November, 1783, to the year 1787. Those last accounts were sent, since the appointment of the committee, to the Register-General, to be examined and settled by him according to law. Some of those accounts may have been entered in the general books, of which mention will be made hereafter, under the fourth head, but all of them were not, and such as were, were not so digested as to [Page 134] distinguish between the money paid on settlement, from the money paid in part; and of course would (had it not been for the explanations of the Comptroller) have been insufficient for settling either the accounts of depreciation debt, or of the Comptroller.
"The account G is the general account of the state with the depreciation debt. The debit side is left blank, as no accurate calculation has been procured of the same, and it is now useless. The credit side consists of the shilling money paid upon settlement of the total amount of original certificates issued, (distinguishing in each case the amount paid, or issued by the Comptroller, or by the respective Commissioners or Auditors) and of the escheats as returned to the Secretary of the Commonwealth, per list annexed. (k)
Mr. Nicholson's Answer.
10. "I had, on estimation, returned them, at £.57540."
Report continued.
—The letter and return were sent in pur [...]nce of a request of the Governor of the 29th of May 1792. According to the law, whose intention was clearly to prevent any certificates issuing after the 1st of April 1787, he should have made that return five years [...]ner than he did. 11.
Mr. Nicholson's Answer.
11. "It will not appear strange, that in an estimation, where, as the committee observed, no exact calculations thereof were made, there should be a difference as great as the above, from the true amount: but it is to be also considered, that the first amount was lessened by certificates granted after April, 1787, as appears by the books and receipts for accounts settled after the same date; [Page 135] but which had been rendered before it; and owing to the want of testimony, and additional proof, were postponed till afterwards; so that here, also, if the committees intention of the law was right, "that it clearly prevented any certificates issuing after the 1st April, 1787" —that law was violated by the Register-General and myself, for several of those accounts were not settled till after he came into office in 1789; but the law admits no such construction as may appear therefrom.
"Having made out the depreciation certificates only as they were applied for, I had no return of any to make as I informed the Council at the time, except some I had stopped, on the presumption that though they were delivered by the Auditors, they had never come to the possession of the parties in whose favour they were granted. These certificates with a list thereof I took up to the Council chamber, but there was a controversy and suit then depending respecting them, and therefore they could not be cancelled. This being what the law required of me, I did not delay it as the committee say, for five years; the fact is the list furnished the Governor at his request in 1792, whatever purposes it might serve, was not the one required by law; it was however furnished when asked, and had it been requested by the Executive Council they should then have had it."
Report continued.
"Three enquiries arise on the subject of the issuing depreciation certificates—1st. Have no other certificates been issued than those entered upon the books of issue? 2d. Have no certificates been issued in the name of persons who, by the terms of the laws, were not entitled to the same, 3d. Have the certificates always been delivered to the persons in whose name they had issued, or to their legal representatives? The answer to the first query may be obtained, from a comparison of the books, with the certificates delivered to the Register, after the same shall have been numerically arranged, and with the list of those subscribed to the loan of the United States. Should any certificates appear, upon such examination, [Page 136] to have been issued by the Comptroller, and not have been entered, he must account for the same. The second enquiry will require a minute comparison of every certificate, with the number, rolls and other vouchers upon which the certificates issued. As to the third, it will be very difficult fully to ascertain it, because prior to the law of the 25th March, 1786, no receipts were taken for certificates either issued by the Auditors or the Comptroller. There is however a kind of indirect proof, by which a great part of those certificates are discovered to have been issued to the parties themselves. Many of the certificates were assigned, and receipts were taken on the back of those which were discharged in part, in shilling money for the same. The committee were furnished by the Register-General with the depreciation certificates delivered to him by the Comptroller; they examined them, set aside all those which appeared to them, upon the face of the same, to bear evidence of their having been delivered to the parties; and formed a list of the others, a copy of which they are to transmit to the Comptroller, as he thinks he may collect some other indirect proofs respecting many certificates upon which no receipt nor assignment appear (l).
—A similar examination should take place in regard to the certificates delivered by the Treasurer to the Register, and to those subscribed to the loan of the United States, if they can be obtained for that purpose. It will be also necessary to examine the letters of administration, and receipts given by administrators for all certificates issued to the estate of any deceased person (m).
—The frauds committed by individuals, in procuring through the means of such letters, certificates they had no claims to; and the committee are of opinion suits [Page 137] should be instituted against the parties where they can be discovered, and where there is any probability of recovering any part of the same. 12.
Mr. Nicholson's Answer.
12. "Here the committee represent that they went into an investigation of the depreciation books and certificates, and they report the progress they made therein. The examination of these accounts hath been proceeded in some length by the Register-General, and I am in hopes will soon be finally closed and settled by him. But ho [...] the committee could (if the papers had not been in the possession of the United States), or how the person who examines the letters of administration granted for estates of persons deceased, can, as the committee say, at settlement discover the frauds which have been committed by individuals, so as to institute suits against the parties, exceeds my comprehension. I will allow that the gentlemen of that committee possessed a great deal of wisdom, some of them a great deal indeed! but it must require more knowledge than heaven hath imparted to us mortals to determine from an inspection of a letter of administration regularly granted, whether the person on whose estate it was granted, was dead or alive, without some other knowledge of the fact, or whether even before the Register of Wills there might not have been an assumption of false names. If these frauds are discernable from such examination, I was certainly to blame in not detecting them before I delivered any estate upon them."
Report continued.
"Beside the books above-mentioned, there are books kept in the Comptroller's office of the certificates redeemed by the Land-office, perfectly similar to those mentioned under the New-Loan head (n);
—but there are none of certificates received and renewed, nor is it possible to ascertain in every case of renewals, for what number each renewed certificate was issued.
[Page 138]"By the account H, which is the general account of the depreciation certificates issued, it appears that there is yet a balance outstanding, not redeemed, amounting to £. 3,710:4:3¾. Two of the items require some explanation; the first, of certificates stopt or delivered, includes the certificates of Christie and Ryan, (from which the letters of the Comptroller to the Governor, dated the 22d of June, 1792, and the letter of the same to Council, dated April the 7th, 1788, will account) a certificate in the name of [...] upon which Col. Forrest administered, in order to prevent its being taken fraudulently, by virtue of some letters of administration, and which he left with the Comptroller, in order that it should be delivered to the proper party, who has never applied for the same; and another one in the name of Hardie, stopt by the Comptroller. The second item of errors discovered, amounting to £. 5,051:12:1¾, arises from errors made by the auditors in the settlement of the accounts for the depreciation of the pay, discovered by the Comptroller, and recovered by stopping the certificates and issuing new ones to a less amount. This amount was not entered in the books, (although both this account, and the account of the Comptroller with depreciation certificates, could not be settled without knowing it,) and has been furnished as a separate account, by the Comptroller.
"The account I, is the account of the Comptroller with depreciation certificates by him received. He is credited in that account for a sum of £. 2833:14:4, for certificates renewed (with which he is charged on the debit side) the original of which had been lost, but were renewed by special resolutions of the Assembly, and for which, of course, he should not be charged, as he never received the original corresponding thereto. That amount has been furnished by the Comptroller, but not compared with the resolutions by the committee. It appears by that account, that there is a balance of £.5,551:2:10 in favour of the Comptroller, 13.
[Page 139]
Mr. Nicholson's Answer.
13. "This with the interest thereon from April, 1781, exceeds the balances in other certificates which they found against me; they however balance this by supposing it to arise from some mistake; candor and equal justice would have called for the same conclusion in those accounts where the balances were by them stated against me, until both were liquidated and settled, which is now proceeding in, and I hope will soon be done; but in the former case, what say the committee? He should pay these balances immediately!"
Report continued.
—which must arise from some mistake not yet discovered, probably from a greater number of certificates having been issued or renewed by the Auditors, than are entered in the books of issue, or from some mistake in the accounts of shilling money, or from some error in the amount of certificates delivered to the Register, which is taken from the Comptroller's books; the addition on the Register's own books not being yet completed and compared.
"THIRD HEAD.
"BY an Act passed the first of April, 1784, the Comptroller was directed, upon liquidation of the several accounts of the officers, soldiers and citizens of the state, to grant certificates to them, for the balances due to them respectively, and by an Act passed the 30th of March, 1785, which provided for similar certificat [...] being issued for claims against forfeited estates, it was also enacted, that all persons who had balances due by the state, upon the settlement of their several accounts, should be entitled to receive certificates as citizens of the state, (o).
—Those certificates were by the same acts, mentioned under the foregoing heads, made receivable [Page 140] in payment for lands, and their redemption was provided for by the same laws and in the same manner as depreciation certificates.
"Books of those certificates, issued, redeemed by the Land-Office, and renewed, have been kept by the Comptroller, which are similar to those kept for other kind of certificates, as mentioned under the foregoing heads. The committee were anxious to investigate whether those certificates had always issued upon proper principles, and for debts justly due, and whether they had always been granted to the parties thereto entitled. But as all the vouchers and receipts relative thereto, were, (as the Comptroller informed the committee) lodged with the commissioners appointed to settle the accounts of the individual states with the United States, it was thought better to defer the investigation, till after the 1st day of July, at which time the appointment of the commissioners expired. When that day came, however, the Comptroller informed the committee, that those papers were kept in the possession of the United States, both as vouchers of the claims of Pennsylvania, and as checks against future demands that might hereafter be made by individuals. The committee applied a few days after to the Secretary of the Treasury of the United States, for leave of having access to those vouchers— This was granted by the Secretary, (as will appear by his letter of the 17th of July) provided the examination was confined to the papers of the commonwealth, and not extended to any statements or remarks of the late commissioners; but it was at the same time requested that the inspection should be deferred till the return of Mr. Farrel, late clerk of the commissioners, who alone knew the disposition of the papers, and was then absent. Upon being informed of the return of Mr. Farrel, the committee wrote a second letter to the Secretary on the 5th of August. Orders were accordingly given to Mr. Farrel to attend the committee at any hour they thought convenient, and from the 13th of August, they had free access to all the papers they wanted; but the time being [Page 141] so short, prevented them from entering into the full investigation they intended (q), —and they examined only different parcels of accounts, taken from different species of debts, in order to form a general idea of the manner in which the business was transacted. As far as they examined, they found vouchers along with every account, and receipts for all the certificates issued, given either by the parties, their assignees, or attorneys (and then the assignments or powers of attorney are filed with the account) (p) —or by certain persons to whom the certificates were given to be by them delivered to the proper parties. This last mode (to wit, to deliver certificates to some persons who gave receipts for the same, and promised to distribute them to the parties) was adopted chiefly to facilitate the payment of militia companies. The total amount thus delivered is as per an annexed list £.91,987:8:2 ¼; books have been kept of the certificates delivered in that manner, in which each individual stands charged with the certificates by him received, and he is to be credited either by producing the receipt of the party, or by returning the certificates. The amount thus returned, and which on the 11th day of June past was in the possession of the Comptroller, is £.2,317:0:8. The Comptroller stands charged in the same books with an amount of £. 5,544:4:7, for which he made the certificates out, but has never issued them. Two lists including the numbers and sums of those certificates, and the names of the grantees, as given to the committee by the Comptroller, are hereunto annexed; and he is charged in his account with funded debt certificates, marked L, with the aggregate of those two sums (as having never been issued) amounting to £.7,861:5:3. Some measures should be taken to have those certificates [Page 142] dispos [...]d of; but whether they should be cancelled, or a limited time given to the parties to apply for the same, the committee will not pretend to say; in their opinion, the Comptroller should have rendered an account of them before this time. The balance of the above mentioned account L is not struck, the amount of the certificates delivered to the Register not being yet added, although the whole is delivered. By the general account of the state with the certificates of funded debt, marked K, it appears that the balance now outstanding, including the above mentioned sum of £.7,861:5:3, not yet issued is £.16,713:3:8 ¾.
"Besides the above mentioned books, there is a book of accounts of clothing, an abstract whereof is hereunto annexed. In those books each party is credited for the number of years, months and days he staid in the army, from the 1st of January, 1780, at the rate of £. 37:15 a year, for clothing due to him; and is charged with the articles of clothing received by him at the same average prices by which the rate of £.37:15 is computed.
"From an investigation of the transactions relative to that subject, it appears, That by a law passed the 1st day of March, 1780, certain officers by the Act specified, were promised during their continuance in actual service, one complete suit of clothes each, once in every year, and Council directed, from time to time, to purchase the same; that by the same law Council were also directed to purchase, for the use of the army, rum, sugar, coffee, and certain other enumerated articles, to be distributed amongst the officers and soldiers in certain proportions, and at certain prices by the Act prescribed; that in conformity to that law, large quantities of clothing and of the enumerated articles (then known by the name of "Army refreshments,") were purchased by Council and distributed amongst the troops by commissaries for that purpose appointed; that after the law, by which the depreciation of pay of the troops of the state was made up to them, had passed, the two [Page 143] provisions above mentioned were supposed to be virtually repealed, 14,
Mr. Nicholson's answer.
14. "This appears about as reasonable as that a law allowing mileage to members of Assembly should repeal the law allowing their daily wages."
Report continued.
—and Council ceased to purchase the clothing, and refreshments, and that in December, 1790, after the law had been dormant for ten years, 15,
Mr. Nicholson's answer.
15. "If the law had slept a century, still it was a law, and as such entitled to the same degree of respect with any other law; but the fact here is just the reverse of what is stated by the committee. In 1784 a number of officers' claims under this Act was presented to my office, and on the 1st of March, 1784, I reported in favor of their claim to the late Council. Instead of acting upon these claims, upon which the fate of a number similar was to depend: they are endorsed in the hand writing of John Dickinson, Esq then President of the Supreme Executive Council "postponed."
Report continued.
—some speculators who from the manner in which they made their purchases, seem to have received the best possible information on the subject, 16,
Mr. Nicholson's answer.
16. "The inuendo in this part of their report and the observations in another paragraph afterwards "that there were strong reasons to believe that one of the speculators had at least received his information from the Comptroller's office,"—at the same time that it excited my contempt for those of the committee who made it, called for some notice from me; in order therefore to understand what was meant thereby, I wrote the letter contained in the schedule marked (A.)
[Page 144] (A.)
"IN a printed copy of a report to the late House of Representatives, from a committee of whom you were one, is the following paragraph— For those reasons, and because there is strong reasons to believe, that one of the speculators had at least received his information from the Comptrollers' office, the committee are of opinion—&c.
"You will oblige me by informing, by a line, the name of the person above referred to—one of the speculators.
With great respect, &c. JOHN NICHOLSON."
BENJ. R. MORGAN, Esq
—and received the answer marked (B.)
(B.)
"I CAN have no hesitation in informing you, that the person alluded to in that part of the report of the committee of investigation, to which your letter refers, is Mr. Samuel Baird, formerly of Norris-town, in Montgomery county.
With great respect, &c. B. R. MORGAN."
JOHN NICHOLSON, Esq
—Finding in this answer that Samuel Baird, Esq was the person alluded to, I think it proper first to declare that this gentleman is one for whom I have long had a friendship, and of whose integrity I have an high estimation; some things are alledged against him in some of these purchases, and a suit is depending in which I shall be sorry if I shall be found to have been mistaken in his character.—After this I proceed to take a view of the situation of his purchases, and of this subject generally, first, I find that the number of claims of this class rendered amount to 366.
"Second, I find that of these, 66 were rendered by said Baird, of which two were for General and D. St. Clair, and were not claimed by him, but received by themselves respectively.
"Third, Although it required no official information to distinguish those gentlemen in the country, who had served as officers in the late army, so as to apply only to those who were entitled; yet we find, and the committee, [Page 145] from the books laid before them, had an opportunity to observe that of the 64 claims rendered by Saml. Baird, there were two, Christopher Gettig and Casper Wetzel's estate, who w [...]re not entitled to any emoluments from the said law. Had he been instructed in his purchases by me, I would have informed him of this; instead of which he gave them as much I believe as any others.
"Fourth. Another question whether he obtained previous information from me of the clothing received by the different officers, so as to ascertain the balances due, can best be refuted by a view of the facts. Of the 62 claims remaining as aforesaid, presented by him, the following persons had received such a quantity of clothing as to leave a balance due by them to the State on said account, viz.
Capt. James Vaugh, | £. 4 | 5 | 2 | due by him. |
Capt. Sam. Miller, | 19 | 8 | 9 | do. |
Capt. Wm. Gray, | 2 | 0 | 2 | do |
Of the officers some had more and some less due to them; yet I have been informed he gave a like sum for the risque of each; and that for the above who had nothing to receive, he gave as much as any—Does this look like the best possible information? does it look like any proper information at all?
"Fifth. Besides the above there is another proof in the account of Capt. Symonds, that I did not at least favor the claims of said Baird; this will appear from the proceedings on that account, which are detailed in the papers marked (C) in the schedule.
(C.)
"EXAMINED and settled the account of arrears of clothing of Capt. Jonas Simonds, and allowed £. 145:0:5.
"The above was also allowed by the Register-General, and sent to be approved by the Governor; before the latter had decided thereon.
"The same was re-settled as follows, viz.
"WHEREAS a claim was made, and account in due time rendered, by Samuel Baird, Esq attorney, for arrearages due to Capt. Jonas Simonds, as an officer of the late Pennsylvania line; which account has been settled, and allowed to amount of £. 145:0:5; and whereas, on a revision and re-examination of the same, and an investigation of the [Page 146] War-Office of the United States, into the date and nature of the commission of the said Jonas Simonds, it appears that he was in the army at the time, although he received no share of the clothing, when clothing was furnished to each Pennsylvania officer in 1779. That he was an officer in Col. Lamb's regiment of New-York artillery, and as such commissioned; that he was only draughted into the Pennsylvania regiment of artillery, where he did duty from the year 1781; and that in fact he was not a Pennsylvania officer: Therefore, in virtue of the powers and authorities in me vested by law, I do hereby review and re-settle the said account of the said Jonas Simonds, rendered by the said Baird, and settled as aforesaid, and the claim wrongfully so awarded do hereby annul, and the said claim of the said Baird is rejected, not being within the provisions of the Act allowing clothing by the state to certain officers."
"Of this adjudication, I informed Samuel Baird, the person by whom this claim had been exhibited.
"On the 2d of June, I received a letter from the Governor, in the following words:
"SIR,
Philadelphia, 2d June, 1791."
"IN consequence of your representation of the 23d of April last, I think it is proper, that the claim of Capt. Jonas Simonds, to the gratuitous allowance of clothing from Pennsylvania, should be re-considered: I have, therefore, transmitted to the Register-General, and to yourself, copies of the documents which Capt. Simonds has laid before me on the subject.
I am, &c. THOMAS MIFFLIN."
TO JOHN NICHOLSON, Comptroller-General.
"The inclosures were as follows, viz.
"SIR,
"Philadelphia, June 2d, 1791.
"I FIND, that after my account for arrearages of clothing had been made out by Mr. John Nicholson, examined by the Register, and approved of by his excellency the Governor—that a re-examination has taken place, by Mr. Nicholson, in which he states as an objection, that I was not a Pennsylvania officer, and therefore not entitled to any emolument from the state as such.
"In order to prove that my claim on the state is well founded, I beg leave to refer you to the act of Congress, bearing date the third day of October, 1780, the arrangement of the Pennsylvania line, a copy of which I have inclosed; also the different muster rolls, and returns of the artillery, belonging to this state.
"These are objects of a continental nature, and how far they are binding on the state, I submit.
"However, I was received into the regiment of artillery belonging to this state, in consequence of the above recited Act of Congress, and have been settled with as such, in every instance, except the clothing account.—Perhaps it will not be amiss to mention, that I commanded a [Page 147] company of artillery, in Col. John Lamb's regiment, that was raised in this state in seventy-nine, and received the stores given by the state of Pennsylvania, to the troops of her line, when in that regiment.
"I received the five months and a half pay from the state, when her line was dismissed the service; also my proportion of land, and my continental certificates, funded by this state—in fact, not a single demur has ever taken place, until the present.
"I beg you will lay my claim before the Governor.
I am, with respect, Your most obedt. humble servant, (Signed) J. SIMONDS."
"The above is a true extract from a letter addressed to the Secretary of the commonwealth, by Capt. Jonas Simonds.
(Signed) A. J. DALLAS, Secretary.
Secretary's-Office, Philadelphia, 2d June. 1791.
"IT appears from the records of the War-Office of the United States, that by the arrangement of the Pennsylvania line, dated Philadelphia, December 22d, 1782, signed by Arthur St. Clair, major general, and which arrangement was to take place on the 1st day of January, 1783, that Jonas Simonds was arranged the fourth captain in the corps of artillery, of which Andrew Porter was lieutenant-colonel commandant—That six captains of the same corps, to wit, Robert Coltman, Worsely Emes, James M'Clure, William Power, Thomas Douglas, and William Martin, were returned as officers who were to retire from service, upon the 1st of January, 1783, in consequence of the reform then to take place.
Given at the War-office of the United States, the 5th of May, 1791.
JOHN STAGG, Junior, Chief Clerk."
"On the seventh of June I received another letter from the Governor, and inclosure as follows:
"SIR,
Philadelphia, 7th June, 1791.
"I THINK it proper to transmit to you a copy of the Register-General's report, on a revision of the claim of Capt. Jonas Simonds; and as the last section of the Act, on which the claim is founded, refers the determination of any difficulty or doubt, concerning the persons entitled to the benefits and advantages granted by the legislature, to the executive authority, you will be pleased to furnish me with your report, as soon as you conveniently can, that I may be enabled, with full information, to decide on the present case. I am, &c.
TO JOHN NICHOLSON, Comptroller-General of Pennsylvania.
"SIR,
Register-General's Office, June 4th, 1791.
"IN obedience to your excellency's commands, I have revised Capt. Jonas Simonds' account for clothing, granted by virtue of an Act of the first of March, 1780, and find, that Capt. Jonas Simonds was commissioned [Page 148] by Congress, in September, 1778, as a Capt. of artillery, and attached to Col. Lamb's regiment.—That he commanded two of the four companies raised in Pennsylvania, late Lee and Jones'—that, by the arrangement that took place the first of January, 1781, under the Act of Congress of the third of October, 1780, he was called, with his company, to join the 4th Pennsylvania regiment of artillery, under the command of Col. Proctor—that he was mustered and returned as an officer of the Pennsylvania line, with Capt. Proctor, who commanded his own and Coran's company—that he received his pay from, and settled his accounts with the pay-master of said regiment—also received part of the stores, granted by the state to the officers belonging to her line; received his donation lands from, and funded his certificates with the state—that the 7th section of the Act, 1st March, 1780, directs, "That the offi [...] belonging to the troops of Pennsylvania, &c. shall be furnished with o [...] complete suit of regimental uniform clothes, &c." and in the twentieth section, in describing the troops entitled to the benefit of the Act, includes the companies late commanded by Lee and Jones.—And further, alluding to the officers and soldiers "who are, or shall be considered by the honorable Congress, as part of the quota of this state, &c." I also find, that the Act of Congress of the third of October, 1780, provides, that the regiments of artillery, as they now stand, be considered as belonging to the states respectively, to which they are, or may be assigned; which states shall complete them to the full complement, supply them with necessaries, and in every respect treat them as if raised therein.
"I am, therefore, of opinion, that Capt. Simonds is entitled to the benefit of the Act of the first of March, 1780; and that his account for arrearages of clothing should be allowed, as stated, amounting to one hundred and forty-five pounds and five pence.
To his excellency THOMAS MIFFLIN.
"Whereupon I wrote to the Governor, on the 7th of June, as follows, viz.
"SIR,
Comptroller-General's office, June 7, 1791.
"I WAS honored with your excellency's letter of the 2d instant, covering an extract of a letter from Capt. Jonas Simonds; and I have also received yours of this date, with the enclosure on the subject of the claim for the arrearages of clothing of the said Jonas Simonds, and, in obedience, I have reconsidered the said claim, and the reasons urged in support of it.
"If a recommendatory act of Congress was obligatory on the several states, unless adopted by those states, then would there be doubt the claim made for the arrearages of captain Simonds' clothing should be allowed, under the Act of Congress of October, 1780, as well as the claim of sundry officers in the regiment of cavalry, belonging to the line of this state, and others, in similar situation, whose accounts have been rejected; as well as many other claims, which this state have not agreed to, although recommended by Congress.
[Page 149]"If the having received state stores, as they were called, from this state, were the rule to determine the persons entitled to the benefits of the Act of March 1st, 1780, then would commissaries, forage masters, conductors of military stores, waggon-masters, and even the auditors of the main army have been entitled to arrearages of clothing, for each of these have received stores, as may be seen by the accounts thereof; indeed, there is one account raised by the officers who issued stores of this state, for detached artillery belonging to the state of New-York.
"I [...] to have been on the musters in the regiment to which he was annexed, and where he served, would substantiate this claim, the claims to clothing of the officers from Connecticut, Jersey, and Virginia, in the Pennsylvania regiment of cavalry, before mentioned, would have been well founded also. Indeed, I cannot conceive of his commanding a company in this regiment, to which he was attached, and being mustered at all, without being mustered where he served; these musters do not specify the state to which the officers respectively belonged. He was not commissioned as an officer of the Pennsylvania line, by his being attached to the Pennsylvania line; the Act of Congress aforesaid, (not of the state) allowed him to be treated in the same manner, &c.—to be like another, and to be that other, are different.
"If the having had his certificates funded with the state, would support the claim in question, then would generals Muhlenbergh and Neville, of the Virginia line; major James Moore, of the Delaware line; and other officers of the lines of different states, who had become citizens of Pennsylvania, and had their certificates loaned—been also entitled to arrears of clothing. Captain Simonds was a citizen of Pennsylvania, and as such entitled to have his certificates loaned.
"The observations, that he received a donation of land, and an advance of 5 ½ months pay, from the state, lose their force, where it is considered that was done through mistake; when I made the returns to Council, upon which these benefits were granted, I did not know capt. Simonds' situation; and the same mistake, at first, induced me to pass the account in question, where it would probably have remained, had not another officer represented it, who saw and complained that he could not get what was granted to another in a similar case.—The five and a half months pay is credited to Pennsylvania by the United States, and it hath been already stopped from captain Simonds.—Respecting the donation land, I have already addressed your excellency, in order that it may be recovered to the state.
"Although the state stores were issued without due regularity at first, yet after the Act of March 1st, 1780, I have examined, and do not find that any was issued from this state to captain Simonds: I have inclosed a number of weekly returns of that company, from which you will see, that the Pennsylvania officers only are included, and that this is left out; the one dated December 25th, 1780, after having been made out for the others, your excellency will observe, has had captain Simonds' name added in colonel Porter's hand, on the 31st of December, 1780, and his proportion of rations also carried out, and added to the other [Page 150] officers; but you will also observe, that although all this was done at the time to procure these stores for him, yet they could not be obtained, Why! he was not a Pennsylvania officer; and they were delivered only, as appears by the receipt on the back, to the other officers.
"And further, he did not receive his depreciation of pay from this state, but that to which he belonged.
"Moreover, when, according to the very act on which arrearages are now claimed, clothing was provided at the time, by the Council, for each person entitled, they directed a suit for each of the other officers of this company, and none for captain Simonds. If he was not entitled to clothing then, he could not be entitled to arrears therefor afterwards.
"On the whole, the further I have examined into, the more clearly I am of opinion that this claim is not agreeable to law.
I have the honor to be, Sir, &c. JOHN NICHOLSON."
His excellency THOMAS MIFFLIN, Governor of Pennsylvania.
"On the 17th of June I received a letter, and inclosure, from the Governor, as follows—by which this claim was admitted, contrary to my judgment—viz.
"GENTLEMEN,
Philad. 17th June, 1791.
"AS a doubt has arisen, upon the validity of the claim of captain Jonas Simonds, to the benefits and advantages granted to certain persons, in and by the eighth section of an Act of the General Assembly, entitled "An Act for the more effectual supply and honourable reward of the Pennsylvania troops, in the service of the United States of America," passed on the first day of March, 1780; I have required the opinion of the Attorney-General upon the subject; and in consideration thereof, and of the circumstances of the case, I am induced to believe, that the claimant was an officer within the meaning of the Legislature. In pursuance, therefore, of the authority to me by law given, I do adjudge and finally determine, that captain Jonas Simonds is entitled to all the benefits and advantages intended to be granted by the eighth section of the above recited Act; and you will proceed in the premises accordingly.
I am, Gentlemen, &c. THOMAS MIFFLIN."
TO JOHN NICHOLSON, Esq Comptroller-General; and JOHN DONALDSON, Esq Register-General of Pennsylvania.
"SIR,
June 15th, 1791, Arch-street.
"IN obedience to your commands, I have carefully examined the various documents transmitted to me, respecting the claim of captain Jonas Simonds; and upon comparing the facts therein stated, with various resolutions of Congress, and the Act of Assembly upon which his claim [Page 151] is founded, I am of opinion, that the claimant was an officer within the meaning of the said Act, and that he is entitled to all the benefits intended to be granted by the 8th section, to the officers of the Pennsylvania line, in the federal army.
I have the honour to be, &c. WM. BRADFORD."
His excellency THOMAS MIFFLIN, Esq Governor.
"Sixth. There remains another incontrovertible proof that I did not, "at least" favor Mr. Baird's claims. On an appeal to the Supreme court by a number of officers whose clothing accounts were settled on the same principles exactly as those brought forward by said Baird, in which they complained of my mode of settlement being unfavorable to them. They obtained by the decision of the Supreme court per schedule (D),
(D.)
Capt. Isaac Roach, v. The commonwealth of Pennsylvania.
Appeal from the settlement of accounts by the Comptroller and Register-General of Pennsylvania, to the Supreme Court.
"I Certify, that at a Supreme court held at Philadelphia, for the state of Pennsylvania, on the eleventh day of January last, before the honorable Thomas M'Kean, Esq doctor of laws, Chief Justice, and his associate justices, of the Supreme Court aforesaid, the above appeal was tried, and a verdict given, by a jury of the country, in favour of the the said Isaac Roach, for the sum of two hundred and ninety-eight pounds eight shillings and one penny, with interest from the first day of July, 1783, and six pence costs; subject however to the opinion of the court, in a case stated; and that at a Supreme Court held at Philadelphia, on the thirteenth day of April, instant, after the argument, the said court were of opinion, and gave their judgment accordingly—First, that the sum with which the plaintiff is charged, for the clothing he received, is to be considered as continental money, and that the specie value thereof, is all that is at present chargeable against him; and that a balance is due to the said Isaac Roach from the commonwealth, on the said thirteenth day of April, of principal and interest, on the said clothing account, of forty-seven pounds sixteen shillings and five pence half-penny—Secondly, that the said plaintiff is not entitled to any arrears of half pay; but that the certificate for five years full pay, ought to have been dated, and to bear interest from the 22d March, 1783; and that the plaintiff is therefore entitled to charge against the commonwealth the interest on the said certificate, from the 22d March, 1783, till the 1st July following, which, with interest thereon to this day, amounts to the further sum of twenty-eight pounds and eleven pence, making in the whole, the sum of seventy-five pounds seventeen shillings and four pence half-penny, in specie; and [Page 152] that the commonwealth pay the costs of the appeal, amounting to eleven pounds eleven shillings and six pence.
Witness my hand, this 24th day of April, 1793. EDWARD BURD, Prothon. Supreme Court."
To his excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
Capt. Nathan Boys, v. The commonwealth of Pennsylvania.
Similar appeal to the appeal of Isaac Roach.
"I Certify, that on a case stated similar to that of Isaac Roach aforesaid, the Supreme Court aforesaid were of opinion, and did adjudge, on the said thirteenth day of April, that there was due, on the same day, to the said Nathan Boys, on his clothing account, including interest, the sum of fifty-two pounds nineteen shillings and nine pence half-penny; and also a further sum of twenty-eight pounds and eleven pence, in specie, including interest, for his arrears of interest on his commutation money, from the 22d March, 1783, to the 1st July, 1783, and for the interest thereon, from that day to the said 13th day of April, 1793, amounting, in the whole, to the sum of eighty-one pounds and eight pence half-penny, in specie; and that the commonwealth pay the costs of said appeal, amounting to ten pounds three shillings and six pence.
Witness my hand, this 24th day of April, 1793.
EDWARD BURD. Prothon. Supreme Court."
To his excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
Dr. James Hutchinson v. The commonwealth of Pennsylvania.
Similar appeal to the appeal of Isaac Roach.
"I Certify, that on a case stated, similar to that of Isaac Roach aforesaid, the Supreme Court aforesaid, were of opinion, and did adjudge, on the said 13th day of April, that there was due, on the same day, to the said Dr. James Hutchinson, on his clothing account, the sum of sixty-seven pounds sixteen shillings and one penny three farthings, in specie, including interest; and also a further sum of fifty-one pounds ten shillings and one penny farthing, in specie, for his arrears of interest on his commutation money, from the 22d March, 1783, to the first day of July, 1783, and for the interest thereon, from that day to the 13th day of April, 1793, amounting in the whole, to the sum of one hundred and nineteen pounds six shillings and three pence; and that the commonwealth [Page 153] pay the costs of said appeal, amounting to ten pounds three shillings and six pence. Witness my hand, this 24th day of April, 1793
EDWARD BURD. Prothon. Supreme Court."
To his excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
Capt. Stephen Beasly, v. The commonwealth of Pennsylvania.
Similar appeal to the appeal of Isaac Roach.
"I Certify, that on a case stated, similar to that of Isaac Roach aforesaid, the Supreme court aforesaid were of opinion, and did adjudge on the said thirteenth day of April, that there was due, on the same day, to the said Capt. Stephen Beasly, on his clothing account, the balance of forty-seven pounds four shillings and seven pence half penny, in specie, including interest, and also a further sum of twenty-eight pounds and eleven pence, in specie, for his arrears of interest on his commutation money, from the 22d March, 1783, to the first day of July, 1783; and for interest thereon, from that day to the thirteenth day of April, 1793, amounting in the whole, to the sum of seventy-five pounds five shillings and six pence half-penny; and that the commonwealth pay the costs of said appeal, amounting to eight pounds six shillings.
Witness my hand, the 24th day of April, 1793.
EDWARD BURD. Prothon. Supreme Court."
To his excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
Capt. Henry Martin, v. The commonwealth of Pennsylvania.
Similar appeal to the appeal of Isaac Roach.
"I Certify, that on a case stated, similar to that of Isaac Roach aforesaid, the Supreme Court aforesaid were of opinion, and did adjudge, on the thirteenth day of April, 1793, that there was due, on that day, to captain Henry Martin, on his clothing account, a balance of forty-seven pounds four shillings and seven pence half penny, in specie, including interest; and also a further sum of twenty-eight pounds and eleven pence, in specie, for his arrears of interest on his commutation money, from the 22d March, 1783, to the 1st July, 1783, and for the interest thereon, from that day to the said [...] day of April, 1793; amounting in the whole, to the sum of sev [...]a [...]ive pounds five shillings and six pence half-penny; and further, that the commonwealth pay the costs of said appeal, amounting to eight pounds six shillings. Witness my hand, this 24th day of April, 1793.
EDWARD BURD, Prothon. Supreme Court."
To his excellenc [...] THOMAS MIFFIN, Esq [...]
[Page 154]
Dr. James Hutchinson, Administrator of Nicholas Fitzsimmons, v. The commonwealth of Pennsylv.
Similar appeal to the appeal of Isaac Roach.
"I Certify, that on a case stated, similar to that of Isaac Roach aforesaid, the Supreme Court aforesaid were of opinion, and did adjudge, on the thirteenth day of April, 1793, that there was due, on that day, to Dr. James Hutchinson, administrator of Nicholas Fitzsimmons, on the clothing account of the same Nicholas Fitzsimmons, a balance of fifty-four pounds six shillings and five pence half-penny, in specie, including interest; and also a further sum of seventeen pounds two shillings one penny farthing, in specie, so the arrears of interest on the commutation money of the said Nicholas Fitzsimmons, dece [...]sed, from the 22d March, 1783, to the 1st July, 1783, and for the interest thereon, from that day, to the said thirteenth of April, 1793; amounting in the whole, to the sum of seventy-one pounds eighteen shillings and six pence three farthings; and further, that the commonwealth pay the cost of said appeal, amounting to the sum of ten pounds three shillings and six pence.
Witness my hand, this 24th day of April, 1793.
(Signed) EDWARD BURD, Prothon. Supreme Court."
To his excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
about £, 50, each on an average more than they were allowed by my settlement. This sum multiplied by 59 claims of said Baird would have given him £. 2950 more than I allowed him, and the interest thereon from July 1st, 1783.*
Report continued.
—presented claims as attorneys and assignees of certain officers for the clothing due to them, [Page 155] that other officers, thereupon presented similar claims, whereupon certificates issued in their favour to the amount of £. 18,736:7:6 principal, with seven years and a half interest due upon the same.
"The committee are of opinion that the issuing of those certificates was unauthorised by law: 17.
Mr. Nicholson's Answer.
17. "To this I answer in general terms, that the Governor, the Register-General, and Comptroller-General all concurred in a contrary opinion. They all by their respective decisions on those several and respective accounts, on which they were by law called to act, declare the contrary—but the committee offer two reasons in support of their opinion.—
"1st. That the claim for clothing would range under none of the heads which the law gives those officers power to adjust. Whoever reads the law instituting the Comptroller-General's office, will need no other reply to this reason.
"2d. As to the mode of settlement, that is allowing these claims to be adjusted by the proper officers, yet they were not properly adjusted, they should have therein been charged with the army refreshments—here also the committee were unfortunate. On this account of army refreshments allowed at stipulated prices, but not received, almost every officer would also have had a balance to claim from the state, had they not been inhibited by a clause in the Act granting them, which declares, that no claim shall be made for back rations therein. Both these reasons are perfectly obviated by the decisions of the Supreme Court in the cases see schedule (D) aforesaid; for
"First, By the decisions of the same court, see Dallas's Reports, page 263, they determine that, "where the Comptroller-General has no jurisdiction originally, the Supreme Court on appeal from his decision can have none; but in the case of these clothing accounts they have had jurisdiction; therefore in those clothing accounts I had jurisdiction originally.
[Page 156]"Second, On the appeal, in the Supreme Court from my mode of settlement, which the committee say they suppose granted too much instead of lessening the balance due to the party it is augmented; and more is allowed by the Court where the committee would take away part of what I had already allowed.
"The opinion of the committee in favour of instituting a suit against me on the premises aforesaid, as expressed in the 3d, 4th and 5th lines of the 157th page, I pass over for the present, I shall take occasion to remark thereon when we come to the same idea again in their report, for it seems to have been a favourite idea, and is reiterated."
Report continued.
"1stly. Because altho' the officers might be entitled to clothing, it was only a claim which no officer of the commonwealth had a power to settle; for the law appointing the Comptroller, which by the 1st section thereof, gives him power to liquidate all claims against the commonwealth, and to judge of prices and charges in cases where the same have not been ascertained, expressly confines that power of liquidating and settling, and, of course, of judging of prices, to claims for services performed, monies advanced, or articles furnished by order of the legislative or executive powers; and under none of those heads could the claim for clothing be ranged.
"2dly. Because supposing the officers were entitled to clothing, and the power of liquidating their claims vested in any officers of government, yet they should have been charged not only with such articles of clothing as they had received, but also with the articles commonly called "Army refreshment," for which they had not paid; with which articles, it was in the power of the Comptroller to charge them, as the vouchers, receipts and books relative to them, and containing the account of the deliveries of the said articles were then in his possession, and are now with the other papers [Page 157] furnished by him, in support of the claims of Pennsylvania, to the late commissioners.
"For those reasons, and because there are strong reasons to believe that one of the speculators had, at least, received his information from the Comptroller's office, the committee are of opinion that a suit should be instituted against him for the recovery of the amount of the said certificates.
"FOURTH HEAD.
"Settlement of accounts generally.
"FROM the 13th April 1782, to the 28th of March 1789, the Comptroller had the sole power to settle all accounts either of persons having claims against, or indebted, to the commonwealth (the county treasurers. and collectors of taxes excepted till the 24th of March, 1786) and to recover all balances due by any persons; and he was also to keep clear and distinct accounts of the revenues and expenditures of the commonwealth. From the 28th of March, 1789, to this date the power of settling accounts has been in the hands of the Comptroller and Register altho' under different modifications, but the power of settling with the county treasurers and other revenue officers, was taken from the Comptroller by the Act of the 1st of April, 1790, and restored to him by the Act of the [...] 1791.
"So far as relates to the settlement of accounts of the revenue officers, the committee have not been furnished, although they applied for the same, with any accounts settled later than those printed in the second volume of public accounts published by the Comptroller. 18.
Mr. Nicholson's Answer.
18. "To this I answer, that all the accounts in the office settled, numbered and filed, were shewn to the committee, and submitted for their making such inspection of them as they chose; true they were not taken down out of the order in which they were placed, but this [Page 153] order was shewn them, and an alphabetical register thereof delivered to the committee, by which they might find the number and place on the files of any account they wanted—add to this at their request to have the accounts of the County Treasurers, selected, they were taken from those files, brought together and laid before them as far as I had settled them."
Report continued.
—But the Register-General has promised to furnish them with an account of the settlements made with, and the payments made by the several county treasurers since his appointment to office, which will also furnish the account of taxes due by the several counties, an account, however, which never can be finally settled and the arrearages recovered under the existing laws; owing chiefly to the exonerations not having been settled according to law, 19.
Mr. Nicholson's Answer.
19. "To this I answer that they have been made and and returned by th [...] commissioners; they have been credited the counties regularly as returned."
Report continued.
—to the divisions of counties since the assessments of taxes, 20.
Mr. Nicholson's Answer.
20. "This, indeed, creates some difficulty, but it is readily surmounted, as must be generally known."
Report continued.
—to the want of knowledge of the persons, or townships that are indebted, 21.
Mr. Nicholson's Answer.
21. "The amount due from each township is regularly stated, as may be seen on an inspection of the accounts of taxes, and the name of the collector is also known." I think they are mistaken in the three last matters.
Report continued.
—and to the impossibility, unless those are previously settled and known, of striking the balance due by each county.
[Page 159]"By the Acts of the 30th of September, 1789, the Comptroller was directed to furnish the Register with all the balances which on the 28th of March, 1789, were due to or from any person, between whom and the commonwealth accounts were depending. As all the accounts are not yet entered on the waste book, and the journal and ledger are not even carried so far as the waste books, that part of the law has not been carried into effect, for which the committee conceive that no proper excuse can be made as Clerks have these two years been allowed to that officer to any extent he pleased, 22.
Mr. Nicholson's Answer.
22. "The committee, perhaps, did not consider, or they would have added, that this unlimited permission extended not to Clerks, for the purposes of the office, generally, but only for one particular object thereof— and although I have employed twenty Clerks on our accounts with the United States, yet they were not allowed for other purposes; and the attention requisite from me to them, left the less for other duties."
Report continued.
—and his duties, chiefly since the exchange of New-Loan and Continental certificates has been nearly completed, have been greatly diminished. 23.
Mr. Nicholson's Answer.
23. "I expected, that from October, 1791, the duties of the office would be less oppressive, and reduced to a moderate attention; and from that time, on that account, I voluntarily relinquished a portion of my salary to the state. But whoever will take the trouble to look at the volumes of my diary, for a course of 12 months, will, I think, say that I have still, at least, sufficient."
Report continued.
—It is true that with most of the accounts and vouchers filed in the office, there is an abstract of the account digested in debit and credit, which is by itself a kind of waste book, and may be copied by any Clerk. From what has been [Page 160] said, it follows that none of those general books are kept in regard to time; but the accounts are numbered, filed, and entered, generally according to their number in the books.
"In many instances, the committee conceived the books of the office might have been kept in better order, and that a clearer general mode might have been adopted. The books relative to the depreciation debt are the most irregular; but upon the whole, the committee do not think themselves perfectly competent judges on that subject, 24.
Mr. Nicholson's Answer.
24. "Here at last, is a matter of opinion, in which we are perfectly agreed."
Report continued.
—and when it is considered that the business grew from time to time upon the officer as his duties increased, the want of a more perfect system that would have connected all his different transactions, and rendered a reference from the one to the other more easy, will not appear surprizing, to which consideration the committee will add that if all the duties of the Comptroller have not been equally well performed, the fault perhaps laid most with the Legislature, who had encreased both his duties and his powers, farther than any man was able to perform, and farther than any man should have been entrusted with.
"The committee mean in a few days to make an additional report relative to the business of Doctor Joseph Thompson, which has already been before the Legislature (but the papers relative to which they received only since the House met) and of a few other points of less importance, to which they will add sundry balances of accounts which the Register is to furnish them with, and which will rectify any mistakes that may be found in the annexed accounts; but before they conclude this report, they must give a short account of what has passed concerning the certificates and books of the late agents of [Page 161] the Pennsylvania line, an access to which the committee were refused by the Comptroller.
"By a resolution of Congress passed the 3d of November, 1783, it was, Resolved, That the Paymaster-General deposit in the hands of regimental Agents, the certificates for the arrears of pay due to the officers and soldiers of the respective lines, to be by them delivered to the individuals to whom they belong, or deposited for their benefit as the supreme executive of the state to which the respective Agents belong shall direct.
"By an arrangement which was rendered necessary on account of the dispersed situation of the Pennsylvania line, two agents for the whole line, (instead of regimental agents) to wit, Messrs. Bowen and Beatty were recommended by the officers of the line, approved of by Council, and their appointment confirmed by Congress. Those two agents proceeded to distribute the certificates according to the directions and under the regulations of Council, as by the annexed correspondence will appear. They, upon an occasion, sent their resignation to Council, and always conceived themselves to be officers responsible to the executive, and received £. 280:3:5 from the state for their expences.
"On the 8th of April, 1785, they wrote to Council, that having nearly completed that business they were ready to deposit the remaining certificates (together with their books and vouchers) as the supreme executive might direct, agreeable to the Resolve of Congress of November 3, 1783; Whereupon Council, on the same day ordered that they should be instructed to deliver the same to the Comptroller-General of the accounts of this commonwealth.
"The committee, by letter dated 24th June, 1793, requested the Comptroller to examine the books of the agents deposited with him, also the certificates still in his possession and to have an account of the amount delivered by him—To this the Comptroller answered on the 27th of the same month, that he considered himself as being accountable only to the United States, from [Page 162] whom he expected to receive a distinct compensation for these servic [...].
"The supposition of the Comptroller-General being at the same time an officer of the United States and of the State, was too absurd and unconstitutional to be admitted, and the committee rested satisfied with laying the fact before the Governor, mentioning at the same time that as the papers had been delivered according to resolutions of Congress, to such officer as the Executive of the State might direct, and without any intervention of the Legislature, it might be perhaps suggested that the officer then chosen was accountable only to the Executive and not to the Legislature; they concluded by saying that they had no doubt of the Governor taking effectual measures to compel the officer to render a full account of that transaction—But although the Governor gave him peremptory orders to submit those books, vouchers and certificates to the committee, and transmitted to him a copy of the opinion of the Attorney-General dated June 20th, 1793, (in which he gives his official opinion, that those books, certificates and vouchers were subject to the direction and controul of the Governor, and that he had a competent power to order the Comptroller to deliver them to whoever he pleased, and of course to direct that they should be submitted to the inspection of the committee) the Comptroller has persisted in his refusal—As it must be evident that the officers of the United States have no controul or power whatever over our own officers, and that these of course must account only to our own Executive who then will render an account of the same to the proper officers of the United States whenever required; no proper motive can be suggested that can justify the refusal of the Comptroller; and if every thing has been fairly transacted by him in that business, obstinacy must with him, on that occasion, have prevailed over a sense of his own interest and reputation. 25.
[Page 163]
Mr. Nicholson's Answer.
25 "First. This part of the report does not class with any of the heads under which they have, at the beginning of it, arranged the objects of their investigation. From this I wonder it did not occur to themselves, that they were travelling out of their road.
"Second, My reasons for not exhibiting them to the said committee, were, 1st, That they had nothing to do with them. 2d. That although the contrary was expected, I designed, and I think I have not been mistaken, that the examination even of that committee, should operate to my public advantage. To do this it was necessary that all the time remaining (for I did not see them until a good deal of it had elapsed) should be devoted to the objects of their appointment. 3d. I was then in hopes to have been able to have those accounts examined and fully settled, before the time of my trial, so as to have been able, publicly, to exhibit my quietus on those accounts, from those authorised to give it—to have submitted them elsewhere, would have interfered therewith, and put it out of my power. True it is, that although they were principally prepared, and a part rendered to and examined, and passed by the United States, yet the disease that put many of us to flight, interrupted and prevented the business. 4th. I will confess I had another motive for refusal, which was this, I found in some of these men a disposition to convert to the uses of this state, at the expence of the United States, property which did not belong to them: before the loan of the United States for state debt, closed, under the specious pretence of examining certain certificates, to find whether all was right, those who were most forward in this business, were in that, and cloaked under that resolution, from the view of the Legislature of this state, who, I think, would have spurned the idea, as well as from the knowledge of the United States, who would, if exposed, have, as they did in the instance of a similar attempt in another state, prevented it— actually subscribed to that loan open to individual creditors [Page 164] of states, only, certificates of state debt already redeemed by the state *.
—I did not think the attempt would be more unjustifiable, to have seized on this property of the United States, than the other, nor much more unlikely.
"I subjoin in the schedules, the paper marked (E.) which contains a copy of my letter of 27th June, 1793, to the committee;
(E.)
"Compt. General's office, June 27th, 1793.
"GENTLEMEN,
"HAVING yesterday completed all that appeared wanting on my part at our accounts with the U. States, before the commissioners, I have now more time to devote to your examinations according to your appointment. I have your letters of the 24th and 26th instant before me: and
"1st. That it was my wish to divest myself previous to the close of this examination, of all future responsibility as far as possible, that there may be no attempts to excite suspicions against me hereafter, and therefore have preferred delivering over to the Register-General, in case of the state certificates, and taking a credit for the amount receipted for, to your examining them and leaving them in my possession.
"2d. It was my wish also, not only to settle my accounts of the certificates of the army, and money which I have received from various persons for their pay; but to divest myself of the trouble and responsibility thereof in future: but it is proper I should settle with those empowered to do it, and quiet me. These I conceive to be the proper officers of the United States; and as the officers of the Treasury of the United States are now as convenient, the party may as well apply there in future, with all their claims, as with a part: and I therefore determined to deliver over to the United States, to whom they belong all the remaining property as aforesaid, not delivered out, on which I consulted and had the approbation of the Governor, and am now making up these accounts, and preparing accordingly, and they will be completed as soon as I can.
"3d. I cannot conceive how the delivery of these certificates could be deemed any part of my duty as Comptroller-General, it has no connection with any of the duties of that office. I have so considered it, I always designed and shall obtain a distinct compensation allowed by the United States.
"4th. I have been desired by the Secretary of the Treasury of the United States to account and settle as above, who represents that most of the agents have already so accounted, and is desirous that it should [Page 165] be done by all. I have informed him it shall be done, and that acting for Bowen and Beatty, I shall also settle all their said accounts in like manner with my own.
"5th. I have considered the inclosures of your letter of the 24th inst. none of which I had before seen, except so far as the Acts of Congress were recited, they rather confirm than alter my ideas on the subject. It appears that although the late Supreme Executive of this state were applied to for confirming the choice of the agents made by a meeting of Pennsylvania officers, they refused so to do, and not conceiving themselves authorized, they referred it to Congress either to confirm the appointment of those agents, or to appoint such other persons as they thought proper; and Congress, by their Act of the 4th May, 1784, did approve and confirm the choice of those agents made by the officers, whereby they were authorized to act.
I am, &c. JOHN NICHOLSON."
The Committee of the House of Representatives.
—that marked (F.) which contains a copy of my letter of 28th June, to the Governor;
(F.)
"SIR,
Compt. General's office, June 28th, 1793.
"YOUR excellency not having contemplated it as a subject in which any controversy would be involved, and having since more fully before you the question of the disposition of the unclaimed continental certificates in my hands, for the pay of the late army. I am desirous that in your consideration of this subject, no embarrassment should arise from the conversation which was had between us thereon, and therefore consider the case to be in the same situation, as though no such conversation had ever passed.
"Having thus premised, I observe,
"First. That I deem myself accountable to the United States, for the delivery of such certificates of this kind as I have issued, and for the balance which they may find unissued, that I am desired by them so to account, and that I am desirous to account without delay in such manner.
"2d. That if I even were accountable to the state, the subject does not come within the appointment of the present committee of the House of Representatives, it is certainly no part of my official duty as Compt. General, for the examination of which transactions they were appointed, and in the forwarding of which, I will afford them every aid in my power.
"I have taken advice on the subject, and have determined,
"1st. As to the balance of unclaimed certificates, situated as they are, I will hold them without depositing them with or accounting therefor to either the United States or this state, until a judicial determination shall decide to whom they ought to be delivered.
"2d. That I will as soon as I can, settle with the United States, for all [Page 166] the certificates and money I received of them, so as to fix what the balance aforesaid amounts to.
"3d. I will enter into an amicable suit for the purpose of deciding the first question, on this point I have the agreement of the United States by their proper officer, and I also request the concurrence of your excellency in behalf of the state.
I have the honour to be, &c. JOHN NICHOLSON."
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
—that marked (G.) which contains a copy of another letter from me to the Governor, in answer to one from him, enclosing the Attorney-General's opinion.
(G.)
SIR,
Compt. General's office, July 9th, 1793.
"ON the 3d inst. I received your excellency's letter of the 1st, covering the opinion of the Attorney-General of the 25th of June last; on this I have to observe,
"1st That this opinion is founded much on matters stated as a fact, which are not so, and which I should have been able to prove, had the matter been put on the issue I proposed.
"2d. That admitting the certificates deposited with Bowen and Beatty, or with Bowen and Rush, who acted for Beatty; or with myself who acted for them both, were to be considered in the same view as those deposited with regimental agents, and therefore within the Act of Congress of Nov. 3d, 1783, subjecting them to the order of the Supreme Executive of the state, that power extends only to enable the Supreme Executive to order them out of the hands of one person or persons, to be deposited in the hands of another person or persons, and declares for what purpose they shall be so deposited, that is to be delivered out by them to the party. But as to the settlement of the accounts, the thing I am anxious to have done, it gives no such power to the executives of the state.
"3d. All the books I received from major Bowen in behalf of the agents, together with the papers other than the certificates, consist of two large receipt books, orders and vouchers for the delivery of certificates. These are yet unsettled, and will until adjusted by the United States, to whom in their behalf I render them for that purpose, as they have desired, whereby the said account will be closed; the papers I have in this business are also vouchers, such as orders, and receipts for delivery of certificates, which receipts I have generally taken in the said agent's name, and which must (unless I settle with the agents) be adjusted also with the United States, before the same accounts can be closed, the latter I intend to have done; the other papers respecting the delivery of certificates received from Mr. Pierce, are of the same kind, and to be settled in the same way with the United States.
"4th. I have been desired by the United States so to settle, and a [Page 167] part of these accounts, with the certificates were rendered, and are now under the examination in the offices, and I presume my duty and honor both will be better pursued and preserved in this way, than in submitting them to those who have nothing to do with them, more than other persons, and by that means be prevented from obtaining a settlement in due time from those legally authorized to do it.
"5th. If the [...] examination of the accounts and settlement had been also committed to the Supreme Executives by the Acts of Congress of November 1783, (which was not done) yet still as in all that business, the said executives were merely constituted trustees, the agents would nevertheless be accountable to the United States, the principal at their pleasure. But the organization of the department of the accounts of the United States, by subsequent Acts of Congress, directs the channel in which all such accounts shall be rendered and settled; which will be observed by Sir,
Your excellency's, &c. JOHN NICHOLSON."
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
The paper marked (H.) is an extract from a letter of 25th September, 1793, from Thomas B. Bowen, addressed to me on this subject.
(H.)
"I REMEMBER, that when I deposited with you the remaining certificates, together with my vouchers for those I had delivered, I considered the latter as entrusted to your care on my behalf, as I by no means looked on you as authorized to give me a full discharge for continental property for which I had receipted to the commissioners of army accounts under Congress. I took from you, not a dischage of my agency—your authority under the state, nor even the state itself, having no such power—but merely an acknowledgment that I had deposited with you all the certificates for which I had not produced receipts for the delivery to the parties to whom they belonged.—How I considered these remaining certificates, which could not in idea be separated from the light in which I considered you, as my agent for settling the accounts of my agency must naturally appear."
Report continued.
"The committee submit the following resolutions:—
"Resolved, That the Attorney-General be directed to institute a suit against John Nicholson, Comptroller-General for the whole amount of the certificates issued to satisfy certain claims of clothing made in the name of sundry officers, including both the principal and the interest paid by the State. 26.
[Page 168]
Mr. Nicholson's Answer.
26. "To this my answer on the first impulse would be, let the suit be instituted and welcome; but on more mature reflection, I would observe, 1st. That I am not desirous on my own account of attending a suit, and supporting the expences of it. 2d. I do not wish that the state should be at unnecessary expence in maintaining one, especially as the cause hath been decided already, in the same court where this cause was proposed by the committee of the late House of Representatives to be brought—For as to jurisdiction, the Supreme Court have, as already mentioned, allowed it to have been in me, by assuming it themselves, in the cases of appeal which have been cited; and as to principles adopted at settlement, they have, at least, sanctioned mine, in favour of the state, by themselves, allowing more. One observation it is natural to make here: These accounts were acted on, and approved both by the Governor and Register-General. If the thing was wrong, the blame should be participated to them, respectively: yet we hear of no resolutions, for a suit against either the Governor or the Register-General. On this I leave candor itself to make reflection.
Report continued.
"Resolved, That a committee be appointed to prepare and bring in a bill to provide for the effectual and final settlement of the accounts of John Nicholson, Comptroller and Escheator General. 27.
Mr. Nicholson's Answer.
27. "The resolution to provide by a law for the settlement of my accounts, so far as respects Escheator-General, is nugatory; as such I am not an officer of account; no public money can pass thro' my hands, either for real or personal estates, escheated or otherwise. I have, therefore, no account as Escheator-General, to settle: As it intends my accounts as Comptroller-General, its design is either to create another office, or it is there also nugatory. By law, the Register-General, as directed by the Executive, hath the power to settle [Page 169] all the accounts of the Comptroller-General; and progress hath been, by him, made therein—However if it is designed to create an additional office, I have no objections to whoever may examine and settle my accounts; and no other to that plan, than, as it may encrease the public expence, which, as a citizen, I must contribute to pay.
Report continued.
"Resolved, That a committee be appointed to prepare and bring in a bill to provide for the settlement of the arrearages of taxes due by the several counties and to enforce the collection of the same. 28.
Mr. Nicholson's Answer.
28. "This third resolution, not applying, in any wise, to my case, I make no observation upon it.
"It only remains, therefore, for me to assure yourself, and the members of your honorable House, that I am, &c.
The Honorable GEORGE LATIMER, Speaker of the House of Representatives of Pennsylvania.
[Page 170]
Report continued.
ACCOUNT A. DR. The State of Pennsylvania in account with New-Loan debt. CR.1st. To amount of original certificates issued as examined by committee of Council £.1,937,885 15 3 | 1st. By amount redeemed by Land-office £. 118,470 6 6 |
2d. To error discovered since 60 0 0 | 2d. By amount re-exchanged as taken from the books of New-Loan certificates received back from the parties(a) 1,784,635 5 0 |
| 3d. By the difference between the amount of renewed certificates as reported by the committee of Council, and the true amount as rectified from the certificates themselves(b) 1,118 0 9 |
| Balance outstanding not yet re-exchanged(c) 33,722 3 0 |
£.1,937,945 15 3 | £. 1,937,945 15 3 |
[Page 171]
B. DR. John Nicholson in account with New-Loan certificates received by him. CR.To amount of certificates renewed for which he received at the time of renewals an equal amount of original certificates as taken from books of certificates renewed £. 478,349 15 11 | By total amount of certificates cancelled and delivered to the Register-General, the far greater part of which were delivered in the present month of August. £. 2,381,910 9 6 |
To amount of certificates redeemed by the Land-Office and delivered him by the Receiver-General 118,470 6 6 | |
To amount of certificates re-exchanged and by him received of parties in exchange for continental certificates returned to them, as taken from books of New-Loan certificates returned (See Account A.) 1,784,635 5 0 | |
Balance arising from some mistakes not yet discovered 455 2 1 | |
£.2,381,910 9 6 | £.2,381,910 9 6 |
[Page 172]
C. DR. John Nicholson his account with Continental certificates received upon loan. CR.Dolls. 90ths. | Dolls. 99ths. |
To amount of Continental certificates received as rectified by the committee of Council 5,172,881 50 | By differences between the amount of Continental certificates received on loan and the amount of original New-Loan certificates issued, arising, in part, from a number of Continental certificates received on sundry accounts by the Comptroller for the state, and entered on the books of Continental certificates received on loan, to wit— |
| By account A the amount of original New-Loan certificates issued as reported by Council and the error of 60l. rectified 1,937,945 15 3 |
| From which deduct the difference mentioned in the said account, head 3d, of credit 1,118 0 9 |
| Total amount of original New-Loan certificates £.1,936,827 14 6 |
[Page 173] | Equal to dollars 5,164,873 84 |
| Which deducted from amount of Continental certificates received as per contra 5,172,881 50 |
| 8,007 56 |
| For which dolls. 8,007 56/90 he is charged in his account D. |
| By New-Loan certificates redeemed by the Land-office, an amount equal to which he is charged in his account D, 118,470l. 6s. 6d. equal to 315,920 78 |
| By amount of certificates returned to parties, to wit— |
| Amount of books of Continental certificates returned Dr. Difference between the same and the books of New-Loan certificates received, and for which he must be credited, having delivered the same to the Register-General 4,759,027 30 |
| By amount of certificates yet in his possession and not exchanged 81,384 11 |
| Balance due by him 8,541 55 |
Dolls. 5,172,881 50 | Dolls. 5,172,881 50 |
[Page 174]
D. DR. John Nicholson his account with Continental certificates received for the State. CR.Dolls. 90ths. | Dolls. Cts. |
To Continental certificates redeemed by Land-Office 877,131 45 | By certificates delivered the Treasurer 1,093,183 67 |
To New-Loan do. redeemed by do. 315,920 78 | By error discovered on above 49 12 |
To difference between the amount of books of Continental certificates received on loan and the amount of books of New-Loan certificates issued, for which difference he is credited in his account of Continental certificates received on loan (See Account C) 8,007 56 | By stock transferred to do. to wit— Six per cent. stock | 73,772 61 | Deferred do. | 36,886 32 |
110,658 93 |
To certificates of Woods, | Dollars. | Scott and Thompson | 430 5 | To certificates of Wade | 5782 21 | To do. of Atlee | 533 77 |
6,746 13 | Balance due by him 3,914 41 |
Dolls. 1,207,806 12/90 — 13/100 | Dolls. 1,207,806 13 |
[Page 175]
E. DR. John Nicholson his account with interest upon New-Loan and Continental certificates. CR. | Dolls, Cts, |
To the interest paid upon certificates of New-Loan debt, for which he has received an equal amount in Indents or 3 per cent. stock as taken from the indorsements on the same, viz. | By amount of indents paid the United States in part of requisitions £. 82,678:0:6 equal 220,474 75 |
1st. 4 year's interest on certificates returned on exchange amounting to l.1,784,635 5 as per account B. £. 428,312 9 1 | By amount of interest due upon the certificates paid to the United States in payment of the Lake Erie tract 59,762 1 |
Deduct so much which appears to be wanting to complete the 4 years—about 2,000 0 0 | By amount of interest due upon the certificates delivered to the State Treasurer 460,925 63 |
426,312 9 1 | By Indents delivered to do. 843,851 33 |
2d. Interest paid on £. 118,470:6:6 redeemed by Land-Office as calculated by Register 15,725 15 0 | By Three per cent. Stock transferred to do. by Comptroller 68,487 9 |
£ 442,038 4 1 | By do. do. transferred by parties, in lieu of indents due by them upon exchange of New-Loan certificates 35,641 75 |
Dolls. 1,178,768 49 | By do. do. do. till February, 1793 1,868 80 |
| By do. do. arising from the subscription in trust for Sarah Caldwell and others 2,051 49 |
| All the above sums were paid before the appointment of the committee. |
[Page 176]To interest by him received on the Continental certificates corresponding with that part of the New-Loan debt yet outstanding, to wit:— | 1793, June 10. By three per cent. stock and indents paid the Treasurer 27,473 28 |
1st. Indents received by him on Continental certificates in his possession as examined by committee Dolls. 5,032 75 | By three per cent. stock bearing interest from 1793, assigned by parties in lieu of indents 1,563 63 |
2d. 4 year's interest he is accountable to the states on the balance of 8,541 55 deficient in his account of Continental certificates received on loan 2,049 86 | Balance for which the Comptroller must account 47,544 33/90 |
7,082 71 | |
To interest accrued upon the Continental and New-Loan certificates redeemed by Land-office till 31st of December, 1790 575,670 3 | |
To interest upon sundry other certificates, to wit— Woods, Thompson and Scott's | D. 212 22 | Atlee's | 232 43 | [Page 177]Wade's | 3,781 69 | Sundries given by officers as per account | 2,077 29 |
6,303 73 |
To arrearages of interest given up by parties upon the exchange of New-Loan certificates 879 34 | |
To interest upon the balance of D. 3,914 37 deficient in his account of continental certificates received for state—say 4 years 939 51 | |
Dolls. 1,769,644 11 | Dolls. 1,769,644 11/90 |
F. DR. Accounts of State-Treasurers in account with interest endorsed as paid on New-Loan certificates. CR.1793, January 1st. To so much charged in their accounts as having been paid to this date £. 461,730 0 11 | By so much paid upon New-Loan certificates re-exchanged as taken from endorsements £.426,312 9 10 |
| By do. upon do. redeemed by Land-office 15,725 15 0 |
| By four years interest supposed to have been paid on £. 33,722 3 balance of New-Loan certificates outstanding 8,093 6 4 |
| Balance deficient, either overcharged in the Treasurer's accounts or actually paid, but neglected to be endorsed on the certificates 11,598 9 9 |
£.461,730 0 11 | £.461,730 0 11 |
[Page 178]
G. DR. State of Pennsylvania in account with the late Pennsylvania line, &c. for depreciation of their pay. CR.To total amount of depreciation of the pay of the Pennsylvania line and others entitled to the same by laws or resolutions of the state—Amount unknown. | By shilling money paid upon re [...]ement of accounts by the Commissioners appointed for that purpose and others, to wit— |
| Paid by David Rittenhouse £.1,457 10 0 |
| Do. by Dean, Morris, and others 14,278 7 6 |
| Do. by Fowler and Amberson 5,514 13 8 |
| Do. by J. Stevenson 1,683 15 0 |
| Do. by John Nicholson, as Auditor 16,829 3 11 |
| Do. by John Nicholson, as Comptroller, to wit, To 11th Nov. 1782, | £. 13,312 12 8 | To 19th do. 1783, | 8,287 10 0 | To — 1787, | 6,669 4 1 |
28,299 6 9 |
| 68,062 16 10 |
| By certificates granted upon settlement, to wit, |
Issued by Auditors [Page 179] previous to the Comptroller's appointment to that office 380,952 18 7 ½ |
| Do. by John Nicholson, as Comptroller 122,717 7 8 |
| 503,670 6 3 ½ |
| By escheated to the commonwealth as per list annexed, furnished the Secretary of the commonwealth 42,293 4 4 ½ |
| £. 614,026 7 6 |
H. DR. State of Pennsylvania in account with Depreciation certificates. CR.To total amount of original certificates issued £.503,670 6 3 ½ | By so much paid in shilling money in part of the certificates, new ones having issued for the remainder, to wit— |
| Paid by Jas. Stephenson £. 29,379 14 2 |
| Do. by Fowler & Amberson 803 17 8 |
| Do. by John Nicholson, as Auditor 31,410 15 4 |
| [Page 180]Do. by John Nicholson, as Comptroller, to wit— To 11th Nov. 1782, | 5,308 15 0 | To 19th Nov. 1783, | 4,184 12 10 | To Nov. 1787, | 5,232 13 4 |
14,726 1 2 |
| 76,320 8 4 |
| By following certificates stopt by, or delivered to, the Comptroller— Christie's | 697 3 3 | * Ryan's | 545 12 6 | Forrest administ. for | 102 0 5 | Hardie | 261 2 0 |
1,605 18 2 |
| The certificate marked thus * may possibly be inducted under the next head. |
| By errors discovered and recovered by the Comptroller by taking the original certificates and issuing new ones to a less amount 5,051 12 1 ¾ |
| By certificates redeemed by the Land-office and delivered the Comptroller 116,916 0 10 ½ |
[Page 181] | By do. do. for forfeited estates and delivered do. 51,600 8 11 |
| By do. do. for do. do. 297 19 0 |
| By do. redeemed by Land-office delivered to Treasurer 28,309 9 1 |
| By do. do. for forfeited estates do. do. 298 3 4 |
| By do. subscribed to the loan of the United States for the funded part of which additional purparts were issued 175,495 16 5 |
By do. subscribed to do. and redeemed under Act of 10th April, 1792 17,698 15 8 ½ |
| By do. do. to do. and do. under Act of 9th Feb. 1793 1,810 3 4 |
| By do. redeemed (being unassumable) under Act of 10th April, 1792 22,239 14 8 |
| By do. do. (do.) under Act of 9th Feb. 1793 315 12 0 |
| 1793, March 1st. Balance outstanding 5,710 4 3 ¾ |
£. 503,670 6 3 ½ | £. 503,670 6 3 ½ |
The real balance is probably something larger on account of Ryan's certificate above mentioned, and of a sum of £. [...] which possibly has been credited twice in the account. The whole difference would be £.
[Page 182]
I. DR. John Nicholson in account with Depreciation certificates by him received. CR.To amount of certificates renewed (a) £.620,865 11 1 | By certificates renewed and charged to him per contra the original of which being lost and renewed by special resolutions were not received by him £. 2,833 14 4 |
To amount of shilling money paid in part of Depreciation certificates 76,320 8 4 | By amount cancelled and delivered the Register 875,375 7 0 ¼ |
To certificates stopt or delivered 1,605 18 2 | |
To errors discovered in settlement by Auditors 5,051 12 1 ¾ | |
To certificates redeemed by Land-office 116,916 0 10 ½ | |
To do. do. for forfeited estates 51,898 7 11 | |
Balance in favour of John Nicholson 5,551 2 10 | |
£. 878,209 1 4 ¼ | £. 878,209 1 4 ¼ |
[Page 183]
K. DR. State of Pennsylvania in account with certificates commonly called "Funded debt." CR.1792, April 4. To total amount issued £. 229,638 7 8 ¾ | By certificates redeemed by Land-office and delivered the Comptroller £. 24,394 9 6 |
| By do. received for militia fines by the Comptroller 868 13 8 |
| 1793, March 4. By certificates redeemed by Land-office and delivered the Treasurer 31,540 17 1 |
| 1791, Octob. 1. By do. subscribed to loan of United States, for which additional certificates called purparts were issued by State 71,108 17 6 |
| 1792, Aug. 1. By do. subscribed to do. & redeemed under Act of April 10th, 1792 10,136 10 10 |
| 1793, March 1. By do. do. to do. and redeemed under the Act of Feb. 9th, 1793 2,577 6 0 |
| 1793, Jan. 1. By do. redeemed (being unassumable) under Act of April 10th, 1792 71,284 8 8 |
| March 1. By do. do. (do.) under Act of Feb, 9th 1793 1,014 0 9 |
| Balance unredeemed 16,713 3 8 ¾ |
£.229,638 7 8 ¾ | £.229,638 7 8 ¾ |
[Page 184]Balance per contra 16,713 3 8 ¾ | By certificates in the possession of the Comptroller, to wit— 1793, June 10. Certificates never delivered out | 5,544 4 7 | Do. given to individuals to be by them delivered to the proper parties and by them returned | 2,317 0 8 |
7,861 5 3 |
| Balance actually in circulation 8,851 18 5 ¾ |
£ 16,713 3 8 ¾ | £ 16,713 3 8 ¾ |
Part of the above £. 8,851:18:5 ¾ (being issued for clothing and cavea [...]ed) are still in the hands of the Register-General.
L. DR. John Nicholson his account with certificates commonly called "Funded debt." CR.To certificates renewed £. 143,031 12 9 | By amount delivered to the Register not yet added, but the whole said to be delivered. |
To do. redeemed by Land-office 24,394 9 6 | |
To do. paid for militia fines 868 13 8 | |
To certificates not yet issued and in his possession 7,861 5 3 | |
£. 176,156 1 2 | |
Report concluded.
[Page 185]
SEPTEMBER 3.
THE additional articles of impeachment were read the second time—Major M'Connell appeared at the bar of the House, and being duly sworn, answered the following interrogatories.
Question by Mr. Gallatin. Have you been possessed of any New-Loan certificates in the year 1788?
Answer. I had a quantity of New-Loan certificates about that time, but at present cannot ascertain their amount or numbers.
By the same. Did you sell a certificate of that description amounting to £. 3275:19:4 to Blair M'Clenachan, if yea, please to tell at what time?
Ans. It appears from my book, that I delivered such a certificate to Mr. M'Clenachan, the 23d day April, 1788, which had been issued in my own name. I delivered him many New-Loan certificates about that time.
Ques. by Do. Do you know what he did with that certificate whose amount was £. 3275:19; 4, did he sell it, or did he exchange it?
Ans. Impossible for me to tell what Mr. M'Clenachan had done with it, the certificate was his own after he got it from me. I believe an exchange took place between him and the Comptroller-General, but in this I am not positive.
Question by Mr. Evans. Have you a list of the names of the persons to whom the certificates which you then had, were originally granted?
Ans. I have a book at home, in which I have entered their amounts, &c. but at this time I cannot be particular.
Ques. by Mr. Gallatin. Had you any other New-Loan certificate of the same amount issued in your name, about that time, before that time, or since that period?
[Page 186] Ans. Not likely that I should have another of the same amount in my own name, it is impossible for me to ascertain.
Question by Mr. Evans. Can you tell the number of that certificate, for £. 3275:19:4?
Ans. I cannot ascertain it, not having the No. of that one in my book.
Ques. by Mr. Gallatin. Can you ascertain the time when this certificate was issued, and whether it was an original one, or issued for a number of certificates, commonly called consolidating?
Ans. I am inclined to think it had been issued in exchange for others by the means last mentioned: but I am not certain as to that, nor to the time when issued.
Mr. Gallatin observed he had no more questions to ask, and that the witness might retire.
Ques. by Mr. Evans. Can you furnish us with a list of the names of the persons to whom issued, numbers, dates and amounts of the certificates which you delivered to Blair M'Clenachan about the time alluded to?
Ans. I have a book, from which I will extract such dates, numbers, and amount as far as I have entered them, and will transmit a list to the House as soon as possible.
After which the witness retired.
Whereupon it was resolved that the further consideration of the said additional articles of impeachment be postponed till the next day.
And the Speaker issued his summons to accelerate the attendance of Blair M,Clenachan to give testimony on these articles against Mr. Nicholson.
It was on motion, Ordered that Messrs. Morgan, Evans and Gallatin, the three managers, should procure attested documents from Mr. Thomas Smith, Commissioner of Loans, to answer the purposes of evidence on these articles against the Comptroller.
The committee got no documents from him, at that time, he was in the country for fear of the yellow fever [Page 187] which then raged in the city, and carried off about 18 persons per day.
Three gentlemen, were appointed a committee by the Senate on the 2d to confer with a committee from the House of Representatives on the expediency of an adjournment of the Legislature.
The House of Representatives appointed five members to join the committee of the Senate.
SEPTEMBER 4.
THE committee appointed to confer with a committee of the Senate on the expediency of an adjournment of the Legislature, made report; which was read, as follows, viz.
That in the conference held by your committee with the committee of the Senate, they declared that they did not conceive that the House of Representatives would be ready to take a question upon the expediency of an adjournment until they knew what time was fixed by the Senate for the trial of the charges brought by the House against John Nicholson, Comptroller-General—Your committee thought it their duty also to mention, that although the House could not controul the decision of the Senate on that point, yet, they knew, they were ready at any time to support the charges and desirous that the trial should come on immediately, to which they added several reasons to urge the propriety of a decision on that business taking place at this session of the Legislature.
Your committee submit the following resolution—
Resolved, That the Senate be requsted to fix the time at which they mean to try the charges brought by the House of Representatives against John Nicholson, Comptroller General, and to give notice thereof to the House.
Ordered to lie on the table.
Mr. Edie, a committee from the Senate, being introduced, presented to the chair an Extract from the [Page 188] Journal of that House; and having withdrawn, the same was read, as follows, viz.
"In SENATE, TUESDAY, September 3, 1793.
"On motion of Mr. Morris, seconded by Mr. Thomas,
"Resolved, That the Legislature will rise to-morrow. And
"Ordered, That Mr. Edie be a committee to present the foregoing Resolution to the House of Representatives for concurrence.
Extract from the Journal, TIMOTHY MATLACK, Clerk of the Senate."
The committee of accounts reported, a resolution, that a warrant be drawn in favour of Benjamin R. Morgan for 492 dollars and 75 cents, being a balance due the committee of investigation for their services and expences.
Agreeably to the order of the day the additional articles were read the third time and adopted, and it was ordered that they should be engrossed and signed by the Speaker.
Mr. Blair M'Clenachan having been summoned previous to the third instant, when Mr. M'Connell gave his evidence, and not appearing, a motion had been made to compel his attendance by an attachment, whereupon some argument had ensued, and it was conceded, that he did not absent himself thro' contumacy, but through a belief and expectation that the General Assembly had adjourned on account of the disorder, consequently no further notice had been taken of his non-attendance.
He appeared this day, and had been sworn.
Question by Mr. Evans. Did you purchase or receive any New-Loan certificates from Matthew M'Connell?
Answer. I did, to a great amount.
Ques. by ditto. To what amount were any of these certificates, or do you recollect any New-Loan certificate [Page 189] received from him to be for the sum of 3 [...] 19s. 4d.?
Ans. I remember to have had several.
Ques. Has there been any such in your name, or in the name of Mr. M'Connell?
Ans. My name! Mr. M'Connell's name!
Here the witness appeared somewhat embarrassed, not knowing the drift of the question.
Mr. Gallatin rose, and said he would put the witness right, saying, "I will mention a circumstance, Do you remember that a large New-Loan certificate had been issued about the time alluded to, for the sum of £. 5000 or thereabouts; that the said certificate had been cancelled the next day, and two certificates issued in lieu thereof, the aggregate amount of which was £. 5000, as aforesaid; that one of these certificates had been for £. 3275:19:4, and the other for the balance, do you remember any of these circumstances?"
Ans. I perfectly recollect that circumstance, and that I purchased the larger certificate, which was for 3275l. 19s. 4d, I believe.
Question by Mr. Evans. Did you at any time sell that certificate, or any other of the same kind?
Ans. Not to my knowledge, I do not remember.
Question by Mr. Gallatin. Do you remember to have sold that large certificate at any time, or to have exchanged it; if you have, please to tell to whom, and what did you receive for the same?
Ans. I delivered it to the Comptroller-General to get an equivalent in continental certificates, as well as I can remember;—
Question by Mr. Hare. At what time did this transaction take place?
Before the witness had time to answer this question, Mr. Gallatin said he would mention a circumstance which probably would put the witness right, and observed by saying, "Do you recollect having certificates which were issued between the 1st of Sept. 1777 and 1st March, 1778, and that the holders were displeased at [Page 190] parting from these certificates on the same terms, and conditions as they parted from the New-Loan certificates?"
Ans. I perfectly recollect that circumstance, and that I did not part from those certificates, of which I had been possessed, when I exchanged my New-Loans.
Ques. by Mr. Gallatin. When Mr. M'Clenachan had subscribed the New-Loan certificates, did he, or did he not subscribe those which had been issued between the 1st September 1777, and the 1st of March 1778?
Ans. No, I kept them to the last.
Ques. by ditto. Did Mr. M'Clenachan receive an equivalent in continental certificates from the Comptroller for the last described certificate for £. 3275:19:4, or did he (Mr. M'Clenachan) subscribe it in his own name to the Loan of the United States?
Ans. I received an equivalent in continental certificates, as well as I can recollect, for all that I brought to the Comptroller's office.
Ques. by Mr. Hare. Can Mr. M'Clenachan ascertain the time when this transaction happened?
Ans. A short time before the Loan was closed.
Ques. by Mr. Forrest. Did Mr. M'Clenachan sell any certificates to the Comptroller-General, or to any other person?
Ans. I never sold any, I delivered all that I had to the Comptroller-General, and received continental certificates in lieu of of them.
Retired.
After the foregoing ceremony of adopting the two additional articles, the report of the joint committee on the subject of adjournment was read the second time, and Resolved, that the Senate be requested to fix the time at which they mean to try the charges brought by the House of Representatives against the Comptroller, and to give notice thereof to the House.
A letter from Mr. Matthew M'Connell was presented to the chair, the reading of its enclosure dispensed with, [Page 191] and it was referred to the committee appointed to manage the trial against Mr. Nicholson.
The enclosure was a list of New-Loan certificates delivered by him to Mr. M'Clenachan, in the years 1788 and 1789, amounting in the whole to £. 16035:11:5.
An improper statement of Mr. M'Connell's evidence appearing in one of the daily papers, he wrote the following letter to the printer which was published in the same paper.
Philadelphia, Sept. 4, 1793.
"MR. DUNLAP,
"I AM sorry to find myself under the necessity of contradicting a statement in your paper of this morning of the evidence said to be given by me before the House of Representatives yesterday on "the subject of the Comptroller-General's accounts." The statement says, That my Testimony went to prove, that I had sold a certificate for upwards of ten thousand dollars, to Mr. Blair M'Clenachan, which afterwards appeared to have been negociated by the Comptroller-General in some manner that was not strictly agreeable to the literal meaning of the law."
"A regard for truth obliges me to say, that my evidence went no farther, than that I had delivered certain New-Loan certificates to Mr. M'Clenachan, in the year 1788.
The two additional articles were brought in engrossed, were compared at the table, signed by the Speaker, and sent to the Senate by five members; one of this committee addressed the Senate in the same words as those published page 108.
Captain Duncan, the chief Clerk in Mr. Nicholson's office wrote the following letter.
"HAVING been present in your honorable House when the late resolution passed, respecting the Comptroller-General, citing him to appear [...] &c. I beg [Page 192] leave to inform the House that Mr. Nicholson is out of town with his family, but should there be a necessity for his appearance to take trial, I will undertake to to say, that an express shall bring him here in a few hours. I am, &c.
The Hon. SAMUEL POWELL, Esq Speaker of the Senate.
SEPTEMBER 5.
THE Speaker drew a warrant for 300 dollars in favour of Mr. Morgan, to be paid as retaining fees to Messrs. Wilcocks, Rawle, and Ingersoll, as Counsel for the State on the impeachment of the Comptroller-General.
The Clerk of the Senate being introduced, presented to the chair certain extracts from the Journal of that House; and having withdrawn, the same were read, as follow, viz.
"In SENATE. WEDNESDAY, September 4, 1793.
"On motion of Mr. Morris, seconded by Mr. Hanna,
"Resolved, That John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, do appear at the bar of the Senate forthwith, to make answer to certain articles of accusation and impeachment, exhibited against him by the House of Representives.
"Ordered, That the Sergeant-at-Arms do forthwith serve John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, with a certified copy of the foregoing resolution.
"Frederick Snider, Sergeant-at-arms, on the resolution given in charge to him as aforesaid makes return in the words following, to wit—
"A Copy of the within resolution of the Senate I have delivered to Eleanor Baltzner, servant, at the house of [Page 193] John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, this afternoon, he the said John Nicholson, not being to be found.
So answers, FREDERICK SNIDER, Sergeant-at-Arms"
Wednesday, September 4, 1793.
"Moved by Mr. Morris, seconded by Mr. Thomas,
"Whereas it appears from the return of the Serjeant-at-Arms of the Senate to their order, for the appearance of John Nicholson, at the bar of the Senate, that the said John Nicholson, is not to be found—And whereas the absence and indisposition of many of the members of the Senate, and the anxiety and alarm occasioned by the existence of a malignant and infectious fever in this city, render it inexpedient to use any further process on the articles of impeachment exhibited against John Nicholson, Comptroller-General of the commonwealth, during the present session; therefore,
"Resolved, That any further process or proceeding therein be postponed to the next session of the Legislature.
The question being put, was carried in the affirmative.
Extract from the Journal, T. MATLACK, Clerk of the Senate."
The Legislature adjourned sine die.
DECEMBER 3, 1793.
THE Legislature met according to the provision for that purpose in the Constitution.
DECEMBER 5.
MR. Nicholson wrote the following letter to the Senate:—
[Page 194]
"I LEFT the city with my family on the 31st August last on account of the late malignant disease in Philadelphia, and returned to the neighbourhood of it without venturing in, but had employed an Express to be sent out to me, that I might attend if wanted to appear before your honorable House. Mr. Duncan's letter on this subject read in Senate the 4th Sept. and the postponement of the business on the same day, prevented my being sent for, and appearing as directed by the resolution of that date—I beg leave to inform the honorable House, that I am now ready to appear and answer to the Articles of Impeachment when it may please the Senate. I am, &c.
The Hon. ANTHONY MORRIS, Esq Speaker of the Senate of Pennsylvania.
DECEMBER 14.
THE lower House resolved to take into consideration the state in which the Impeachment of John Nicholson, was left at the close of the late session.
DECEMBER 20.
AGREEABLY to the order of the day, the House resolved itself into a committee of the whole, in order to take into consideration the Resolution proposed by Mr. Evans, seconded by Mr. Tyson, relative to the impeachment of John Nicholson, Comptroller-General, by the late House of Representatives.
Mr. Speaker left the chair, and Mr. Wynkoop was placed therein.
After some time spent in the business,
The Chairman left the chair and the Speaker resumed it.
[Page 195]The Chairman then reported a Resolution, which was read,
And on motion, and by special order, the same was read the second time, and adopted, as follows, viz.
Resolved, That it appears that the impeachment by, and in the name of the House of Representatives, and in the name of the People of Pennsylvania, for sundry High Misdemeanors, is now depending against John Nicholson, Comptroller-General of this commonwealth.
On motion of Mr. Swanwick, seconded by Mr. Evans,
Resolved, That managers be appointed on the part of this House to conduct the prosecution of the impeachment of John Nicholson, Comptroller-General of this commonwealth.
Ordered, That Mr. Swanwick, Mr. B. Morgan, Mr. M'Lene, Mr. Evans, and Mr. Bowman be a committee for that purpose.
On motion of Mr. Evans, seconded by Mr. J. Shoemaker,
Resolved, That the Attorney-General and such other counsel as the managers may think proper, be requested to give their attendance at the trial aforesaid, and assist thereat on behalf of the House of Representatives.
DECEMBER 24.
THE committee appointed to manage the trial were authorised to send for persons and papers, and to examine witnesses upon oath or affirmation.
JANUARY 9, 1794.
MR. Nicholson's long letter was presented to the Speaker of the House of Representatives—which see from page 111 to page 169, mixt with the Report of the Committee of Investigation.
[Page 196]Agreeably to notice given him, he came to the Senate at a quarter of an hour before noon, the Speaker informed the Senate that the hour was approaching when it should be necessary for him to direct the Sergeant-at-Arms to acquaint John Nicholson, Esq Comptroller-General of the commonwealth that he should appear before the Senate to answer the charges or articles of impeachment exhibited against him by the late House of Representatives.
A motion was made by Mr. Hoge, seconded by Mr. Kennedy, that the Senate should adjourn their Legislative business, in order to assume their judicial capacity, some authorities were cited to establish this on the same footing as the British house of lords adjourn from the Parliament-house to Westminster hall to sit in their judicial capacities on similar occasions. Messrs. Bingham and Smith were against that mode, the latter said he hoped the Senate would not adjourn, for he observed that if they should adjourn, there would be no Senate: Mr. Hoge's motion was put and negatived.
Mr. Bingham then moved that the Sergeant-at-Arms be directed to notify Mr. Nicholson to walk in. The motion was agreed to, the Comptroller walked in, being unattended by any person, bowing to the chair, and then to the persons on the right hand, and on the left.
A table covered with green cloth, and a chair was placed in the middle of the Senate-chamber opposite the Speaker's chair, to which Mr. Nicholson was shewn by one of the gentlemen of that body, and he was desired by Mr. Bingham to sit down; the Clerk of the Senate read the articles of impeachment together with a resolution of the House of Representatives respecting an error in the said articles—The ceremony of reading these documents, being over, Mr. Nicholson rose from his seat, and the Speaker asked him "what he had to say." Mr. Nicholson answered, "that he wanted a copy of the articles, and time to put in his answer to them." Mr. Nicholson was requested to repeat his demand, [Page 197] for the Speaker and other Members did not hear him, a sudden motion of feet in the gallery preventing them: Mr. Nicholson in [...] voice considerably raised, repeated his request.
Whereupon the Speaker desired him to mention his time.
Mr. Nicholson answered, and said, "that to indulge his own feelings he should mention a very short day, but unfortunately for him his counsel were engaged in the Supreme Court, now in session; that the Attorneys on the opposite side were likewise engaged in the same court, but that he required only till Wednesday (the fifteenth) next to put in his answer."
Mr. Bingham moved that Mr. Nicholson be permitted to withdraw whilst the Senate were deliberating on the question. The motion was agreed to Mr. Nicholson withdrew on being told by the Speaker that he might do so.
Mr. Kennedy remarked, that altho' he was for the adjournment, he was against mentioning any thing respecting the last vote, i. e. granting Mr. Nicholson permission to withdraw, for he looked upon that as very improper, inasmuch as that officer enjoyed every privilege of going where, and of doing what he pleased, he therefore hoped that no mention would be made of it on the Journal of the House; a suspension from office being all that the Sena [...]e had their power.
Mr. Speaker put the question whether the Senate were agreed to allow Mr. Nicholson his request; and they were unanimous in their assent.
Mr. Bingham moved that the Sergeant-at-Arms be directed to request him to walk in, and to hear the determination of the Senate. This motion was agreed to, Mr. Nicholson appeared, and the Speaker informed him that his request was granted by the Senate.
After which Mr. Nicholson withdrew. The whole time occupied in this ceremony did not exceed 45 minutes, during the time that officer stood this sudden, and novel shock with firmness and propriety.
[Page 198]
JANUARY 15.
MR. Nicholson, attended by two of his Counsel, at the hour of twelve, went to the Senate, put in his answer to the articles of impeachment, and named his Attorneys; whereupon Wednesday the 19th February, was appointed by the Senate for trying the charges.
On motion of Mr. Evans, of the House of Representatives, seconded by Mr. Tyson, and read, as follows, viz.
Resolved, That the committee, or any member thereof, to whom was referred the report of the committee appointed to examine during the recess of the late House of Representatives, the accounts and official transactions of the Comptroller-General, shall have power to examine at all seasonable hours, all the books, accounts, vouchers, certificates, and official documents whatever, which may be in the custody of the said Comptroller-General, the Register-General, or the State-Treasurer; to take copies of the same or any part thereof, and to require any explanation concerning the same.
FEBRUARY 5.
THE House of Representatives agreed to a replication to the answer of the Comptroller, to the articles of impeachment, and appointed a committee of five members to present the same to the Senate.
FEBRUARY 15.
The committee of accounts of the House of Representatives, reported 100 dollars to be due to the Door-keeper of the committee of investigation for attending [Page 199] on them during the recess, a small sum for their newspapers, stationary, &c.
Six hundred dollars were voted to be given to the three Attorneys concerned in managing the prosecution against the Comptroller-General.
FEBRUARY 19.
THIS being the day appointed for the trial of the Comptroller. The same came on in the Senate-chamber, and was postponed to the 26th; in consequence of a letter signed by William Lewis and Jared Ingersoll, Esqrs. and directed to the Speaker of the Senate, requesting a postponement of the trial on account of court business.
The House of Representatives appointed a committee of five members to prepare and report such rules, as in their opinion, ought to be observed, in conducting the trial of the articles of impeachment against the Comptroller-General, and then depending before the Senate.
FEBRUARY 20.
THEY resolved to hire an additional Attorney.
FEBRUARY 25.
THE committee appointed to manage on the part of this House the prosecution of the trial of the articles of impeachment against John Nicholson, reported, That the Senate postponed the trial of the said articles from Wednesday the nineteenth instant until Wednesday the twenty-sixth instant.
The committee appointed for the purpose, February 19th instant, made report; which was read,
[Page 200]And on motion and by special order, the same was read the second time, and adopted, as follows, viz.
The committee appointed to prepare and report rules to be observed on the part of this House, on the trial of the articles of impeachment against John Nicholson, now depending before the Senate, do agree to the following resolutions for consideration and adoption of the House.
Resolved, That the House of Representatives will set at such time and times as the Senate may fix, for proceeding upon the trial of the articles of the impeachment of John Nicholson, resolve itself into a committee of the whole House, and in that capacity attend in the Senate-chamber during the said trial.
Resolved, That the committee appointed to manage the said trial on the part of this House, do report from time to time the progress that shall be made therein, and the final determination of the Senate thereon.
IN the morning of Wednesday the 26th February, the House of Representatives of the commonwealth of Pennsylvania met pursuant to adjournment: the following letter was presented to the Speaker.
"Comptroller-General's Office, Feb. 25, 1794.
"SIR,
"BY a resolution of the late House of Representatives of Pennsylvania, of the 9th of April 1793, it was agreed, that I should at my request be furnished with copies of such of the papers therein referred to as I should desire; a part then requested and which hath been since repeated, have not yet been furnished. I pray that the present House would direct that it should be done.
"Also that I be furnished with a copy of the depositions or interrogatories of John Oldden, Matthew M'Connell, and Blair M'Clenachan, who, I find gave testimony [Page 201] before the late House on the subject of my impeachment. With great respect, &c.
The Hon. GEO. LATIMER, Esq Speaker of the House of Representatives of Pennsylvania.
The Clerk then informed the House that he had furnished the Comptroller-General with copies of such papers as were in his possession, and some of those papers alluded to in the Comptroller-General's letter, were presented to the committee appointed to manage his trial before the Senate, and consequently were not in the power of the Clerk of this House.
A motion was made by Mr. Bowman, seconded by Mr. Kelly, and adopted, as follows, viz.
Resolved, That the Speaker be authorised to draw a warrant for three hundred dollars in favor of Samuel Dexter, Esquire, employed as Counsel on behalf of the commonwealth, to assist in the prosecution and trial of the impeachment of John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, now depending before the Senate; whereupon,
The Speaker signed a warrant for three hundred dollars in favor of the said Samuel Dexter, Esquire, MEMBER OF CONGRESS FROM MASSACHUSETTS.
At a quarter before 12 o'clock the Senate ordered their Sergeant to call the court, which he did by reading the following words—
"O yes! O yes! O yes! Whereas charges of high misdemeanors have been exhibited by the House of Representatives of the commonwealth of Pennsylvania, in the name of themselves, and of the people of Pennsylvania, against John Nicholson, Comptroller-General of said commonwealth; all persons concerned may give their attendance and they shall be heard."
The members of the House of Representatives attended; Mr. Nicholson and his Counsel, Messrs. Lewis, Bradford, Tilghman, Higginson and Gibson were seated [Page 202] on the west side of a great table which was placed in the middle of the hall. The managers and their Counsel, Messrs. Wilcocks, Rawle, Ingersoll and Dexter took the east side of the said table.
The Speaker and members of the Senate were seated on the south side of the room, and looked to the north, their seats having been raised and brought into a narrower compass for the purpose of making room for the members of the lower House, and for spectators of respectability who might attend.
The Speaker addressed Mr. Nicholson, and informed him, that every indulgence in the power of the Senate should be granted to him, and to his Counsel, that the Secretary should issue subpoenas for witnesses, give him copies of any papers in possession of the Senate, and allow him any other privilege not incompatible with the nature of the misdemeanors wherewith he stood charged.
Mr. Nicholson bowed to him, and sat down to write.
The Secretary of the Senate read the following
"Articles of accusation and impeachment for high misdemeanors against John Nicholson, Comptroller-General of the commonwealth of Pennsylvania, by the House of Representatives of the said commonwealth, in their name, and in the name of the People of Pennsylvania, exhibited to the Senate thereof.
"Article I. THAT, by an Act of the General Assembly of this commonwealth, passed on the twenty-seventh day of March, in the year 1789, entitled "An Act to repeal so much of any Act or Acts of Assembly of this commonwealth, as directs the payment of the New-Loan debt, or the interest thereof, beyond the first day of April next, and for other purposes therein mentioned," it was, among other things declared and enacted, That so much of every Act or Acts of General Assembly as directed or secured the payment of the principal sum or sums mentioned in certain certificates, commonly called New-Loan certificates (which had [Page 203] been issued in pursuance of a preceding Act, passed on the first day of March, 1786) or the interest thereof, beyond the term of four years, should be thenceforth repealed and made null and void; thereby rendering the said certificates no longer a debt, or evidence of a debt, due and owing from the state of Pennsylvania: But, nevertheless, John Nicholson, the Comptroller-General of this commonwealth, to promote and procure his own emolument, under the colour of his office, pretending as well to facilitate the execution of certain Acts of Congress hereinafter mentioned, touching a loan proposed by the United States to the creditors of the respective states, as to carry into effect a certain Act of the General Assembly of this commonwealth, hereinafter also mentioned, touching the redemption of certain debts due and owing from state of Pennsylvania, did, at various times, after the passing of the said Act of the sixth day of March, 1789, to wit, between the tenth day of April, 1792, and the first day of August, 1792, recognize, certify, and declare the said certificates, commonly called New-Loan certificates, to be subscribable, as debts due and owing by the state of Pennsylvania, to a certain loan, opened and proposed, on the part of the United States, to the creditors of the respective states, in and by two several Acts of Congress, passed, respectively, on the fourth day of August, 1790, and on the eighth day of May, 1792; thereby committing a high misdemeanor, contrary to the intent and meaning of the said law, passed on the twenty-seventh day of March, 1789, in violation of the confidenc [...] [...]rposed in him as a public officer, and manifestly, a [...] [...]e said John Nicholson well knew, to the risque and injury of the commonwealth.
"Article II. That, by an Act of the General Assembly, entitled "An Act to provide for paying and redeeming certain public debts, and for defraying the expences of government," passed on the tenth day of April, 1792, provision was made, among other things, for redeeming certain debts then due and owing by [Page 204] this commonwealth; in the specification of which debts the said certificates, commonly called New-Loan certificates, were not included, nor could they, in any wise, be contemplated to be objects of the said redemption; but, nevertheless, the said John Nicholson, the Comptroller-General of this commonwealth, with a view to promote and procure his own emolument, and under colour of his office, did recognize, certify, and declare the said certificates, commonly called New-Loan certificates, to be redeemable; thereby committing a high misdemeanor, contrary to the terms, intent, and meaning of the said Act of the General Assembly, passed on the tenth day of April, 1792, in violation of the confidence reposed in him as a public officer, and to the manifest loss and injury of this commonwealth.
"Article III. That the said John Nicholson, the Comptroller-General of this commonwealth, with intent to promote and procure his own emolument, and in order to avoid discovery and detection in so doing, until such emolument was actually reduced into his own possession, did not consult the Register-General touching the above transactions, nor communicate the same to the Governor; nor did he discriminate, in the certification entered upon the face of the abstracts of debts respectively, by which certification he recognized and declared the said certificates, commonly called New-Loan certificates, to be subscribable to the said loan opened and proposed on the part of the United States, to the creditors of the respective states, nor in the certification by which he recognized and declared the same to be redeemable under the said Act of the tenth day of April, 1792, between the said certificates, commonly called New-Loan certificates, and other certificates which were properly debts, or evidences of debts, due and and owing from this state, and as such might lawfully be subscribed to the said loan, and redeemed by virtue of the said Act of the tenth of April, 1792: in which conduct the said Comptroller-General [Page 205] committed a high misdemeanor, in as much as, thereby, all the checks of office, provided by law, were destroyed, the other officers of government were deluded into error, and the commonwealth suffered manifest loss and injury,
"Article IV. That, by the Constitution of this commonwealth, it is declared, that no money shall be drawn from the Treasury, but in consequence of a previous appropriation by law; yet the said John Nicholson with a view to promote and precure his own emolument, did, under colour of his office, and in the above mentioned delusive manner, certify to the Governor that certain debts, including the said certificates, commonly called New-Loan certificates, but not naming or describing the same, were redeemable and payable, when no fund was, by law, provided for paying the same; thereby committing a high misdemeanor, misleading the other officers of government, and causing money, without a previous appropriation, to be drawn from the Treasury in violation of the constitution.
"Article V. That the said John Nicholson, Comptroller-General of the commonwealth, with intent to promote and procure his own emolument, and having formed a plan to cause, under colour of his office, the said certificates, commonly called New-Loan certificates, to be redeemed, did, by himself or his agents, between the tenth day of April and the first day of August, 1792, purchase a very great amount of the said certificates, as well from persons who came to exchange the same at his office, in pursuance of a provision for that purpose contained in the said Act of the twenty-seventh of March, 1789, as from others; which certificates, so purchased, were afterwards actually redeemed and paid for at the Treasury; thereby committing a high misdemeanor, rendering his official trust subservient to the purposes of speculation, and injuring the reputation, as well as the interest of the commonwealth, whose officer he was.
"And the said House of Representatives, by protestation, [Page 206] saving to themselves the liberty of exhibiting at any time hereafter, any other accusation or impeachment against the said Comptroller-General, and also of replying to the answers that the said Comptroller-General shall make unto the said articles or to any of them, and of offering proof of the said premises or any of them, or of any other impeachment or accusation that shall be exhibited by them as the case shall require, do demand that the said John Nicholson, Comptroller-General of this commonwealth, may be put to answer all and every the premises, and that such proceedings, examinations, trial and judgment may be upon him had and used as is agreeable to the constitution and laws of this commonwealth, and the said House of Representatives are ready to offer proof of the premises, at such time as the Senate of the commonwealth of Pennsylvania shall appoint.
"Additional Articles of Impeachment against John Nicholson, Comptroller-General.
"Article VI. THAT the said John Nicholson, Comptroller-General of this commonwealth, being intrusted by the aforesaid Act, entitled, "An Act to repeal so much of any Act or Acts of Assembly of this commonwealth, as directs the payment of the New-Loan debt, or the interest thereof, beyond the first day of April next, and for other purposes therein mentioned," passed the twenty-seventh of March, 1789, to receive the said certificates, commonly called New-Loan certificates, from the persons holding the same, and to re-deliver, to such persons, the certificates of debts, due by the United States, loaned to this state, did, in the execution of the trust so in him reposed, receive, from sundry persons, certain certificates, commonly called New-Loan certificates to be exchanged as aforesaid; whereby, and by virtue of the said Act of Assembly, the said certificates became the property of this commonwealth, and ought to have been delivered by him, to the Register-General, for the purpose of [Page 207] being cancelled and preserved; yet the said John Nicholson, then being Comptroller-General of this commonwealth, well knowing the same to be the property of the commonwealth, but contriving and intending to convert certain of the same certificates to his own use and emolument, did, between the tenth day of April, 1792, and the first day of August, 1792, unlawfully, and contrary to the duties of his office and the trust so as aforesaid in him reposed, subscribe the last mentioned certificates to the loan aforesaid, proposed by the United States to the creditors of this state, in his own name and for his own use and benefit; whereby the said John Nicholson hath committed a high misdemeanor, in the violation of the trust and confidence by this commonwealth in him reposed, and manifestly tending to the injury and loss of the said commonwealth.
"Article VII. That the said John Nicholson, Comptroller-General of this commonwealth, being intrusted by the aforesaid Act, entitled, "An Act to repeal so much of any Act or Acts of Assembly of this commonwealth, as directs the payment of the New-Loan debt, or the interest thereof, beyond the first day of April next, and for other purposes therein mentioned," passed the 27th day of March, 1789, to receive the said certificates, commonly called New-Loan certificates, from the persons holding the same, and to re-deliver to such persons the certificates of debts due by the United States, did, in the execution of the trust so in him reposed, exchange, for sundry persons, certain certificates, commonly called New-Loan certificates, by receiving of the said persons, the said New-Loan certificates, and delivering, in return thereof, an equal amount in the certificates of debts due by the United States; whereby, and by virtue of the Act of Assembly in such case made and provided, the said New-Loan certificates became the property of this commonwealth, and ought to have been delivered to the Register-General to be cancelled and preserved; yet the said John Nicholson, then being Comptroller-General of this commonwealth, well knowing the premises, [Page 208] but contriving and unlawfully intending to convert certain of the same certificates to his own use and emolument, and by subscribing the same to the loan aforesaid, by the United States proposed, to procure the amount thereof to be paid to him by this commonwealth, did, between the first day of April, 1792, and and the first day of August, 1792, unlawfully and contrary to the duties of his said office and the trust so as aforesaid reposed in him, subscribe the said last mentioned certificates, commonly called New-Loan certificates, to the said loan proposed by the United States, in his own name and for his own use and benefit; and did afterwards apply for, and obtain the amount thereof; to be paid by the Treasurer of this commonwealth to his use, whereby the said John Nicholson hath committed a high misdemeanor, hath violated the trust and confidence so as aforesaid in him reposed, and hath occasioned great loss and detriment to this commonwealth."
"HOUSE OF REPRESENTATIVES, Wednesday, September 4, 1793. P. M.
"On motion,
"Resolved, That Messrs. Morgan, Swanwick, Evans, Gallatin, and Johnston be a committee to offer to the Senate an amendment of the first article of the impeachment of John Nicholson, Comptroller-General of the commonwealth, by substituting the words "twenty-seventh" in the place of the word "sixth," in the thirty-second line, and to request the Senate to direct the same to be made."
"The answer of John Nicholson to the articles of impeachment exhibited against him by the honorable the House of Representatives of the commonwealth of Pennsylvania.
"The said John Nicholson, saving to himself all advantages of exception to the said articles, respectfully answereth and saith,
[Page 209]"That he is not guilty of all or any of the matters in the said articles contained, in manner and form as they are therein charged against him."
"The Replication of the House of Representatives of the commonwealth of Pennsylvania, in their behalf, and in the name of the People of Pennsylvania, to the Answer made by John Nicholson, to the articles of accusation and imp [...]ent exhibited by them to the Senate, and now depending against him.
"The House of Representatives of the commonwealth of Pennsylvania, Prosecutors on behalf of themselves, and the People of Pennsylvania, against John Nicholson, Comptroller-General of the said commonwealth, reply to the answer of the said John Nicholson, and aver*, that their charge of high misdemeanors against him the said John is true, and that the said John is guilty of all and every the matters contained in the articles of impeachment, by them exhibited against him, in the manner and form as they are therein charged, and this the said House of Representatives are ready to prove against him, at such convenient time and place as the Senate shall appoint for that purpose."
The Speaker addressed the managers and observed that the Senate were ready to hear them.
Whereupon, Mr. Morgan rose, to open the prosecution, addressing himself to the Speaker and Gentlemen of the Senate; premising, that as a Member of the House of Representatives, and one of the managers appointed to conduct the present impeachment; he would endeavour to give a general view of the testimony, both written, and unwritten, which would be adduced in support of these charges. He observed, that, this practice had been borrowed from that [Page 210] country, from which the most of our rules, and precedents were copied: They found it necessary in that country to bring notorious offenders to the grandest tribunal of the nation: therefore impeachments were found to have been conducted before the house of lords in England as early as the year 1321.
This being the properest court where persons of fortune and influence should be tried, and where deception and imposition could not avail, nor have any weight.
In Pennsylvania few instances had occurred, the proceedings are circumscribed, and she has adopted the practice of England by ingrafting this precedent in her constitution.
The present impeachment was brought forward against this officer by the House of Representatives of this commonwealth, conformably to the precedent above alluded to, and agreeably to the constitution which prescribes, that "The House of Representatives shall have the sole power of impeaching."
"All impeachments shall be tried by the Senate. When sitting for that purpose, the Senators shall be upon oath or affirmation. No person shall be convicted, without the concurrence of two thirds of the members present."
"The Governor and all other civil officers, under this commonwealth, shall be liable to impeachment for any misdemeanor in office. But judgment in such cases, shall not extend further than to removal from office, &c." and according to the practice acknowledged and recognized in GREAT BRITAIN.
He adverted to the manner in which the present trial had been instituted, and he read the report pages 83-4-5-6-7, at the same time giving the history of the manner when and how, that report was brought forward, and the first five articles were adopted, which can be easily collected from a perusal of the foregoing pages.
Mr. Morgan made suitable remarks on every member and section of the report, and of the several circumstances attending its being adopted.
He observed, that to understand the subject properly, [Page 211] it was necessary to go thro' the laws of Pennsylvania, and the Acts of Congress, relative to the subscription to the first loan; to consider the provision of Pennsylvania t [...] comply with the requisition of Congress, and to examine minutely whether she considered New-Loan certificates as a debt, in order to raise this superstructure on a fair construction of the respective Acts of Congress, and laws of Pennsylvania.
He said that the amount of New-Loans which were redeemed was about 63,000 dollars, and that Mr. Nicholson owned about 60,000 dollars of that sum.
He read the preamble to the Act of the 16th March, 1786, explaining the views of the Legislature to provide for the payment of the debts due to the citizens of this commonwealth, as Congress could not; the 13th section was then read as being more immediately connected with the present case; the 14th section describes the class of creditors to be relieved, and gives a description of the certificates which were entitled to interest.
He read a long report of a grand committee of Congress, Sept. 24, 1785, Journals of Congress, volume 10, page 310, 311, 329, and consequent resolution, by which it appeared that Congress were dissatisfied at the mode pursued by Pennsylvania, and forbid their Commissioner of Loans to settle or issue, unless as therein provided, that is with these States who had complied with the requisition of 1781.
This was disagreeable to Pennsylvania who afterwards passed the Act of March 1, 1786, with a view to counteract the measures contemplated in the resolution of Congress, and to accommodate the citizens of this state, who were creditors of the United States. And near two million pounds of New-Loans had been issued.
Mr. Morgan gave the history of New-Loans, issued in consequence of this Act of March 1, 1786—repealed by Act of March 27th, 1789, the interest paid for four years; the second and third sections are the most material parts of the repealing Act—the former principles are recognized in this Act, and after its passing no other [Page 212] use could be made of the New-Loans than to exchange them for Continental certificates.
They could no longer continue a claim, as the law was repealed which constituted them a claim: It became difficult from payments in the Land-Office to return continental certificates, and the fund from the Land-Office was added in-consequence of the practice of splitting certificates.
In the repealing Act of 1789 the Legislature contemplated to restore their debts to the parties—Pennsylvania designed an exoneration on the return of the continental certificates, on one single condition, to wit, the restoration of those certificates to the parties.
The State has been injured, the criminality of persons depends much upon circumstances, she is injured not by her own acts, but by the conduct of one of her officers, by a wrong construction of law, whether wilful or mistaken, the Senate will judge when the facts and evidence will be laid before them.
This construction under the Act of the 10th April, 1792, has involved the State in a loss of near 15000 dollars, and this immense loss has been sustained by this construction of the present defendant.
Mr. Morgan read part of the 12th and 13th sections of the Act of Congress of the 4th August, 1790, which contemplates only the assumption of certificates issued for services or supplies, none excepted but "certificates issued by the commissioners of army accounts in the state of North-Carolina in the year 1786."
The Act of 27th March, 1789, passed before the Act of the 4th of August, 1790; If the New-Loans are not subscribable to the first loan, they cannot be to the second of the 8th May, 1792. The idea of subscribing them never entered the mind of any person during the continuance of the first loan.
He read the Act of Assembly of the 9th of April, 1791, respecting purparts, for making up the deficiency of interest on continental loans, the Legislature considered the persons relieved here as their only creditors, [Page 213] whose debts were subscribable, had New-Loans been considered as existing debts, equal provision would have been made for them in the said Act.
In the next place he adverted to the Act of the 10th of April, 1792, in which Act the Legislature determined to pay off their proper debts with the purparts. The 2d section appropriates the stock to pay the debts mentioned in the first section, the section describes, 1, the fund; 2, the debts, here he observed that it was necessary to see if New-Loans were included; the interest on New-Loans was not payable at this time. As it is under a construction of this law the articles of impeachment were brought forward, it was necessary to pay proper attention to it, and to weigh the particular state of the affair with the eyes of scrutiny and candor.
This is the construction put on it by us, we cannot tell what is the construction of the Comptroller, or his counsel. Agreeably to the duties required of the Governor for the purpose of carrying this Act into execution, it was necessary for him to have an account of the debts. —He therefore applied to the Comptroller and Register-General, who estimated the debt to be redeemed, and the stock to be sold; this estimate, Mr. Morgan said, did not include New-Loans, but thro' some fatality this document has been lost.
Had the Legislature designed to redeem the New-Loan certificates it was necessary to appropriate larger funds—The stock which had been ordered to be sold, was only adequate to the other debt.
The fifth section refers only to certificates mentioned in the second section.
The sixth section is apparently more indefinite and uncertain, and depended upon what provision Congress would make.
Mr. Morgan then read the Act of Congress of the 8th of May, 1792, supplementary to the Act of August, 1790, which is extended on the same terms, same construction must be attached to each Act, as both Acts are on the same principles. Here he referred to the 2d [Page 214] section of the Act of Congress of the 8th May, 1792, relative to non-subscribing creditors, to get the same interest which he said, merited particular attention.
In the 6th section of the Act of the 10th of April, 1792, as it is confined to the assumption before the first of July, and nothing could strictly be done conformably to it under the last Act of Congress, because no certificates could issue under it until March the 1st, 1793: This compared with the 6th section of the Act of Assembly of the 10th April, 1792, it became impossible that both laws could be literally and expressly complied with; a correspondence took place, between the Governor, Secretary of the commonwealth, Comptroller-General and the Secretary of the Treasury of the United States, and arrangements were made accordingly—all the extracts which he read were repeated, reiterated, dilated and descanted upon, placing every subject in various points of view: remarked that he had gone through the different laws of the United States, and acts of this commonwealth, which were connected with this business, that he would then be under the necessity of referring to written documents and oral testimony; that the letters were numerous and lengthy, and as it was then within a quarter of two he proposed deferring the reading of the letters until the next day.
The Speaker asked Mr. Morgan how long it would take to go through them, he answered, two or three hours, whereupon the Speaker adjourned the trial until 11 o'clock the next day.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolution adopted yesterday, the House resolved itself into a committee of the whole, for the purpose of attending the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee then proceeded to the Senate chamber for the purpose aforesaid,
[Page 215]"After some time the committee of the whole returned to their own chamber.
"The Chairman then left the chair and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended the trial of the articles of impeachment against John Nicholson, Comptroller-General.
"Whereupon,
"The committee appointed to manage the trial of the articles of impeachment of the House of Representatives, against John Nicholson, Comptroller-General reported progress."
Second day of the trial. THURSDAY, FEBRUARY 27.
AT 10 minutes after the hour of eleven the consideration of legislative business was postponed during pleasure, in order that the Senate might sit in their judicial capacity.
The Court being called:—
Mr. Morgan resumed his argument respecting the difficulty which occurred in the Act of Congress granting no certificates until March, 1793, and the Act of the 10th April, 1792, requiring a transfer before the first of July, 1792, and adverted to the necessity of an arrangement in consequence.
He observed that the actions of the Comptroller-General were contrary to his (the Comptroller's) own opinion respecting the redeemability of the certificates in question, and that this could be manifest from the letters to be produced, which were written by that officer, by the Register-General and other public officers—for this purpose he began with the following letter.
"THE Act of the Legislature of Pennsylvania, entitled "An Act for paying and redeeming certain public [Page 216] debts, and for defraying the expences of government, provides that to entitle the holders, of such debt of this state, as is assumable by the United States, to payment therefor, they shall first subscribe the same to the loan of the United States, and on or before the first of July, 1792, transfer to the State-Treasurer for the use of the commonwealth, the certificate or certificates which they shall receive from the United States, in consequence of such subscription, or all and singular the interests and benefits to be derived from the provision which hath been made by the supplementary Act of Congress, passed at last sessions providing for the public debt.
"Under the said Act of Congress the certificates for the subscriptions made will not issue until March 1st, 1793, and consequently they cannot be transferred within the time limited above. The Loan-Officer on making the deposit of State debt grants a descriptive receipt therefor, conditional to return any, that may not be assumable—we have considered this subject, have consulted the Loan-Officer aforesaid, and obtained his concurrence, and are of opinion, that the best way will be to receive from the parties those certificates of deposit signed by Mr. Smith, examine the same, as to their being genuine certificates, and assumable, as well as the amount of principal and interest of such as are, till July 1st, 1792, and take a transfer to the Treasurer thereon, in such manner as the Loan-Officer agrees, shall enable him to issue the certificates on the first of March, 1793—according to the provisions of the Act of this State aforesaid.
"This plan is submitted for the approbation of your excellency.
And we have the honor to be, &c. JOHN NICHOLSON, JOHN DONNALDSON."
His Excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
[Page 217]
"Secretary's office, Phila. June 23, 1792.
"GENTLEMEN,
"THE Governor directs to acknowledge the receipt of your letter of the 22d instant; and to inform you, that, thinking it proper to have the sanction of the Secretary of the Treasury in making any arrangement with the general government to satisfy that part of the law for the redemption of the State debts, which require a subscription to the loan proposed by Congress and a transfer of the evidence of the stock, he has written to that officer on the subject, and will communicate his answer as soon as it is received.
I am, Gentlemen, &c. A. J. DALLAS, Secretary."
To the Comptroller and Register-General.
The letter from the Governor to Mr. Hamilton, page 96, 97:—
And the letter from Mr. Hamilton to the Governor, page 97, 98, were then read, with applicable observations on each.
The arrangement made in consequence of the foregoing took place, and the Comptroller and Register were to certify the genuine and assumable quality of the debt, the party after assigned to the Treasurer, a certification was made to the Governor, who issued his warrant on the Treasury for payment.
That the Comptroller-General certified New-Loans to be genuine and assumable he produced the abstracts of Thomas Hale, Joseph Honeycomb, and Alexander Addison.
Question by Mr. Lewis. To whom were they certified to be genuine and assumable?
Ans. There is no direction, suppose to Mr. Smith.
Mr. Igersoll observed that the abstracts on the table, were sent to him from the Loan-Office of the U. States.
Mr. Morgan. This certification must be in his official capacity, as he could not do it in any other way, by which he has transgressed the bounds of his duty, he was not warranted in so doing, if the certificates were [Page 218] not assumable. He referred to the communications between the officers of the general and state governments.
Whatever might have been the opinion of Mr. Hamilton before he had seen the law, his sentiments were otherwise after he did see it.
He then read the letter from Mr. Hamilton to Mr. Dallas, page 76-7-8-9, commenting as he went along; —observing that the New-Loans were not issued for services or supplies but for Continental certificates. They were not evidences of debt when certified, as the law was repealed. The Secretary of the Treasury could not be acquainted with our laws, and the certificates on the face of them appeared to be for debts. As they were sated to him they appeared to be subscribable, afterwards on more mature information and consideration they were not so.
In a subsequent letter the Secretary gives a different opinion. He read the following:—
"Treasury Department, August 21, 1793.
"SIR,
"I HAVE had the honor of your letter of the 29th of July last which the press of business has prevented my sooner answering.
"The certificates to which you refer have not been admitted upon the loan proposed by the acts of Congress payable in evidences of State debt.
"The following circumstances have attended the case. Certificates of the description of those called New-Loan certificates of Pennsylvania to the amount of 65,210 dollars and 28 cents were offered for subscription under the Act, entitled "An Act supplementary to the Act for making provision for the debt of the U. S."
"It appeared (a circumstance which had not come to my knowledge till after those certificates were so offered) that there was a law of the commonwealth of Pennsylvania which rendered it questionable whether they could legally be considered as a subsisting debt of the commonwealth, a quality necessary to their being assumable, and an opinion of thee Attorney-General of Pennsylvania [Page 219] was communicated to me, shewing that he did not view them as a subsisting debt of the commonwealth.
"This led me to state the case for the consideration of the Attorney-General of the United States, who gave an opinion that the Acts of the Pennsylvania Assembly of the 27th of March, 1789, and of the 30th of March and 1st of April, 1790, abolished the certificates in question as debts of the state except for the purpose of being re-exchanged for Continental certificates, and therefore that the former as wanting the due recognition from that state could not be legally received upon loan.
"To this opinion I was about to conform and to direct the rejection of the certificates offered to the loan.
"But having learnt that there was a probability of a judicial investigation of the point, I forebore to give a final instruction concerning it and left the matter suspended.
"When the commissioners were about to close the settlement of accounts between the united and individual States it became necessary to certify to them the amount of the debt of this commonwealth which had been admitted upon loan. The course pursued was to certify absolutely the sum which had been subscribed and finally admitted, and to state in a note the amount and situation of the certificates in question which had been offered to the loan and not admitted. It is understood that this amount was not embraced in the statement of the Commissioners.
"There has been no suspension of the interest on so much of the debt of the commonwealth as was subscribed and admitted upon the loan.
"These circumstances amount to a virtual rejection of the certificates to which your enquiry is understood to have reference.
"I state them particularly that the precise course of the business may be accurately seen.
"His Excellency the Governor Pennsylvania."
[Page 220]Mr. Morgan observed that this opinion of the Secretary was not on general principles, but immediately applied to the New-Loan certificates certified by Mr. Nicholson to be genuine and assumable.
The grounds not unknown to our officers, the Comptroller must have been better acquainted with them than the Secretary of the Treasury. It does not appear that in his former communications he ever mentioned the repealing Act of 1789, to Mr. Hamilton; therefore the Secretary's former decision must have been on a partial view and consequently of no credit.
Mr. Nicholson knew that no subscription could be made without a previous surrender of continental certificates, and this he was not empowered to do: This appears from the law, and his letters on this subject to the Governor.*
Mr. Morgan then read Mr. Hamilton's letter to the Governor, pages 102 and 103.
The following letters were then read.
"Secretary's Office, Philad. 23d Dec. 1791.
"SIR,
"INCLOSED I send for your perusal, a letter which the Governor has received from the Secretary of the Treasury of the United States; and his Excellency directs me to request that you will, as soon as possible, make a full report to him upon the subject to which it refers. I am, &c.
TO JOHN NICHOLSON, Esq Comptroller-General of Pennsylvania.
Comptroller-General's Office, Philad. Decem. 24, 1791.
"SIR,
"IN compliance with your excellency's desire communicated by letter from the Secretary of the commonwealth of yesterday, covering a letter addressed to your [Page 221] excellency by the Secretary of the Treasury of the United States, dated the 21st instant; I report—
"That the whole of the certificates of this state granted for a like sum of certificates of debt of the United States, amounts to
| £1,937,885:15:3 |
Of which there was redeemed, | 118,470:6:6 |
Balance, | 1,819,415:8:9 |
| £ 1,937,885:15:3 |
By an Act passed in March, 1789, the holders of this balance are entitled on presenting their certificates of this state and liquidating the interest received thereon, to receive back their former ones or an equivalent; this hath taken place to a great amount, insomuch that there does not at present remain much unexchanged on a comparison of the whole, the exact amount at present unexchanged I cannot tell, a number of exchanges to the amount of 40 or 50 presented are pending for want of the parties paying the indents due, the remainder I estimate from 40 to 50 thousand pounds, if absolute precision be necessary, I will have the additions and selections made so as to give the sum exactly.
When I read the letter of the Secretary of the Treasury referred to aforesaid, I was doubtful until I consulted it again, whether it really imported that the interest payable quarterly on the certificates granted on the Assumed debt of this state, would be suspended until the certificates of the Federal debt not yet exchanged for the New-Loans as aforesaid should be surrendered or an equivalent in stock under the funding system, as such a case would prostrate the faith of the United States to the will of the Legislature of this state, if they should refuse to surrender them, then the United States (without any fault on the part of the original subscribers or the present holders) would not pay the interest they had issued their obligation for, in which they promised payment. It appeared to me that if such were the law [Page 222] the public credit of the United States might be shaken by it and rendered precarious, but on turning to the law it will appear that the provision for returning the certificates of the United States, was to prevent the United States from paying the interest twice on the same debt, and that in conformity thereto, if any of the certificates of this state commonly called New-Loan debt had been before the first of October last, when the loan closed, subscribed to the said loan, it would have been requisite before the stock had issued therefor, that an equal sum should have been surrendered by the state as aforesaid. The state would thus have redeemed her certificates through the United States in the same manner at present practised, for individuals, but no such certificates of this state were subscribed—consequently the United States are entitled to none of the continental certificates, which are demandable by the persons holding the New-Loans. If they should be delivered to the United States, this state might have to pay the New-Loan certificates without having this resource to do it with. I think too highly of the faith of the public to suppose, that the holders of New-Loan are compellable either to subscribe them to the United States or to re-exchange them for the continental certificates, or that to such as do not, the state are absolved from payment both of principal and interest, but the market value and the irredeemable quality of the continental stock and the present funds of the United States are generally sufficient to induce the change, as is evinced from the great quantity already so exchanged, of the remainder some part is exchanged almost every day, and if the loan should be opened by Congress the exchanges would be encreased thereby.
I have, &c. JOHN NICHOLSON."
His Excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
[Page 223]
"THE subject committed to me by your excellency in December last, respecting the claim made by the Secretary of the Treasury to a surrender on the part of the State, of the Continental certificates not exchanged, having been brought to a close; and being this day informed at the Treasury that all obstacles were removed respecting the transfer and payment of interest quarterly on the assumed debt of this state, or the payment quarterly to the state of the residuum unsubscribed of this state's quota; and orders having gone out to the Loan-Office of the district of Pennsylvania, consequent thereupon, I hasten to inform you thereof.
"The subject was an important one, and to have required the Continental certificates from Pennsylvania, while the New-Loans for which they were given were out, and the state responsible for, without these means of redemption, could have placed her in an unpleasant situation. To take off the appearance of this hardship, it was suggested, that in case the New-Loans not exchanged, would not be subscribed to the United States by the holders (which on the proposed terms of the loan might be done) yet still that the state would by the terms of the same loan, be in the receipt of a sufficient sum from the Union to meet the interest due to these creditors. But to this it was objected, that this receipt of interest by the state would be temporary, and would cease when the settlement of our accounts with the United States should be effected, and the balances provided for agreeably to law, whereas the demand against the state would be perpetual, and could only be discharged by payment of the debt.
"On the whole after much attention to this business it hath been settled to our wish; and the good sense of the Secretary of the Treasury hath led him to a decision, under the Act of Congress of August 4th, 1790, which [Page 224] is equitable and consonant with the scope of the said Act. I am, &c.
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
Mr. Morgan made suitable remarks on these letters, and observed that Pennsylvania had paid upwards of 63,000 dollars, and had nothing in return, and could not procure the Continental certificates. This act being done clandestinely must have a different construction than if it had been done openly.
The Comptroller-General obtained the money before the Governor or Register-General had any information of it: It was done in a way regardless of the checks of office. It was necessary that New-Loans should be declared assumable before they were subscribed, if there had been a full consultation it would shew some degree of fairness. The Governor should be consulted if there should exist any difference of opinion between the Comptroller and Register-General.
Mr. Nicholson shut the secret in his own breast, the dates of interest on the face of the abstracts were only inferences, and the Register-General did not know they were New-Loans.
Mr. Morgan read the warrant No. 462, by which Mr. Nicholson reduced the money into his possession, the Register-General was not to blame as he did not enter into the calculations of abstracts.—Dates of interest and hurry of business might have induced him to overlook or not to have attended to this particular.
He read the following letter—
"PROPOSALS of 12ʃ. in the pound and upwards have been received for 986,000 dollars 3 per cent. stock. The sum estimated to be necessary for the redemption of the State debt according to law. A particular account [Page 225] of the proposals shall be laid before you—in the mean time we give this information, and are, with great respect, &c.
His excellency THOMAS MIFFLIN, Esq Governor.
[Intended to have been signed by the Register.]
He observed that the original letter from the Governor written two days after the foregoing and the answer were not to be found.
He read the following letters:—
"INCLOSED is the list of the proposals and the sums respectively for 986,000 dollars 3 per cent. stock for redemption of the state debts submitted for your approbation. We are, &c.
JOHN NICHOLSON, JOHN DONNALDSON."
"N. B. I. Brunson & Co. have relinquished 30,000 of their proposals of the 27th, which is therefore not included in the inclosed list."
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
List of proposals for the purchase of 3 per cent. stock:—
John Nicholson, in trust | 46,000 | at 12ʃ ½. |
Isaac Brunson & Co. | 20,00 | 12ʃ ⅙. |
Griffith Evans | 3,000 | 12ʃ ½. |
John Nicholson | 7,000 | 12ʃ. |
James & Wm. Miller | 5,000 | 12ʃ ½. |
Philip Reilly | 10,000 | do. |
Thomas M. Willing | 10,000 | do. |
Isaac Brunson & Co. | 20,000 | do. |
John Donnaldson (A.) | 10,000 | do. |
John Donnaldson & Co. | 30,000 | do. |
John Donnaldson | 10,000 | do. |
[Page 226]Joseph Webb | 2,000 | 12ʃ ½. |
N. G. Philips | 20,000 | 12ʃ 1. |
John Lynch | 10,000 | do. |
Robert Morris | 200,000 | 12ʃ ½. |
George Eddy | 30,000 | 12ʃ 1. |
George Meade | 15,000 | do. |
Isaac Brunson & Co. | 20,000 | 12ʃ ½. |
James Crawford | 10,000 | do. |
John Nicholson, | 12,000 | 12ʃ. |
Le Roy & Bayard | 159,000 | 12ʃ ½. |
Walter Stewart | 30,000 | do. |
Thomas M. Willing | 5,000 | do. |
Robert Morris | 250,000 | 12ʃ. |
Wm. Bingham | 6,000 | 12ʃ ½. |
John Donnaldson | 6,000 | 12ʃ. |
Walter Stewart | 20,000 | 12ʃ ½. |
Clement Biddle | 20,000 | do. |
| 986,000 | |
- JOHN NICHOLSON,
- JOHN DONNALDSON."
April 30, 1792.
I approve, 30th April, 1792, T. MIFFLIN."
"Will you be so good as to calculate the specie sums to be paid on each proposal.
A. J. DALLAS."
"Secretary's Office, Philad. Dec. 24, 1792.
"GENTLEMEN,
"THE Governor directs me to request, that you will immediately furnish him with a copy of the estimate, upon which the sale of the 3 per cent. stock to the amount of 986,000 dollars, was directed, for the purpose [Page 227] of redeeming the state debts, agreeably to the Act of Assembly. I am, &c.
To the COMPTROLLER and REGISTER-GENERAL of Pennsylvania.
"THE quantity of 3 per cent. stock directed to be sold by the second section of the Act of the 10th of April, 1792, was estimated at the price of 12ʃ per pound, as the market price at that time was lower, it would not justify an higher calculation, and the limitation of price in the Act would not admit sales for less.
"The calculations are not preserved, however it is easy to re-state it.
"The funded debt then to be redeemed was about £.103,559
"The funded depreciation debt, 48,450
"Amount £. 152,009
"Equal in dollars to 405,357 33
"To redeem 218,469 84/100 dollars 3 per cent. at 10ʃ ½ 109,234 92
"To redeem 145,646 56/100 deferred state purparts at 39 per cent. required 56,802 15
"And to redeem the residue of the dollar-money, about 12,500 dollars and interest 20,112
"Amount 591,506 40
"The amount of the neat proceeds of the sales—986,000 dollars at 12ʃ ½ 591,600
We have the honor, &c. JOHN NICHOLSON, JOHN DONNALDSON."
His Excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
[Page 228]Here Mr. Morgan. remarked that the New-Loan certificates were excluded.—If these two officers made a partial statement, they did not comply with the requisitions, it must therefore be conceded that it included all: The act of the 10th of April, 1792, was their rule of construction. He then read the 2d section of that act. Mr. Morgan then held in his hand an abstract which had been actually redeemed, which did not on the face of it shew the certification of the Comptroller for being genuine and assumable, but it was in the hand writing of that officer, in the abstracts of others, it was necessary, here it was not, the form is similar to the others; it consisted of eight columns.—1. Date of certificate. 2. Number of ditto. 3. By whom issued. 4. To whom issued. 5. Commencement of interest. 6. Amount of each certificate. 7. Interest computed to December 31, 1791. 8. Total amount.
In this abstract it is necessary to observe that a certificate purchased from an irreproachable witness on the 7th of July, 1792 is contained in a receipt dated the 30th June, 1792, an erazure is made to cover purchases made after the first of July, to bring them within the time prescribed by the act.
The foregoing were offered to support the three first articles, the fourth is rather a deduction from them, he observed that the three first were considered together for they could not be separated.
He read the fourth article.
Mr. Nicholson, he observed, could not certify to the officers of the United States in his private capacity, he therefore did it under colour of his office, there was no specification of New-Loans on the face of the abstracts, and no fund provided to pay them, the money must therefore have been drawn from the Treasury without any previous appropriation, or out of a fund otherwise appropriated, which is contrary to the constitution; he quoted the 21st section of the first article of the constitution of Pennsylvania. It is apparent from these facts and circumstances that the Comptroller General knew [Page 229] when he made the certification, and unless an appropriation can be shewn, it will not be disputed that the New-Loans could be redeemed out of any other than the fund contemplated in the Act of the 10th of April, 1792. He repeated the reading of the second section, and said, that unless some other law can be shewn, which he knew nothing of, there was no fund, the section mentioned nothing of New Loans, nay it appropriates the funds and excludes New-Loans; the sale of the three per cent. stock was co-extensive with its object. If therefore 986,000 dollars were only sufficient, and part directed for New-Loans, it would affect the other, and injure the proper state creditors; the honor of the state would be disgraced, as she promised payments and had not funds.
To prove that the money was reduced to Mr. Nicholson's possession, he read the Governor's warrants, Numbers 425, 451, and 462, July 9, 12, and 14, 1792.
The Treasurer appeared with his books to shew that the money was paid the 14th July, 1792, before the Register or the Governor knew any thing about the subscribability of New-Loans.
The consequences of this transaction aggravate the crime, Mr. Nicholson's gain on the whole was about 14 or 15,000 dollars, and the commonwealth lost 25 per cent.
Mr. Morgan read the 5th article, observing that he would substantiate the charge contained in this by respectable witnesses, they did not appear, and he moved for an adjournment, which was granted, with directions from the Speaker to be punctual.—The members of the House of Representatives returned to their chamber, and repeated the ceremony, as in page 214 and 215.
The letter of Mr. Nicholson, read yesterday in the House of Representatives (see page 200) was read the second time; and referred to Messrs. B. Morgan, M'Lene, Evans, and Bowman. It does not appear that they reported on it.
[Page 230]
Third day of the trial. FRIDAY, FEBRUARY 28.
THE Senate met; and the members of the House of Representatives in committee of the whole repaired to the Senate-chamber.
At 10 minutes after eleven o'clock Mr. Morgan rose, having premised that his arguments the preceding days respected the first, second, third and fourth articles of impeachment against the Comptroller-General, that he would then proceed in order to the fifth.
That he would shew by the different statements of that officer to the Legislature in his official capacity, that he did not look upon New-Loan certificates as a State debt after the passing of the Act of March, 1789, as Mr. Nicholson made no mention of them in any of his communications.
That the Governor was of the same opinion.
The committees on Ways and Means of the same;
And the Legislature likewise.
That after the printed documents would be brought forward, he should then adduce oral testimony. He read part of the State of the Finances of the commonmonwealth as reported by Mr. Nicholson on the 7th November, 1787, in which Mr. Nicholson mentioned the New-Loans as an existing debt against the state.
That in all his communications previous to March, 1789, the Comptroller mentioned the New-Loans as an existing debt; and a total change of sentiment took place in him, in the Legislature, and Governor, after that period; because they conceived the law of March, 1789, had done away the claim which existed by the law of 1786, and the New-Loans were omitted in all their subsequent statements as no longer an object of Legislative consideration.
[Page 231]He observed that the Governor in his speech to the Legislature on the 10th December, 1791, did not mention New-Loans as a debt or claim on the state, and that he did not forget them, as he made mention of the payment of the arrears of interest due on them, for which provision is made in the repealing act of March, 1789.
He read part of the Governor's speech to both Houses on the 28th December, 1790, being the first session after the passing of the act of March, 1789, in which the Governor enumerated the aggregate of all the engagements of the commonwealth, and mentioned only the balance of interest due on the New-Loan debt; if they had been debts, he would not have executed his duty in omi [...]ting to state them, that funds might be provided by the Legislature for their redemption.
The same idea was pursued by the Governor in all his communications respecting the New-Loans.
The Comptroller-General himself, the committee on Ways and Means, and the other officers were of the same opinion. Mr. Morgan read part of the report of the committee on Ways and Means, Feb. 8th 1791, page 166 of the minutes, wherein the other debts of the commonwealth are mentioned and provided for, but not the New-Loans: Notwithstanding this is called a statement of all the debts of Pennsylvania, and added that every body put the same construction on that debt.
He read part of the statement of the Comptroller and Register-General of the 30th November, 1791, to the Governor, and observed that the Governor and the Secretary were betrayed into the part they had acted, and for proof of which he would call witnesses.
Alexander James Dallas, Esq sworn.
Ques. by Mr. Ingersoll. Had there been any estimate made by the Comptroller and Register-General of the stock to be sold and debt to be redeemed, which estimate cannot be found at this time, and did or did not the [Page 232] Comptroller ever hint that New-Loans were redeemable?
Ans. Immediately after the passing of the Act of the 10th of April, 1792, agreeably to direction from the Governor, I applied, by letter, to the Comptroller and Register-General, in the following words:
"Secretary's Office, Philad. 13th April, 1792.
"GENTLEMEN,
"BY the Act, entitled "An Act to provide for paying and redeeming certain public debts and for defraying the expences of Government." The Legislature contemplates the payment of certain debts on the first day of July, next, by the sale of 3 per cent. stock, at a certain rate, with a power however to suspend the sale until the stipulated price can be obtained, you will be pleased therefore to take that Act into immediate consideration, and report what arrangements will be necessary, in your opinion, for carrying the redemption of the debt into effect. By order of the Governor,
To the COMPTROLLER-GENERAL and REGISTER-GENERAL of Pennsylvania.
Soon after this the Comptroller and Register-General joined in a report to the Governor on the subject, which the Governor perused, approved, and signed with the initials of his name; in consequence of which indorsement I returned it as an official document to the Comptroller or Register's office as their authority to act, I do not know to which of them, not by myself, but by one of my assistant clerks, whom I ordered to take it and deliver it with his own hands.
When the subject was before the Legi [...]ature, an enquiry was made for this document, and, I think, sir, that application was made both to the Comptroller and Register to furnish it, after search in their respective offices, they answered, it was not be found among their records. I then strictly examined the papers in [Page 233] my office, whether by some mistake or other, it had not been sent to the Comptroller or Register-General, after this search my mind was clear, that it had been transmitted to the officers above mentioned.
I wrote again by the direction of the Governor to the Comptroller-General and Register-General, (see page 226.)
On the 26th of the same month they united in a joint report to the Governor, (see page 227.)
Mr. Dallas observed that he was not provided for being an evidence in this cause, that letters might be in his office, of which he might be totally ignorant, and if he should be unacquainted with such, or mistaken in dates or numbers he hoped to he excused, as he did not prepare himself to be a witness in this business. The last estimate corresponded with the first, I speak more from the conviction of my mind, than from the recollection of the document. The Comptroller and Register's first estimate, was dated before the 16th of April, 1792, which directed the mode of carrying the Act of the 10th of April, 1792, into execution, supposed to be lost.
Ques. by Mr. Ingersoll. Did any communication, except in writing, pass between the Governor and the Comptroller-General respecting the stock to be sold and kind of debt to be redeemed, subsequent to the Act of the 10th of April, or whilst that business was pending before the Legislature?
Ans. Not to my knowledge; the Governor shewed me a plan of finance recommended by Mr. Nicholson, who requested him (the Governor) to submit it to the Legislature, I shewed it to some of the members, Mr. Gallatin for instance was one of them, who, if I understood him right, informed me he had seen and read it before, and refused to read it again.
Ques. by the same. Do you remember any conversation between yourself and Mr. Nicholson, respecting the redemption of New-Loans, or whether any intimation was made to you respecting the operation of that Act to embrace New-Loans?
[Page 234] Ans. On my first hearing of the redemption of New-Loans, I was much surprised, I called on the Register-General, same day I wrote to Mr. Ingersoll, (page 98-9), who appeared to be at a loss himself; I also called on the Comptroller-General, and asked him upon what grounds he was proceeding in the redemption of New-Loans; as it was my opinion they were annihilated by the Act of March 27th, 1789, except for the purpose of equalizing the interest for four years, and the re-exchange.
Mr. Addison was in the office at the same time, he introduced himself to me, I learned that his business there was, for the purpose of re-exchanging or redeeming New-Loans—Mr. Nicholson told me that he was sure he was right, and acting under the regular construction of the Act, but gave me no particular reasons for his proceedings.
I mentioned it to the Governor who directed me to get the Attorney-General's opinion on the subject, which was accordingly obtained, (see pages 100-1-2.)
Ques. by Mr. Ingersoll. Do you know any thing further on this business, or relatively to what passed between the Comptroller and Mr. Addison?
Ans. I understood that Mr. Addison had two New-Loan certificates either for re-exchange, or redemption, he came to my office, I shewed him the annihilating Act, and gave him my opinion on the same. Mr. Dallas retired to be called up again, if wanted.
John Donnaldson, sworn.
Ques. by Mr. Ingersoll. Have you been called upon to render an estimate of the debt to be redeemed and stock to be sold about the 13th April, 1792?
Ans. About that time the Comptroller-General and myself received a letter from the Governor, directing us to render an estimate or statement of the debt to be redeemed, and of the stock necessary to be sold according to the directions of the Act of the 10th of April same year, for the purpose of redeeming that debt.
[Page 235]The documents on which this statement or estimate was made, were lying in the Comptroller's office, the estimate was drawn up there, I concurred in it, a calculation of the 3 per cent. stock contemplated to be sold, was annexed, or added to it; which was transmitted to the Governor, who approved of it, and it was returned, I believe, but do not know at this time, what became of it.
In December, 1792, being called upon by the committee of ways and means, for it, I turned to my letter book with confidence expecting to find it there, but could not, whether hurry of business, or what prevented me from copying it, I cannot tell. I went to the Comptroller's office, it could not be found there, we sat down and made out another from the rough papers which accorded with the first, to which I gave my signature.
Ques. by Mr. Ingersoll. Did that estimate contain a statement of all the stock to be sold and the debt to be redeemed?
Ans. It occured so to us at that time.
Ques. Do you recollect the amount of the 3 per cent. stock entered in the second estimate?
Ans. I know it to be the same precisely in the first as in the second. (He read it.)
Ques. Did or did not the Comptroller intimate at any time to you his ideas, that New-Loan certificates were subscribable, if so at what time, and when was the date of the first warrant issued for the payment of such redemption?
Before the witness had time to answer this question, Mr. Rawle proposed that it would be better to state the matter generally.—Therefore the question was altered to this.
Ques. How was the redemption of State debts conducted.
Ans. As well as I can recollect when the debt was to be redeemed the party generally made out two copies of an abstract of the debt he possessed, these abstracts were sometimes printed and contained eight columns— [Page 236] in the first column the date was inserted, in the second the number, in the third, the name of the person by whom isued; in the fourth, to whom issued; in the fifth, the commencement of interest; in the sixth, the amount of each certificate; in the seventh, interest computed to the 31st December 1791, or otherwise agreeably to the quality of the certificates; and the eighth or last, contained the total amount of principal and interest in pounds, shillings and pence.
That abstract was brought to the Comptroller-General to certify the genuine and assumable quality of the debt.
Ques. Were the certifications of genuine and assumable on both or only on one?
Ans. Sometimes on both, more from accident than design, as it was unnecessary.
Ques. by Mr. Wilcocks. You say, these abstracts were printed, where were they to be had?
Ans. At the Stationers.
Ques. Were there none to be had at the Comptroller's office?
Ans. I do not know.
After this certificate was obtained from the Comptroller, they carried that abstract and certificate to the Loan-officer of the United States, and there subscribed it to the loan opened in a book for that purpose; after making this subscription, the Loan-Officer gave them a duplicate of the abstract, and a receipt, which were brought to my office, and examined there, the interest calculated up to the time allowed by law, and an account was stated by me, State of Pennsylvania to — Dr., owing to the hurry of business it was divided between my Clerks and myself, they made the calculations of interest and additions, and I made the entries; or they made the entries, and I made the calculations and additions;—that calculation with the abstract was sent to the office of the Gomptroller-General, a corresponding entry being made in my books.
Ques. Was you always able to make this?
[Page 237] Ans. Being oftentimes much hurried, a person helped me in the calculations and castings; interests were calculated sometimes by myself, and sometimes by another, but the entries were for the most part made by me. I think it underwent an examination at the Comptroller's office, and in that case the abstracts were returned to me because I had not completed the returns of the particulars and different kinds of debt, but the gross amount: the Comptroller signed it, the same was brought to me, which I countersigned, and it was then sent to the Governor, who granted a warrant on the Treasury for the amount.
I recollect to have no conversation with the Comptroller respecting New-Loans, until after the date between the 14th and 17th July, 1792, when the abstracts No. 264, 265 and 266, and warrants had passed my office.
On this conversation a conference took place concerning this matter, wherein I agreed with him in sentiment, that the New-Loans were subscribable, redeemable, and embraced under the act of the 10th April, 1792.
Ques. Was it Mr. Nicholson gave you the information?
Ans. I received information out of doors, that New-Loans were contained in the abstracts, and was so well convinced, altho' I went to Mr. Smith's to see whether New-Loan certificates were included, that I afterwards passed several abstracts knowing them to contain New-Loans, for which warrants issued and were stopped in my hands, except one from Mr. Addison which I delivered him by mistake.
In my conversation with the Comptroller we referred to the several acts of the United States and laws of this commonwealth, the only difficulty which occurred was the delivery of the Continental certificates for which the New-Loans had issued—He answered it was a buness of the United States, and that he either had, or would settle that business with the Secretary of the Treasury [Page 238] of the United States. He also avered that a person (as a creditor) holding the certificate, had it in his power to do it, knowing that the suspension of interest was the only difficulty, and that that would only take place until certificates of the United States were rendered.
This was the substance, I do not recollect the precise or specific terms.
Ques. You mention that you stopped some warrants —relate that circumstance.
Ans. I stopped them in consequence of a conversation with Mr. Dallas.
Ques. by Mr. Tilghman. Where did the conversation with Mr. Nicholson take place?
Ans. I believe in my office. I think I had a conversation with him at his office door in consequence of receiving subscribable debt for three per cent. stock.
Ques. How was abstract No. 262 subscribed?
Ans. I recollect, that on receiving a debt, some were subscribable, I made out an abstract in my own name, which I afterwards made over to the commonwealth. I went down to Mr. Smith's, where I subscribed in blank for their amount, the hurry was so great in his office that he could not count them, this was on the 30th of June, as soon as Mr. Smith had leisure, some days after, he counted them, and found that they corresopnded with the abstract, he gave his receipt, dated 30th of June, corresponding with the time I had subscribed, which also appears in his report. I think, but will not be positive, that Mr. Nicholson's name was there in blank on the books of subscription.
Ques. Have you the warrants here, which were stopt in your hands?
Ans. Yes—here are four warrants and one certificate.
Ques. by Mr. Ingersoll. Will it require time to examine, or can you state the amount of all the proper state debt?
Ques. It will require time to examine. (Retires.)
[Page 239]
Thomas Biddle called up, and affirmed.
Ques. Do you know any thing of a certificate brought to the office of the Comptroller-General for exchange, and bought by him. If you do, please to inform the Senate?
Ans. In June 1792 I bought for my father from Solomon Raphael a New-Loan certificate signed by Nicholson and Rittenhouse, being one of those commonly called New-Loan, in the name of John Thompson. Three year's interest had been paid by the state on the certificate, and it was one of those endorsed between Sept. 1777 and March 1778—and bore interest on the nominal sum. The next day I sent Jesse Morris, a young man who lived with my father, to the State-Treasury, to receive the interest due thereon, he soon returned and informed me some difficuly occured respecting it, that Mr. Febiger had stopped the certificate, and had sent Mr. Reilly his chief clerk to the Comptroller with it.
I therefore went to the Comptroller's office, met Mr. Reilly on the stairs, and he returned with me to Mr. Nicholson's room.
I was informed more fully of the circumstances by the Comptroller-General. I then recollected to have seen this described in an advertisement on a file of stolen and lost certificates usually hung up in Mr. Nicholson's office; and likewise in the neswpapers. I enquired of Mr. Nicholson whether any loss respecting this certificate would accrue to Mr. Biddle.
Mr. Nicholson informed me that in a former case of the like nature, the person who held them, had amicably settled the matter, and letters were sent to Thompson respecting the certificates; likewise that he believed it would be no injury to Mr. Biddle, as it could be exchanged.
Upon this I turned to Mr. Nicholson's desk, took a blank exchange and filled it up, describing this certificate of Thompson's, which I purchased of Raphael, the business rested here, and I went home, and left both the certificate and exchange with Mr. Nicholson.
[Page 240] Ques. Did or did not the Comptroller mention to you that the continental certificates for these were not in the office?
Ans. Yes he did, adding that they were loaned on bond to Thompson.
Ques. Can you describe it?
Ans. No, it is now a long time ago, I can't describe the certificate, the bill of parcels, which I got from Raphael, and the papers were lost during the disorder, and thereby the whole of the facts are deranged.
Ques. Do you recollect the date of either September 1777, or March 1778, to be endorsed.
Ans. Yes—and I wrote to Mr. Nicholson by the direction of my father the 5th day of July, 1792, who had been wholly interested in this business. (Retired.)
Clement Biddle, affirmed.
I had been in the habit of purchasing New-Loan certificates and entrusted that business principally to my son, about the latter end of June, 1792, I saw by the bills of parcels, that my son had purchased a New-Loan certificate from S. Raphael, who frequently brought in certificates, which I purchased from him at their current value; same time I observed that one year's interest was due, not apprehending any difficulty, I sent it to the Treasury to draw the interest.
Either that day, or the next, I do not recollect which, my son mentioned the circumstances, and the difficulty in the payment of interest, and exchange,—after which, on conversing with some friends, and considering the law, and knowing that it was payable to bearer; I was convinced that I could not suffer, the state had indemnified the holder, it must be exchanged, the law was passed, the state must make it good.
A few days after, not immediately, I came to Mr. Nicholson, and had, I believe, two opportunities, and spoke to him before the state-house; and I urged the exchange as there could be no exception to my right, he seemed to admit my right, but mentioned that he [Page 241] had or must first write on the occasion, to Mr. Thompson, from whom it had been stolen. I mentioned the inconvenience arising from delay, and to the best of my knowledge, was turning off with an intention of going home. After I mentioned that, he answered, and proposed to give me the parts in stock, and to take it himself, which I considered as an accommodation, and by recurring to my letter book of the 5th or 6th July, I find that I wrote a letter or directed my son to do it, that I was obliged by his offer, and requested him to to take the certificate and to transfer the parts which the same would yield; by recurring I find the certificate was for 800 dollars nominal amount subject to depreciation between September 1777, and March 1778, and three year's interest paid. I sent up that note: in a few days, and in the course of business I received the stock agreeable to the amount, I do not recollect the parts in stock. I had no idea then that New-Loans were subscribable, nor for some time after.
Ques. by Mr. Wilcocks. You say that Mr. Nicholson offered the parts in stock?
Ans. If I had exchanged them I should have received original Loan-Office certificates on paying the interest or an equivalent in Indents, I should then have loaned them, and received the stock in 6, 3, and Deferred, which Mr. Nicholson transferred to me, and this I considered an accommodation in point of time, in going to the office, and usual routine of this business. When I urged my right, and desired an exchange, he offered to take it upon himself, and to transfer the parts, I had no idea for what purpose, or for what object?
Ques. Do you know the date of your letter to him?
Ans. Yes; the 5th or 6th of July.
Ques. Do you know the difference between the value of the parts you received and 20ʃ in the pound, was it 25 per cent?
Ans. I can't tell, can't ascertain, I don't think it near that, I do not know, but will make up an account, sign it, and send it.
[Page 242] Ques. by Mr. Ingersoll. Did you take up that certificate out of the office, or custody of the Comptroller?
Ans. I did not.
Ques. Was it the same day, or the day after your son mentioned the difficulty, that you went up to the Comptroller-General's office?
Ans. It might be a week thereafter, or longer, I cannot ascertain. (Retired.)
Jesse Morris, affirmed.
I took a certificate from Mr. Biddle's to Col. Febiger's, where I presented it to Mr. Reilly, who took it from me, kept it, and carried it to the office of the Comptroller-General, I left it with Mr. Reilly, and went home, to inform Mr. Biddle of the difficulty, which occurred. I do not know the time.
Ques. What passed at Febiger's?
Ans. I gave the certificate to Mr. Reilly. (Retired.)
Mr. Philip Reilly, sworn.
Ques. Do you recollect Mr. Morris coming to you with a certificate.
Ans. Yes; the latter end of June, 1791, or beginning of July, 1792 I should say, a young man came from Mr.Biddle's with a New-Loan certificate for £.300, on looking over the certificate, I immediately knew it to be one of those stolen from John Thompson of Buck's county, the number was in the act of Assembly, Sept. 30th, 1791, for the relief of Thompson and others, (Here Mr. Reilly read a part of the act, when Mr. Rawle told him never mind it.) The State-Treasurer being out of town, I doubted whether I should pay the year's interest or not, and therefore went to Mr. Nicholson's office, and asked him whether I ought to pay it or not, observing at the same time, that it was one of those stolen from J. Thompson, which Mr.Nicholson also recognized; he told me that he would take the Attorney-General's opinion, and if that young man would call in the afternoon he would let him know about the interest.
[Page 243]And I never knew any thing more about it until I saw it in one of Mr. Nicholson's abstracts.
Ques. by Mr. Ingersoll. Was that abstract blank?
Ans. I went down to Mr. Smith's, and found Mr. Nicholson's name in the subscription book, no sum, the blank was not filled up.
Ques. What time was it?
Ans. I think it was the latter end of June.
Ques. Was it before or after you discovered that Mr. Nicholson had subscribed New-Loan certificates that you saw this blank subscription?
Ans. It was seven, eight, or ten days before it was generally known that he had subscribed New-Loans.
Mr. Rawle called Mr. Reilly back, and asked him, Did you deliver the New-Loan certificate into Mr. Nicholson's own hands?
Ans. I did. (Retired.)
Mr. John Oldden, affirmed.
Being then desired to proceed, he said, as it is a good while since these transactions had happened, and as my memory may fail, I had rather answer questions.
Mr. Oldden was then desired to inform the Senate what he knew about this business, or had you any New-Loan certificates in the year 1792?
Ans. Yes; on or about the 4th of July, 1792, I had a number, suppose about seven or eight hundred odd pounds in New-Loan certificates, I, according to the usual practice made up an abstract, and took them to the Comptroller-General's office to be exchanged, presented the abstract and certificates in due form, and left them with the Comptroller as it was usual on such occasions.
Ques. by Mr. Lewis. For what purpose?
Ans. After presenting them, I expected the original Continental certificates in lieu of them, I asked when I might get the Continental certificates, the answer, as well as I can recollect, was, that I should have them the next day about the same hour, it was then about 12 o'clock. I went up the next day—(Mr. Oldden was [Page 244] desired by Mr. Lewis to tell what passed in the mean time.) On the evening of the same day, I received a letter or note from the Comptroller, which note is lost, the purport of which was, that he would pay me an equal proportion and quantity of 6, 3, and deferred stock, and arrearages of interest for them, take the certificates himself, and save me the trouble of funding the Continental ones.
To this note I returned no written answer, but told the bearer that I would see the Comptroller the next morning and would complete and finish that business, and so the matter rested.
I saw the Comptroller the next day, I fancy, it must have been in the mean time, an idea struck me, that he could pay them into the Land-Office, and intended to ask him something more, don't know whether I went up twice or thrice, still not ready; and when I did the last time, I told him, if he would give me thirty dollars beyond what their value was, as I supposed they would be of more use to him, he should have them. To this proposal the Comptroller agreed, transferred the stock to me at Mr. Smith's, and gave me a check on the Bank of the United States for 155 dollars and 85 cents, and 30 dollars for my good will of the certificates, being in the whole one hundred and eighty-five dollars and eighty-five cents.
Ques. When you offered the certificates to the Comptroller for 30 dollars, did the Comptroller tell you it was too late?
Ans. I do not recollect, not certain, that any such thing was mentioned, it is a long time ago, the arrearages of interest and thirty dollars constituted the sum for which he gave me a check, and that was on the 7th of July, 1792, this I know from an entry in my memorandum book, the only written account, which I have of this transaction.
The abstract No. 262, was looked for, found, and shewed to Mr. Oldden, and he was desired to inform the Senate whether his certificates were in it; he directly [Page 245] pointed to the eleven last certificates and said these are the certificates to which I referred in my testimony.
Ques. Did you see the abstract No. 262, in Mr. Smith's office or elsewhere?
Ans. No—I never saw that abstract until I had been called before the House of Representatives last year.
Adjourned until 11 o'clock the next day.
In the minutes of the House of Representatives the following entry is recorded:—
"In conformity to the resolution of the 25th instant, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"After some time,'
"The committee of the whole returned.
"The Chairman then left the chair and the Speaker resumed it.
"The Chairman then informed the House that the committee of the whole had attended the trial of John Nicholson, Comptroller-General.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General reported that they had made further progress."
Fourth day of the trial. SATURDAY, MARCH 1.
SENATE met pursuant to adjournment.
Mr. Morgan apoligized for the unavoidable necessity they were under of postponing the trial, as it was out of their power to proceed to the 6th and 7th articles of impeachment as the testimony of two persons are closely connected, one of them was seriously indisposed, to procure whose testimony they had taken preparatory [Page 246] steps, one of them, Mr. M'Connell, could be procured, the other, Mr. M'Clenachan was very sick and could not venture out, that measures were taken to have his testimony by Monday next, and observed that he expected this would be acceptable to gentlemen on the other side, as an amicable spirit of accommodation seemed to prevail among the parties concerned in managing this important trial.
Mr. Tilghman observed that he had no objection to the postponement for the reasons adduced by the gentleman manager, but he entertained some hopes that Mr. M'Clenachan's indisposition was not so great, but that he would attend, should the case be otherwise, and that he could not attend personally, he had no objection to to have his testimony taken in the manner proposed by Mr. Morgan.
Adjourned until Tuesday next 10 o'clock.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolution of February 25th last, for the purpose of attending the trial of John Nicholson, Comptroller-General.
"The House resolved itself in a committee of the whole,
"The Speaker quitted the chair and Mr. Erwin was placed therein.
"The committee then proceeded to the Senate-chamber for the purpose aforesaid.
"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended at the trial of the articles of impeachment against John Nicholson, Comptroller-General.
"The committee appointed to manage the trial on the articles of impeachment of the House of Representatives, [Page 247] against John Nicholson, Comptroller-General, reported further progress.
Fifth day of the trial. TUESDAY, MARCH 4.
SENATE met pursuant to adjournment.
Mr. Morgan,
Mr. Speaker and Gentlemen of the Senate,
Having gone through the five first articles of impeachment against the Comptroller-General of this commonwealth, it now remains for me to go on to the 6th and 7th articles, to understand these two, a considerable scale of important facts and corroborating testimony must first be attended to—If I have shewn that the Comptroller's opinion was, long before the passage of the Act of March 1789, that the New-Loans ceased to be a State debt, it will render his conduct more criminal, a retrospective view of a past transaction will add some information to what has been already advanced: in one of his reports on the state of the finances, dated October 1, and December 11, 1790; he had stated what debts were valid against the commonwealth and what were not.
Here Mr. Morgan read the report page 385, in the appendix to the minutes of 1790, containing what debts were to be discharged, and what were valid, agreeably to the report of the proper officers; that the present constitution allowed of no draughts from the Treasury except by previous appropriations made by law. But in page 389 in the 7th article of the finances are several subdivisions, wherein the amount of the principal and interest of the New-Loans are defined, and excluded from redemption in the Land-office, whereby they cease to be and are no longer a debt of the state. This is explained in express terms, page 395 that New-Loans were then excluded. Here then we rest our testimony [Page 248] of the five first articles, these are objects of our accusation for plain and obvious reasons.
We now come to objects of greater moment, to impeachments of a deeper dye, as the articles are of greater magnitude the punishment is to be severer, inasmuch as the Comptroller as a faithful guardian to preserve the property of the public, did not lay his hands on the treasures of the commonwealth, for the purpose of saving the same, but made his official duty subservient to speculation. If the testimony already exhibited and arguments adduced, has made equal impression on the Senate as on the managers and on the House of Representatives, who are his accusers, the articles of impeachment will have the effect which the law and constitution require. (Here Mr. Evans assisted Mr. Morgan in arranging the papers and preparing the parts to be read.)
Among the various persons who came to the Comptroller's office to loan their certificates, we find the name of Hans Hamilton, in different progressions, and if I am RIGHTLY INSTRUCTED it will be proved that Loan-office certificates of the United States and New-Loan certificates were deposited with Mr. Nicholson, and both ultimately subscribed to the Loan of the United States.
It remains with the Comptroller-General to account for that procedure, if the Act had required the same Continental certificates to be returned, the case would be plain, and owing to the circumstances of both, the New-Loans and the other certificates having been subscribed by the same person a presumption is raised; and he should shew why they had not taken different courses. The moment that they ceased to be private property, they immediately became the property of the commonwealth, for the New-Loans and the Continental certificates could not be public and private property at one and the same point of time, yet both have been subscribed.
In the list of New-Loans certificates originally issued, book A, page 129—a certificate of £. 11:16, No. 4051, [Page 249] issued to Hans Hamilton, same page, No. 4052 for £. 268, No. 4053, £.242:7:6 making in the whole £. 522:3:6.
In the next Book A, stating what Continental certificates were received for the New-Loans issued, from which it will appear a small error of 2ʃ3 only excepted, that they agree exactly. Continental certificates with their numbers, &c. are as follows:—
No. 8316 | Dolls. 31 42 | |
8317 | 714 60 | |
8318 | 212 36 | Interest 1st May, 1781. |
8319 | 60 68 | Interest March, 1780. |
8320 | 32 60 | |
8321 | 78 76 | |
8322 | 70 60 | Interest November, 1780. |
8323 | 191 | Interest Aug. 27, 1781. |
| 1392 02 | |
These last have been subscribed by the Comptroller-General in the name of Hans Hamilton.
To prove that the Continental certificates thus deposited exactly corresponded with the New-Loans, I have in my hand a certificate from the Register of the Treasury signed by Joseph Nourse, March 4th, 1794, by which it appears that the Comptroller-General had subscribed by the Act of August 4, 1790, the certificates issued as aforesaid.
It thus appears, that the first therein, corresponds exactly with the second in the other, in numbers, names, dates, commencement of interest, and total amount; the correspondence between them is best ascertained by going over the abstract, and examining the same, and, by comparing it with the Comptroller's books. I will now proceed to shew the New-Loans were also subscribed—
No. 4151 | Hans Hamilton | £.11 16 0 |
4152 | do. | 268 0 0 |
4153 | do. | 242 7 6 |
These three last contain the whole of the Continental certificates in the above statement; so that it appears [Page 250] Hans Hamilton came forward and had New-Loans issued for his Continental ones, two evidences of the same debt—this inconvenience would not have happened if the intention of the Legislature had been pursued. After the law of 1789 the New-Loans were only a receipt or claim to get back the Continental certificates; by this means a duplication of debt had been brought against the United States, contrary to what the Union and Pennsylvania had contemplated. This is the only testimony now in our power, it remains with the Comptroller-General to shew and explain; it is manifest that we had two debts instead of one, the certificates of the United States and those of Pennsylvania, it is in his power to satisfy the Senate if his books were kept in the manner in which they ought to have been—if this transaction is not cleared up, the presumption is that something is unfair and unworthy of this officer.
To shew however by as direct testimony as the circumstance of this case will admit that the Comptroller-General has made use of certificates brought to, and deposited with him for re-exchange which he afterwards subscribed to the Loan of the United States.
The circumstances which both points are briefly to prove, are these; that Matthew M'Connell furnished or sold a certificate for £. 3275:19:4, to Blair M'Clenachan, which is among those subscribed by Mr. Nicholson in his grand abstract. The presumptive testimony will be strong, that the Comptroller received this certificate in his official capacity, and that he afterwards took it to his own use: The first witness whom we shall call on this subject is Matthew M'Connell.
Mr. Matthew M'Connell, sworn.
Ques. Did you ever sell or transfer that certificate or one of a similar amount, to Blair M'Clenachan?
Ans. I delivered a certificate of the same amount with the one, now, in my hand, to Mr. M'Clenachan, viz. for £. 3275:19:4, on the 23d day of April 1788, as appears by an entry in my books.
Ques. Do you recollect whether it was in your name?
[Page 251] Ans. It appears from the entry that it was in my own name, neither number nor date is recollected by me, nor mentioned in my memorandum-book.
Ques. Was it paid or sold to Mr. M'Clenachan?
Ans. It was delivered to Mr. M'Clenachan agreeably to an engagement or contract, he delivered me some certificates for which I was to deliver a certain quantity of another kind to him.
Question by one of the counsel for the defendant. When did this happen?
Ans. I delivered him more certificates at the time alluded to, and afterwards.
Ques. How long afterwards?
Ans. I hold in my hand a list of sundry certificates which I had delivered to him in 1788—amount not cast up, they are extracts of entries from my books. This list I delivered the House of Representatives last summer. The first parcel was delivered in the year 1788— I do not know when I delivered those in 1789.
Mr. Tilghman requests to have the list—Mr. M'Connell retired.
Mr. C. Febiger, sworn.
Mr. Morgan stated what this witness was to prove; —that on the 15th Sept. 1790, Blair M'Clenachan received the interest, first came to have the certificate entered, there had been no money in the Treasury when he came, the first time; made the following entry on the stairs, viz. £. 3275:19:4, on the 15th Sept. 1790 he received £.150 on account of interest. The entries were made in the books March 6th and 11th 1790.
Question by the Speaker to Mr. Febiger. Are persons under any difficulty in getting their money out of the Treasury?
Ans. Money is not always in it.
Question by Mr. Ingersoll. Was the sum and number entered in your books when the identical certificate had been before your view from which you might conveniently enter the same?
Ans. The certificate was entered the 11th March 1790.
[Page 252] Question by the same. I observe on the preceding page of your book the date March 6th 1790, and it then continues three pages and the date is March 16th 1790?
Ans. The money was paid and receipt given Sept. 15th 1790.
Question by Mr. Lewis. Had Mr. M'Clenachan the certificate with him when he received the interest?
Ans. No.
Mr. Hilary Baker, sworn. (Gallery of the Senate very thin.)
His deposition amounted to this; that he saw Blair M'Clenachan on Saturday the first of March instant, appeared to be much afflicted with the gout, that he was rolled about in an armed chair, from one part of his room to the other, that in every other respect he appeared to be in good health; the deponent left Germantown early on Sunday morning before Mr. M'Clenachan was up.
Mr. Evans, one of the managers, observed that B. M'Clenachan, the witness, was summoned by Mr. Martin, the Serjeant-at-Arms of the House of Representatives, and wished to have him sworn, he was called, some delay occurred whilst the Senate waited for him, after some time he came forward, and was sworn. His deposition was, that he had seen Mr. M'Clenachan at his house in Germantown the 25th of last month, shewed him the summons, which required his attendance before the Senate, that he attentively read the same, and told Mr. Martin, that he communicated all that he had to say on the subject, to Mr. Morgan, Mr. Evans and Mr. Bowman, in the presence of Mr. Nicholson, that he was glad Mr. Nicholson had been there, that he (Nicholson) might know that there had been no undue means used against him: that his hands and feet were swelled, was rolled about in an arm-chair thro' the room; that he would not keep the writing but desired the Sergeant to take it with him; adding you may perhaps have occasion to present it when you'll have to render an account of this business.
Mr. Morgan observed, how they had taken all means in their power to procure the viva voce testimony of the [Page 253] witness, was proceeding to read the interrogatories and answers. Whereupon the Speaker asked him was it by the unanimous consent of the defendant's counsel—and being answered in the affirmative, he then stated how the commission issued to the two magistrates, &c. and began the reading as herein after set down, Mr. Rawle read the interrogatories, Mr. Morgan the answers.
To the honorable the SENATE of the commonwealth of Pennsylvania,
WE the subscribers, appointed to take the answers of Blair M'Clenachan, Esq on oath to several interrogatories committed to us in writing, to be proposed to him, relative to an impeachment made before your honorable House by the honorable the House of Representatives of the commonwealth aforesaid, against John Nicholson, Esq Comptroller-General of the said commonwealth, do respectfully certify that on this first day of March, Anno Domini one thousand seven hundred and ninety-four we repaired to the dwelling house of the said Blair M'Clenachan at Germantown, in the county of Philadelphia, and communicated to him the several interrogatories aforesaid, which are hereunto annexed; and that the sold Blair M'Clenachan then and there, after having carefully and attentively read, examined and considered the said several interrogatories, did on his solemn oath on the Holy Evangelists of Almighty God, to him by us duly administered, declare unto us his answers to the said several interrogatories in the words following—that is to say:—
Inter. 1. on behalf of the state. Were you at any time proprietor of a New-Loan certificate issued by the State of Pennsylvania to the amount of £. 3275:19:4?
Ans. 1. It is probable that I had a certificate of that amount, but I cannot be certain thereof as I had several large ones, and did not make out any account or list of my certificates when I delivered them to Mr. Nicholson; but it may probably be found on examining the books of Mr. Rittenhouse, the late State-Treasurer, what certificates I received interest on.
[Page 254] Inter. 2. Did you sell or lend such certificate or deposit such certificate, at any, and what time, with, or to Matthew M'Cornell?
Ans. 2. I never, to the best of my knowledge, either sold or lent to, or deposited with Matthew M'Connell a certificate of the amount of £. 3275:19:4, but I did lend him a number of small certificates, (amounting in the whole to upwards of £. 3000) a considerable time before I delivered my certificates to Mr. Nicholson,— my son will furnish you with the exact sum from a memorandum made by me in a book at present in his possession.
"I HAVE sent you the memorandum of those certificates which my father lent to Mr. Matthew M'Connell, it is in his own hand-writing, and the leaf which I enclose containing the whole sum.
Sir, your ob. servt. GEO. M'CLENACHAN.
Certificates lent Matthew M'Connell, Broker, Second-street.
No. 17795 | January, 85 | £.1350 0 0 |
2353 | November, 84 | 328 9 9 |
13285 | January, 85 | 169 17 6 |
16864 | do. 85 | 201 11 3 |
11940 | do. 85 | 99 11 3 |
13065 | do. 85 | 6 11 3 |
12616 | do. 85 | 44 8 7 |
16935 | do. 85 | 203 12 6 |
13719 | do. 85 | 228 6 1 |
16863 | do. 85 | 398 8 9 |
| | £.3030 17 0 |
The above certificates delivered to Mr. M'Connell the 30th of March 1789, to be returned when demanded."
Inter. 3. Did you afterwards, and at, or about what [Page 255] time receive such certificates back from Matthew M'Connell?
Ans. 3. As I did not lend Mr. M'Connell a certificate of £.3275:19:4 I could not receive one from him in return—the amount of the small certificates which I lent him, he did return to me.
Inter. 4. Did you take such certificate to the office of the Comptroller-General for exchange pursuant to Act of Assembly of March 27, 1789?
Ans. 4. I took all the New-Loan certificates that I possessed (which were to a very considerable amount) to the Comptroller-General and delivered them to him to be exchanged, without having made any list or account of them.
Inter. 5. Was such certificate exchanged by the said Comptroller-General, and did you receive in lieu thereof Continental certificates of equal value to the same as those you originally loaned to the State?
Ans. 5. I received from the Comptroller-General Continental certificates, to the full amount (as I suppose and as he informed me) of the New-Loan certificates which I had delivered him.
Inter. 6. Did you ever sell any certificates to John Nicholson, the Comptroller-General or any other person?
Ans. 6. To John Nicholson I never sold any certificate, to others I did sell.
Inter. 8, proposed on the part of the defendant. If the answer to the 4th interrogatory on the part of the commonwealth should be in the affirmative, at what time did you take such certificates to the office of the Comptroller-General for exchange pursuant to the Act of Assembly of 27th of March, 1789.
Ans. 8. I took no account of either the number or value of the certificates, nor of the time of delivering them.
Inter. 9. If the answer to the first part of the fifth interrogatory on the part of the prosecution should be in the affirmative, at what time was such certificate so exchanged by the Comptroller-General?
[Page 256] Ans. 9. I cannot tell.
Inter. 10. If the answer to the latter part of the fifth interrogatory aforesaid should also be in the affirmative, at what time or times did the same take place, and whether the certificates were received by you at one time or oftener, and whether the certificates you so received were all those for which your New-Loans had been originally granted, or whether they were all at the time of such delivery, and until received by you, the property of the State of Pennsylvania, or whether any part of them were, or were not at the time, as aforesaid, the property of Mr. Nicholson?
Ans. 10. I do not recollect whether I received them all at one time or oftener.—Of the certificates dated between first September 1777 and first March 1778, I believe I received back the identical certificates for which New-Loan certificates had been granted—but as to those of other dates, I cannot tell; and until I received those certificates in exchange for the New-Loan certificates, I considered them as the property of the State, and no part thereof whatever as the property of John Nicholson.
Inter. 11. If the answer to the 6th interrogatory should be in the negative, did you never barter nor commute with Mr Nicholson New-Loans for other certificates, if you did so barter or commute, set forth the particulars at large how, when, and for what?
Ans. 11. I never bartered nor commuted with John Nicholson any New-Loan or other certificates in the whole course of my life.
Inter. 12. Did you or did you not, and if so at what time inform Mr. Nicholson that you wanted to raise some money out of certificates, but that you were determined not to part with the principal at less than 20ʃ per pound, that you did not expect the interest or indents would appreciate so much, and did you or did you not then ask him to give you a sum in indents for said purpose, and if so, how much and what amount of interest thereon, and where did this take place—and [Page 257] were there New-Loan certificates accompanied with the usual abstract or account for exchange, and did you, or did you not apply to Mr. Nicholson the same time for indents, before you received the Continental certificates, and if so at what time, and did he then give you a further sum of indents on account, and if so what sum, on what account, and how did you dispose thereof.
Ans. 12. When I delivered my certificates to Mr. Nicholson, there were many persons from the country at his office, desirous of having their business speedily done—I told Mr. Nicholson I was willing that the country people should be first served, and that he might settle mine at his leisure, but as that would probably take up some time, I requested him to furnish me in the mean time with some indents on account, to which he assented, and I received indents from him at several times before I received the Continental certificates, but do not recollect the amount of the indents received at any one time, nor in the whole.
Inter. 13. Did or did not he, Mr. Nicholson, at your first application mentioned in the last preceding interrogatory inform you, that if the said New-Loan certificates were to be exchanged with the state you would have indents to pay and not to receive—and did he, or did he not say that he would notwithstanding accommodate you with the sum you wanted, in indents, on account of the same New-Loan certificates—and did he or did he not deliver you a sum at that first time aforesaid in indents, and if so, how much and in what manner did you dispose thereof?
Ans. 13. On the final settlement of my account with the state, a balance of 4146 dollars and 24 cents in indents appeared against me, which in the summer of 1793 I requested Mr. Nicholson to pay to the State on my behalf, and by his account rendered me, it appears that he has done it.
Inter. 14. Did you or did you not at that time receive the Continental certificates therefor equivalent, and did you or not at a subsequent period, and if so [Page 258] at what time thereafter apply at the office of the Comptroller-General with the remainder of your New-Loan certificates, and did or not the Comptroller-General receive them, and set down with you in his office and prepare an account thereof for exchange, and does the account numbered 1838, and 183, and 184, herewith presented to you, appear to be the same accounts, and did you, or did you not then request him to draw the indents for you, which after exchange would be receivable on your Continental certificates, and did you, or did you not receive those certificates afterwards, and if so, at what time?
Ans. 14. I recollect that I requested Mr. Nicholson to draw the indents on my account from the United States, which he did, but the time I cannot recollect.
The remainder of this interrogatory is answered by my answer to the 10th interrogatory.
Inter. 15. Did you, or did you not afterwards, and if so at what time apply to Mr. Nicholson to pay in your behalf the balance of indents or 3 per cent. stock, which still remained due by you to the state on the exchange mentioned in the last interrogatory, and to what amount, and did he or did he not inform you he would do so—and hath he or hath he not since rendered you an account thereof.
Ans. 15. The answer to this is contained in my answer to the two last preceding interrogatories.
Inter. 16. Was there a considerable time between the time of exchanging and also between the time of funding your different certificates—and if so, how long?
Ans. 16. I cannot recollect.
Inter. 17. Have you any account of your New-Loan certificates to which you can refer; or hath this transaction rested only on your memory—have you kept a regular account of your New-Loan certificates, and how, to whom and at what time, and for what were they disposed of, if any, produce the same, and annex them to your answers.
[Page 259] Ans. 17. I kept no account whatever of, or concerning my certificates.
Inter. 18. Hath your memory at all times since you have been called to answer to these points uniformly retained the same view of them?
Inter. 19. Did you, or did you not at any time since you gave your testimony on this subject to the late House of Representatives express to any person an idea that you had forgotten said testimony, and your apprehension that if you said any thing on the subject, it might be inconsistent with some part of the evidence you had so given?
Inter. 20. Do you know in what manner you became possessed of each and every of your other New-Loan certificates, or any of them, if so, name the certificates, of whom purchased, or commuted, and when?
Inter. 21. If the answer to the first interrogatory be in the affirmative, when and of whom did you purchase the certificates therein mentioned, and how did you become possessed thereof?
Ans. to Inter. 18, 19, 20, 21. These four interrogatories I conceive are not entitled to answers.
☞ The first 6 interrogatories and answers were on behalf of the prosecution—from thence to this, are interrogatories for the defendant.
Inter. 7 for prosecution. Did you not exchange several New-Loan certificates at different times at the Comptroller-General's office? Were or were not the papers termed "exchanges" always filled up on such occasions? Did you on such occasions sign a receipt in a book for the Continental certificates you received, do the exchanges annexed to the present interrogatories numbered 1838, 183, 184, contain an account of all the certificates exchanged by you at the said office, or did you exchange others not included therein?
Ans. 7. I do not recollect having given any receipt to Mr. Nicholson. The answer to the remainder of this interrogatory is contained in the foregoing answers.
Inter. 8. If you did exchange New-Loan certificates [Page 260] other than those mentioned in the said abstracts numbered as above, is the annexed New-Loan certificate numbered 17748 for £. 3275:19:4 one of those which you did so exchange, and is it the identical certificate to which you refer in your answer to the first interrogatory?
Ans. 8. The answer to this is contained in the answer to the first interrogatory.
Inter. 9. If you answer the second interrogatory in the negative, did you or did you not lend any other certificates of New-Loan to Matthew M'Connell, and at or about what time?
Ans. 9. The answer to this is contained in the answer to the second interrogatory.
Inter. 22, pro defendant. If the answer to the first member of the 7th interrogatory on the part of the prosecution be in the affirmative, at what times were those respective exchanges made, if the days or months or years be not remembered, attach to it the time as near as you can to the beginning or end of the first loan of Congress, and the distances of time between those exchanges?
Ans. 22. Having kept no accounts concerning my certificates I cannot recollect the times.
Inter. 23, pro defendante. Did you or did you not hand to Mr. Nicholson when you were with him on the street in the city of Philadelphia some New-Loan certificates, and if so, what numbers, amount, and sums respectively, and also at what time, and what request did you then make of Mr. Nicholson?
Ans. 23. I do not recollect having delivered Mr. Nicholson any certificates at any other place than in his office—nor do I remember having made any request of him except what I have before mentioned concerning the indents.
Inter. 10, for prosecution. Do you know any thing further that may be material in the cause? If yea, relate the same as fully as if you were particularly interrogated thereto? JARED INGERSOLL.
[Page 261] Ans. 10. I have only to observe, that after the funding law of this state was passed in 1785, I took all the Continental certificates I was possessed of, without knowing either the number, or amount of them (as I had no account of them in my books) and without making any list of them, delivered them to Mr. Nicholson to have them funded:—and after the law of 1789 I delivered all my New-Loan certificates to him in the same manner, to have them exchanged, without knowing either the number or value of them—placing the highest confidence in Mr. Nicholson's integrity.
The truth of which several answers the deponent further corroborates by letting his name hereunto.
BLAIR M'CLENACHAN.
In testimony whereof we have hereunto set our names the day and year first within written.
- HILARY BAKER,
- JACOB SERVOSS.
☞ The committee of Accounts of the House of Representatives reported on the 22d April, 1794, eleven dollars and 57 cents to Mr. Baker, and eight dollars to Mr. Servoss for taking the deposition of Blair M'Clenachan, and for their expences to and from Germantown.
Mr. Morgan then read the following account:—
"Blair M'Clenachan to John Nicholson, Dr.
"A balance due in indents on exchange thereof with the state per account March 27th, 1789, and which he paid to the State July, 1793
| 4146 24/100 |
at 9ʃ6 per pound | 1969 45 |
Arrears of interest from Jan. 1791, 2 ½ years | 51 82 |
| 2021 27 |
A true copy of John Nicholson's account rendered to me BLAIR M'CLENACHAN."
[Page 262]Mr. Morgan observed that having now closed the testimony he wished to be indulged with a patient hearing whilst he took a short review of all the articles of impeachment, stating that the four first were nearly alike; the first of which related merely to Mr. Nicholson in his official capacity, certifying that certificates were due and owing from the state which did not exist as debts—that this hath been done is apparent and obvious, that loss and injury hath accrued to the commonwealth, is likewise manifest, from the calculations which have been offered. I hold in my hand (said Mr. M.) a calculation which will, if wrong, be combated in his general defence, wherein the whole loss on this point sustained by the public amounts to £.5187:6:7½.
The calculation as follows,
22499 | | |
2 | | |
44998 | | |
14999 6 8 | | |
2 | | |
29998 13 4 | | |
9999 11 1⅓ | 6 p. cent. at 20ʃ | £.9999 11 1⅓ |
4999 15 6⅔ | deferred at 12ʃ6 | 2812 6 11⅔ |
7499 13 4 | 3 per cent. at 12ʃ | 4499 15 4 |
| | 17311 13 4 |
| Deduct | 22499 0 0 |
Loss to the State * | | 5187 6 7¾ |
[Page 263]The second and third articles are fully proved by the abstracts and other official documents which had been produced, and by the same testimony with the foregoing, all as fully as the nature of the case could admit.
The fourth article is rather a deduction from the other three, by his certification he contemplated the withdrawing a large sum of money from the Treasury without any previous appropriation, by which 63,000 odd dollars were drawn from the coffers of the state— which is contrary to the Constitution of this commonwealth, and a charge of high misdemeanor against the defendant.
[Page 264]The evidence in support of the fifth article is full and explicit. He purchased by himself or agents, as well from those who came to the office, as from others, that all [...] [...]he the testimony of Mr. Oldden confirms, he went or sent to the office, a certificate was left by Mr. Riley, Mr. Nicholson sent proposals to Oldden, at length Mr. Oldden consented, and sold his certificates, these transactions and other testimony come fully to the point. Mr. Oldden's testimony will also apply to the sixth and seventh articles. (He read the sixth article.) These are more criminal than the preceding ones; M'Clenachan's testimony will apply to these, the certificates became the property of the state the moment they were placed in the hands of the Comptroller-General. They were neither the property of Oldden, M'Clenachan, or John Nicholson. None of those persons could use them for their own purposes. If he hath converted them to his own use, he has done a great injury to the commonwealth, and it is a bad precedent. (Here he read the seventh article.) From all which it is plainly proved that he is guilty, that all this had been done is manifest from his abstracts in his own hand writing, from oral and written testimony, from the warrants presented to and paid by the Treasurer, the state sustained an immense loss—which loss, though great, the inconvenience is still more considerable. (He then read the letter, page 102-3.)
Here (Mr. Morgan observed) the Secretary entered into a disquisition of those measures adopted by the states, who have issued their own certificates—in which case he ordered the payment of interest to be suspended for a time, so that it appears that Pennsylvania, who had issued her own certificates, had been under the necessity of making an arrangement, such as herein set forth, to prevent the payment of interest twice; this measure was not attended to. The Comptroller was well acquainted with it—this alternative occasions a double subscription to compleat the measure, as in the case of Blair M'Clenachan who subscribed his original certificate to the domestic [Page 265] loan, and the Comptroller subscribed to the state loan.
Thus the Comptroller-General has drawn sixty-three thousand, odd hundred dollars, without any previous appropriation from the Treasury of Pennsylvania, by which she has lost above five thousand pounds specie; because the Continental certificates are so much less when divided into securities: The difference between twenty shillings in the pound and the current value of the different parts of stock creating that sum.
I will conclude by observing that as it was the public good and not any acrimony against an individual, hath moved us to institute the present prosecution; I hope the decision will be such as the good of the state, public justice and equity require, and that it will be conducted with temper and moderation.
☞ Mr. Morgan sat down, having been on the floor nearly sixteen hours during five days.
Mr. Tilghman observed that the hour of adjournment approached, that it would be better to adjourn, as the time could not be sufficient for him to open the defence, that the view would be broken and disjointed, that the Comptroller had been so busy that the papers were not well arranged, and he expected to have the documents in proper order by ten o'clock the next day.
Adjourned.
In the minutes of the House of Representatives the following entry is recorded:—
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General of this commonwealth, now depending before the Senate, on the articles of impeachment exhibited against him by the House of Representatives.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee then proceeded to the Senate-chamber for the purpose aforesaid.
[Page 266]"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman then left the chair and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended the trial of the said John Nicholson.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General reported that they had exhibited the several charges against him and produced the necessary evidence in support thereof before the Senate."
Sixth Day of the trial: WEDNESDAY, MARCH 5.
SENATE met, court called, &c.
Mr. Morgan rose—
Mr. SPEAKER and GENTLEMEN of the SENATE,
Before the Counsel for the defendant begins, I rise to shew that Mr. Nicholson did not keep his books of exchanges agreeable to the instructions of the Supreme Executive Council, this I think necessary, to shew that if the evidence on behalf of the prosecution is not so compleat as it should have been, it is not owing to our fault but to the defendant's neglect, who did not keep his books conformably to the following instructions.
"In COUNCIL. PHILADELPHIA, Thursday, May 21st, 1789.
Upon the second reading of the report of the committee on the mode of exchanging the New-Loan certificates. It was resolved that the following instructions be given to the Comptroller-General.
[Page 267]"SIR,
TO facilitate the exchange of certificates agreeably to Act of General Assembly of the twenty-seventh day of March last, Council have judged it proper to give you the following instructions, viz.
"1. Every person who in conformity with the said Act shall present to you a New-Loan certificate, may at his option receive from you the Continental certificate or certificates, for which the New-Loan certificate was granted, or receive a like sum of principal in certificates of debts of the U. States, which have been paid into the Land-Office.
"2. When New-Loan certificates have been cancelled and several certificates have been by you given for the amount thereof, to enable the party to make payment to the Land-Office, &c.—and where one or more of the latter shall be presented as part or parts of such New-Loan certificate, the person presenting the same may in lieu thereof receive so many of the original Continental certificates as shall be equal to, or nearest, it, and under the amount of the New-Loan certificates so presented.
"3. In those instances in which it may be impracticable for you to make the exact amount of a New-Loan certificate or certificates with Continental certificates, you will issue a new certificate or certificates, bearing similar interests for the balance or balances.
"4th. In a set of books to be prepared for the purpose, you will keep exact and fair accounts of all certificates you may receive, diliver or issue, with their numbers, principal sums and dates of interest.
"5th. That the balance of interest to be received or paid by the state according to Act of Assembly, may be ascertained, you will calculate the arrears of interest which may be due on all New-Loan certificates you may receive as well as on all Continental certificates you may deliver.
"6th. You will receive indents or facilities for balances of interest as may be due to the state, a [...] [Page 268] of the indents or facilities you have received or may obtain from the United States, upon the Continental certificates in your possession, you will pay such balances of interest as may be due from the State.
"7th. You will keep exact accounts of all indents so received, in books prepared for the purpose.
"8th. If you consider it necessary to your own security or to the regularity of your proceedings in the premises you will demand receipts from all persons to whom you may deliver certificates or indents as well as require vouchers of the certificates or indents which may be delivered or paid to you.
"9th. In the first Wednesday in every month you will produce to Council for their inspection the books in which your transactions relative to the exchange of certificates according to Act of General Assembly of the 27th day of March, 1789, are contained.
"10th. If any difficulty or obstruction should occur in the execution of the duties required of you by the Act above mentioned of the 27th day of March last, or by the foregoing instructions, you will represent the same to Council, that such difficulty or obstruction, if possible, may be obviated or removed.
"You will have the foregoing instructions set up in your office for the information of all persons concerned.
Mr. Tilghman.
Mr. SPEAKER and GENTLEMEN of the SENATE,
When or how impeachments began in England, or for what purpose, and whether this mode, like engines, are made use of for power or faction, is immaterial. Here they form a part of the Constitution of this commonwealth. There hereditary nobility command respect. Here the Comptroller meets the charge, and he is to be tried by his peers. The tribunal is great, and the cause of importance. The defendant meets the impeachment conscious of his own innocence, he never shrunk from it, he at first proposed a question to be argued before the Supreme Court, (see page 82) he is [Page 269] impeached in the name of the people of Pennsylvania, the House of Representatives is the grand inquest of the nation. The Senate will judge without any regard to the impressions made on the House of Representatives. The Comptroller is here in the same situation as any defendant in a common law court. The grand jury found the indictment, the Senate as a jury is sworn to try the indictment. Lord Mansfield's expression on this occasion is worthy of notice, That the juror's mind should be like "blank paper," free from any impressions but that of the evidence. That the late House of Representatives and the Managers were actuated by the purest motives, and the present House also, I have no doubt, but from what source this impeachment springs time only will discover. Public bodies are liable to be acted upon when the object in contemplation is to acquire public good or great public evil; the public good is a fascinating consideration to carry on a prosecution. The good intentions of the House is not doubted, but this goodness might make them liable to be easily acted upon. Popular bodies are easily warped by an artful individual when he meditates the ruin of his neighbour, and impresses an idea on the Assembly that he has the public good at heart.
Objections have been made against commonwealths and popular governments on this account—Socrates and Phocion, some of the greatest men of antiquity, fell thro' the mistaken zeal of popular bodies: no doubt the Assemblies who convicted them, thought that they had condemned them for the public good; and now these Assemblies are cursed and their memory held up to public execration. But no objection with us. The subject on which I have the honor to address you, has not been very familiar to me, having no knowledge of it but what I collected since I have been retained by the Comptroller. Its branches are various, requiring much perspicuity and a thorough acquaintance with the subject. The Comptroller throws himself on the candor of his Judges, he has always acted from a proper construction [Page 270] of the Act, or not. If he has, he cannot be guilty, and it is no proper subject of impeachment, if he had not, it is a subject of enquiry whether such construction was his known opinion or basely contrived. If he put a bad construction on it, we should enquire, Whether the guilt is from the heart or from the head. The consequences are removal from office, utter incapacity to hold any post of honor, profit, or trust—the charges ought to be clear and perspicuous—they are not so perspicuous [the first article read.] There is a point in this article that mentions he did subscribe at various times. I do not know to whom, nor did I know till the opening, there are some certifications, but none in his own case—should there be any obscurity in our defence it is to be attributed to this, to whom did he declare them to be subscribable? it wants certainty.
[2d article read.] "Declare" without saying to whom, total want of certainty, entirely omitting to whom or at what time.
[3d read.] This wants certainty likewise as depending on the first and second, which are in their own nature, uncertain.
The fourth article is stated by the Manager as a deduction from the former articles. If the former articles want certainty, this being deduced will consequently be void of certainty likewise.
The fifth is so vague, it requires no comment.
The sixth read. I confess myself at a loss for the meaning of this charge, whether it is meant that Mr. Nicholson took them without paying value for them, and then subscribed them to the loan of the United States, or whether he did after lodgment pass value for them.
The seventh states more explicitly, but don't express whether Mr. Nicholson paid value for them or not, an exchange is completed, and he subscribed them, I suppose they will explain themselves by and by.
In charges of such serious tendency, the particular objects should be pointed out—That certainty and perspicuity which are so necessary in indictments in common [Page 271] law courts not altogether requisite, that precision and critical nicety required in the courts of Justice would be too much in this particular, but these articles are too vague, too doubtful, too uncertain, we are not bound to answer these charges; the charge must be definite and according to the laws of the land before it can be entitled to an answer. But we will, notwithstanding, proceed to answer them, and if the Comptroller's judgment is right, this honorable court will not hesitate to pronounce him not guilty.
Here Mr. Tilghman shewed that the opinion of Mr. Nicholson was invariable as to the New-Loan certificates being a claim against the commonwealth, and that several other officers were of the same opinion—His opinion on opening the first loan when he had no interest— when this subject was before the Legislature and never doubted until after the passing of the Act of the 10th of April, 1792—and for this purpose he cited the following letters requiring and giving information on the subject of New-Loans.
"SIR,
Philadelphia, Sept. 30, 1790.
"AS I am ordered to receive on loan, certificates of the debt of the State—I shall be much obliged to you to give me a description of the several sorts of those certificates and such checks as will enable me to do that business with security to the U. S.
I am, &c. THOMAS SMITH, Commissioner of Loans."
JOHN NICHOLSON, Esq Comptroller.
"Comptroller-General's office, Sept. 30, 1790.
"SIR,
"I RECEIVED your favour of this date and until I can give you a complete check, have enclosed herewith a blank form of a depreciation certificate, and one of Funded Debt the only two kinds receivable by you [Page 272] under the funding law of the U. S. granted by this state, as it is not presumable the New-Loans will be offered subjected to the restrictions in that law prescribed.
"As the state certificates are only to be deposited with you for loan, not actually loaned till a certain period have elapsed, you will be able to check those left with you more particularly hereafter.
I am, &c. JOHN NICHOLSON."
THOMAS SMITH, Esq Commissioner of Loans Pennsylvania.
Mr. Tilghman then explained the "restrictions" alluded to above by examples of short and long interest.
(CIRCULAR.)
"Treasury Department, June 6, 1791.
"SIR,
IN consequence of an enquiry made of me, I think necessary to inform you that I consider the holders of certificates received from the government of any state, in lieu of certificates of the Federal debt, as having a right to subscribe those state-certificates to the loan of the assumed debt, and I consider the state as having a right to subscribe the Continental certificates which they have obtained by the exchange, to the loan proposed by the Act of the 4th August, 1790; but no interest is to be paid on the assumed debt of the state, either to the state or to individuals, until you shall be informed, that I am satisfied, that all the certificates so issued by the state have been re-exchanged or redeemed, or that all those, which shall not be re-exchanged or redeemed, have been surrendered to the U. S.
"To distinguish in a clear and striking manner this description of New-Loan certificates from all others, I have determined to have a hole, of about one fifth of an inch, cut through a part near the center, being at the end of the blank left for the creditor's name immediately [Page 273] before the word "is" and directly over the letter "t" in the word "amount."
"When the stock represented in these certificates shall be transferred from and to the Loan-offices or the Treasury, the transfer certificates must have this central hole cut or punched through them in like manner.
"In order to full information, on this subject, I request you to transmit to me a copy or sufficient extracts from any laws passed by the Legislature of the state in which you reside, relative to the exchanges of Federal certificates for those of the State, and to the re-exchange of those of the State for federal certificates, in doing which you will be careful to collect whatever there may be. You will also communicate such observations as may appear necessary for the perfect understanding of the course, which the business has taken. I am, &c.
To THOMAS SMITH, Commissioner of Loans.
Mr. Tilghman said, that from this letter it is extremely probable that the law of 1789 was before the Secretary when he wrote that letter, altho' he does not at present recollect it.
Mr. Tilghman then read the following—
"Treasury Department, June 8, 1791.
"SIR,
YOU are right in considering yourself not authorised by law to accept on the loan of the assumed debt certificates of the state of Pennsylvania, dated on or after the first day of January 1790. It is however my wish that you minute in a book to be kept for that purpose the amount of such certificates offered by any person, together with the name of the person offering them.
It will not be proper that you commit the examination and checking of the certificates of the assumed debt to any person who does not actually belong to your [Page 274] office. It cannot be deemed a legal execution of your duty to rely upon any person not duly authorised. You will receive these certificates and give on the delivery of them to you, and before comparison with the checks, a descriptive receipt for them, which will amount to no more than an acknowledgment, that such certificates are placed in your hands with a view to the loan. The subscribers will be sensible that the receipt cannot be deemed final, because the subscriptions may exceed the assumption, and the certificates may prove counterfeit or forged. Having received them in the manner above mentioned, you will commit to some person competent to so nice and important a business, the comparison of the certificates with the registers and checks in the offices of the state, to which no doubt the easiest access will be given. Should however any unexpected impediment occur, you will make it known to me.
"I do not perceive any objection to your striking a mark in the form you have exhibited (≠) upon all the certificates deposited with you towards the loan of the assumed debt, which however should be done in such manner as not to obliterate the printed or manuscript words. You will be careful to select a proper place for the mark, which as far as possible should be uniformly made, that the eye may instantly perceive it.
"I do not consider you as justifiable in refusing the certificates of the state of Pennsylvania (which are in all other respects assumable) because they have been received of the state in lieu of Continental certificates. It will not however be improper to use your endeavours to persuade the holders to exchange them, but you cannot, if they persist to offer, refuse to receive them.
"You will perceive on re-examination that you have misconceived the instruction contained in my letter of the 9th ult. in regard to Loan-office certificates issued prior to March 1778. It applied to those only pointed out in the 10th section, that is to the non-subscribed, and not to those that should be loaned. You will discontinue [Page 275] the practice of making such endorsements on those loaned, and you will, when transfers takes place of such stock as has arisen from loans of those certificates take care not to make a similar endorsement on the new certificate to be given. I do not think any person making a loan has a right to do it in any other manner than that which is deemed to be perfectly conformable with the law. In regard to such non-subscriber's certificates as have not that endorsement on them, I have no objection to your making it if desired, but great care must be taken to be correct.
I am, &c. ALEXANDER HAMILTON."
THOMAS SMITH, Esq Commissioner of Loans Pennsylvania.
Mr. Tilghman read part of the 17th and the whole of the 18th section of the Act of Congress of 4th August 1790, to introduce the correspondence with our government. Under that law it was the duty of the Secretary of the Treasury to provide that interest should not be paid twice on the same debt, he then read the following letters—
(CIRCULAR.)
"Treasury office, June 27th, 1791.
"SIR,
THE Legislature of the U. S. have directed, in the 18th section of the Act, making provision for the public debt, that the payment of interest should be suspended, in respect to the debt of any State, which may have issued its own certificates for those of the U. S. "until it shall appear to the satisfaction of the Secretary of the Treasury, that certificates issued for that purpose by such state, have been re-exchanged, or redeemed, or until those, which shall not have been re-exchanged or redeemed, shall be surrendered to the U. S." I find it necessary therefore to request your attention to the subject. If the State of Pennsylvania has issued any such certificates as are contemplated by [Page 276] the above recited section; it will give certainty to the operations of the Treasury, and may prevent delays, inconvenient to the public creditors. If you will direct the proper officers to cause the state of the fact, as it regards Pennsylvania to be made to appear to me. Should this general suggestion be less explicit than your desire, I shall, on being notified that it is your wish, point out more particularly the documents that would appear to satisfy the law.
I have the honor, &c. ALEXANDER HAMILTON."
His excellency the Governor of Pennsylvania,
"Secretary's Office, Philadelphia, July 1st, 1791.
"SIR,
IN obedience to instructions that I have received from the Governor, I transmit to you a copy of a letter from the Secretary of the Treasury, which affects the business of the New-Loan certificates issued in lieu of Continental certificates, and the state of the re-exchange directed to be made by the late Act of Assembly.
"You will be pleased with all convenient dispatch to make a report upon this subject to the Governor, accompanied with such statements as you shall deem necessary to satisfy the enquiry of the Secretary of the Treasury and the object of the law to which he refers.
John Nicholson Esq Comptroller-General of Pennsylvania.
Letter [Page 102-3] then read, and
Letter [Page 220] Mr. Dallas to Mr. Nicholson.
Also letter [Page 220-1-2.] Mr. Tilghman descanted very largely on this last letter, as it required particular attention, being written before the loan opened the second time—
[Page 277]
"Secretary's Office, Philad. 27th Dec. 1791.
"SIR,
"THE Governor has written to the Secretary of the Treasury of the U. S. upon the subject of his letter of the 21st inst. which was communicated to you; and, having enclosed that part of your report, which states the amount of the New-Loan certificates issued, and redeemed, and the probable balance of the unexchanged certificates, he mentions, that he has given you instructions to confer with the Secretary of the Treasury in hopes that the difficulty suggested may be removed, without claiming the interposition of the Legislature. I am directed, therefore, to request your attention to the subject, and that you will communicate to the Governor, the result of the proposed conference.
To John Nicholson, Esq Comptroller-General of Pennsylvania.
Here he observed no idea had been suggested all this time from the Governor to the Comptroller that the New-Loans were not subscribable to the loan of the United States.
"Comptroller-General's Office, Decem. 29th, 1791.
"SIR,
"I have received instructions from his excellency the Governor to confer with you on the subject contained in your letter to him of the 21st instant. If the difficulty suggested should arise in a doubt, whether part of the assumed debt of Pennsylvania by the U. States might not consist of certificates given for a like sum of others of the U. States not exchanged and to be surrendered, it will be easily proven, that it does not; at any rate, I could propose a conferrence with you on the business at any time you may appoint, provided you approve thereof. I am, Sir, &c.
ALEXANDER HAMILTON, Esq S. T. U. S.
[Page 278]
"Comptroller-General's Office, January 18th, 1792.
"SIR,
"Inclosed is one certificate of each kind granted by the state of Pennsylvania; that numbered 13768, £. 400 J. Chew Thomas, is the only kind granted for the debt of the U. States, and on which the question arises, whether any thereof have been subscribed to the funding system of the United States. The other two kinds, No. 1687 for depreciation of the army, and 2506 for all other debts due by the State, you will find include all that have been subsribed with the Loan-Officer.
"I also send you vol. 3 of the laws of Pennsylvania, where you will find at page 17 marked down, the law under which the certificates, were granted mentioned first above.
"I will send for the certificates and book when you shall have done with them. I am, &c.
The Hon. ALEX. HAMILTON, Sec. of the Treasury U. S.
In consequence of these letters a conference took place. Letter (page 223-4) then read—
"Treasury Department, Comptroller's Office, Feb. 2, 1792.
"SIR,
"YOU are requested to inform me as soon as may be, whether any certificates of the description of which the inclosed is a copy, have been subscribed to the loan payable in state certificates—and, if any, what is the estimated amount.
I am, &c. OLIVER WOLCOTT."
THOMAS SMITH, Esq Commissioner, &c.
Here follows the form of a blank certificate—
[Page 279][No. [...] ] B. [...] £. [...] (Pennsyl. Arms.) The Commonwealth of Pennsylvania, hath received on loan, from the [...] sum of [...] to be paid to the said [...] or bearer, on or before the first day of March, in the year of our Lord one thousand seven hundred and ninety-six, with interest from the [...] day of [...] 17 [...] at the rate of six per centum per annum, to be paid half yearly at the State-Treasury; according to the directions of an Act of the General Assembly, passed on the first day of March 1786.
Comp.G.office, 178 Countersigned, John Nicholson. D. Rittenhouse Treasur.
Here Mr. Tilghman observed that Mr. Nicholson was still of the same opinion, and that before the time of passing the Act of 10th April, 1792, he proposed a plan in opposition to that Act, in which he included New-Loans as a state debt as follow—
(A.) "A plan for modifying the present debt of Pennsylvania.
"WHEREAS the Commonwealth and the creditors may be reciprocally benefited by a communication of the debt in manner hereinafter provided: it is proposed.
(B.) "That beside the provision for payment of the debt by parting with the stock of the United States, the property of this State, the creditors may at their option subscribe their debts to the following loan hereby proposed.
"That the stock thereby created shall bear an interest of six per cent per annum, commencing July 1st, 1792, payable quarter yearly, that is to say on the 2d days of January, April, July, and October in every year.
"That the certificates or evidences of the debt shall not be transferable, but the debt may be assigned by the creditor or his attorney duly constituted at the proper [Page 280] office in the Treasury department, whereupon new certificates for the debt shall issue corresponding with the credits on the books. That the said debt shall be redeemable by the State at the rate of two per cent per annum of the principal. That the State shall have the power of redeeming the debt whenever expedient in such portion but no greater.
"That the faith of the State be pledged for the punctual payment of the interest, and that the interest and monies receivable from the United States by Pennsylvania or so much thereof as may be necessary be appropriated to that purpose, provided always that the Legislature may withdraw this appropriation upon providing other adequate and sufficient funds.
"That the following debts of the State be receivable in the said loan, deducting one fifth from the amount of the principal and interest.
1st. The funded debt | £. 190,000 |
2d. The depreciation debt funded and unfunded with interest |
(C.) 3d. The Bills of credit of 1785 | 21,000 |
4th. The Bills of credit of 1781 | 10,900 |
5th. The Bills of credit of June 1st, 1780 and interest | 9,500 |
6th. The Bills of credit of March 1780 (island money) & inter. | 700 |
7th. The interest notes issued in 1783 | 90 |
(D.) 8th. The New-Loan certificates and arrearages of interest about say £. 20,000. | |
| 232,190 |
Deduct ⅕ | 46,438 |
Leaves | 185,752 |
[Page 281]
"That the Bills of credit emitted by the late Province and by the State before the year 1780 shall be received in the said loan at the rate of 100 for 1, viz. 9th. of the former 266,439 |
(E.) 10th. Of resolve and commonwealth mo. 220,000 | 486,439 equal to 4864 7 6 |
(F.) 11th. That the purpart certificates given by the state on the subscribed debt of the U. States shall be received in the said loan at 6ʃ8 per pound £.54,617:9:3 at that is | 18,205 16 4 |
(G.) 12th. That the purparts given on the Pennsylvania 3 p. cent. stock (assumed) shall be received therein at 9ʃ per pound 81,926l. 3s. 10d. is at that rate equal to | 36,866 15 9 |
Amount | 245,688 19 7 |
1. Annual interest of the amount £. 14,741:6:8 ½, a year in 1792 is | 7,370 13 4 |
To be taken out of £. 14,738:2:1 interest of 6 & 3 per cent. stock, and out of £. 20,984:8:5 receivable on the assumption Act | 35,712 10 6 |
Annual Revenues. | |
Balance remaining of the above | 28,341 17 2 |
2. Excise, licences, Secretary's fees, Land-office fees, tax on writs and fines | 7,387 9 6 |
3. Taxes, imposts and other debts | 42,982 0 0 |
4. For lands, say | 4,500 |
| 83,211 6 8 |
[Page 282]
Annual Expences.1st. Support of government 31,000 | |
2d. Contingent fund 2,500 | |
3d. Roads 5,000 | |
4th. Pensions and militia expences 3,829 1 3 | |
5th. ½ year's interest on the present debt till July 1792 7,335 9 4 | |
6th. Frontier defence for 1792 4,500 | |
| 54,164 10 7 |
Balance of revenue on hand | 29,046 16 1 |
| £.83,211 6 8 |
"The above balance after deducting some necessary improvements for the rivers and hospital and some grants for public purposes to be provided for in the year, may remain as a fund for payment of any such creditors as may prefer redemption to the commutation of their debt, and to supercede the sales of stock so far as that may amount to.
"By adopting this plan, the State will always be adequate to every exigency and expence, and have [...] handsome fund left for useful improvements without saying any tax or burthen on the people, or without counting more on the product of the Land-office thin by the present plan of improvement it will be likely to yield for some years to come.
Respectfully submitted, JOHN NICHOLSON.
March 15th, 1792.
"References and observations.
(A.) "It is not proposed that this plan should oppose the provision for redemption of the debt, it may be added thereto, and when payment is held out with one hand, the commutation proposed with the other cannot be complained of whatever be the terms.
[Page 283](B.) "To pay the debts required, would take upwards of £.230,000, which sum must all be in the Treasury before the State can with safety declare payment, so great a sum to be brought in without returning into circulation would in a degree incapacitate the dealers in the funds from purchasing our stock, we see now the effect a few days discontinuance of discounts at bank hath on stock. The Act would limit a time in which the money must be in the Treasury, the sales of the stock must take place within that period, to raise the money the creating such necessity to sell, and the knowledge that so great a quantity would be in the market, would reduce the price of the 3 per cent. stock, to be sold, and the more so, as the time approached nearer an end, and all this while the monies from the first sales would be unproductive, altho' not so the property sold to raise it. But without allowing for these things let us suppose the present price 12ʃ9 to be obtained throughout the sales, the State would then be divested of a specie capital of above £.400,000, of which a part might always be held as a mean of discharging the reduced debt, which would exist on the plan proposed, and leave a balance of near £.200,000 clear profit in favor of this plan, and this sum would be greater by all the reduction of the price from the causes aforesaid which would be very considerable. But this is not all, for after divesting the State of all her 3 per cent. stock it would take the most if not all the 6 per cent. or deferred stock, to be parted with to make up the deficiency, and the State deprived of this annual income would be obliged to resort to direct taxation for further expences or improvements which the interest of this stock is now appropriated to.
"All writers on the subject of finance agree that a public debt is accompanied with some advantages by combining the interest of individuals with the success, stability and honor of government, and altho' these and other advantages should be outweighed by the disadvantages, so that a public debt ought net to be termed [Page 284] a public blessing, yet in the present case we should possess all the political as well as pecuniary advantages without any of the objections, for as it is shewn above the State possess the specie capital always to meet the debt, altho' they are at liberty to redeem in certain portions, yet they are not bound to pay, and may continue without doing it until Congress pay the capital of their 3 per cent. stock.
"The policy of this measure must strike forcibly every one who is desirous of preventing the annihilation of the State governments and preserving the balance of power between them and the General government. The limits of which are but imperfectly traced out in some cases by the federal Constitution, and if the doctrine of implication gains ground, may prove no barrier to the encroachments of power. We see what exertions the policy of the general government directs to, on this head respecting the assumption of the State debts.
(C.) "By the present laws or proposed arrangements of the committee on Ways and Means there is no provision for exchanging these bills at the Treasury for specie or for redeeming them, except to such as have public payments to make, which may be done therein, altho' they are all engaged to be redeemed this year, this plan will prevent the collection of the revenue from being clogged in future with these bills.
(D.) "It is proposed that these certificates should be received with the arrears of their interest on the same term as the other preceding debts of the state. The holders nevertheless to be continued in the privilege of exchanging them as at present. But it would seem proper that after due notice so as not to extend to the period of the limitation of the next loan by Congress, a limitation should by law be put to such power of exchanging, that thereafter the Continental certificates should be subscribed for the use of the state, and that the state having provided for the redemption of such as might remain unexchanged, unsubscribed the loan herein proposed or unsubscribed [...]o the [...] or [Page 285] the state debts by the United States, should declare that interest should thenceforth cease thereon unless payment were demanded.
"No sum is extended in this case as the Continental certificates will be in possession of the state to be opposed to this debt as far as the same may be subscribed as herein proposed.
(E.) "These emissions thus provided for, may and will redeem them out of the way and may prevent difficulties hereafter. That a government may interrupt the currency, so as to take it out of circulation and redeem it by other bills we have, beside other precedents, two in Pennsylvania between the year 1730 and 1740. All the old bills were called in and others given for them, and at the Revolution a similar law was passed respecting all the bills emitted before that period: But how far the government may decide that after a fixed period thus to exchange them shall have elapsed, they may wholly refuse payment thereof, no such terms existing when the bills were emitted, is a question which may better be got rid of in this way, which will afford the holders more than the last current value of the bills. This is clear that the bills emitted by the old government should have no better fate than those emitted under the present, nor should any preference arising out of distrust of the late revolution, and the present government, operate any advantage to this class, while those should suffer who in confidence, and compliance with the laws of the state, exchanged their bills, the former for the latter.
(F.) "These certificates cannot be redeemed, consistently with the faith and honor of the state, by calculating the accumulated interest half yearly, for an annuity of nine years, because they and the Act under which they were issued, contain an obligation to pay the interest until it shall be done by the United States, If therefore no payment should be made of interest in 1801, or any future period, on deferred debt by the United States, the obligation of the state still compel us to pay.
[Page 286](G.) "These certificates granted for the additional interest of 3 per cent. bind the state in such a way as that the government can never be released; therefore consistent with good faith, without a commutation accepted at the choice of the creditor, unless the United States should raise the interest to 6 per cent. which will not be done; or unless the United States, who may when they please, should pay off the capital. The latter is not shortly to be expected, unless on the application of Pennsylvania, who could make it their advantage to redeem the Pennsylvania assumed debt. It would be well therefore to hold out this proposition for such as should not within a limited time subscribe their 3 per cent. purparts, according to the terms herein proposed."
Mr. Tilghman observed that Mr. Nicholson proposed this plan to several members of the Legislature, containing his declaration and opinion as to the subscribability of New-Loan certificates to the loan of the U. S. (See last line page 284, and first line page 285.)
He read the following letter—
"DEAR SIR,
21st March, 1792.
"I FIND from consulting Mr. Gallatin, and several other gentlemen, that your plan would not, at this time, meet with any chance of success, though its principles appear to me to be good. The Governor has considered the subject, and will probably determine to-morrow, how far it would be proper to transmit the plan to the Legislature. I am, &c.
JOHN NICHOLSON, Esq
Wm. Bingham, Esq sworn.
Question by Mr. Tilghman. Do you recollect any thing of a plan of finance enclosed to you in 1792 by the Comptroller-General?
Ans. I do, it was enclosed to me in a letter by the [Page 287] defendant, and proposed as a substitute for the one brought in by the committee on ways and means.
I do not recollect particularly the plan, being more engaged in the one before the House, but from some parts of the one now produced I think it is the same.
Mr. Tilghman observed that
While the Act of the 10th of April 1792 was under the consideration of the Legislature, Mr. N. thought it his duty to give it every decent opposition by mentioning to the members and by trying to carry his own plan into execution, and particularly as it would by the 6th section make the State liable to redeem whatever Congress would chuse to assume.
Richard Thomas, Esq sworn.
My memory is imperfect, I remember the defendant had some conversation with me whilst the bill was depending before the Legislature, I remember generally that he said, the bill as it stood would admit of constructions that would open a door for speculation, I cannot recollect perfectly, but I fully understood from him that he was opposed to the bill for that reason, I do not recollect the very words, but from that principle, a speculation disadvantageous to the State.
Alexander Hamilton, Esq Sec. Treasury U. S. sworn.
Ques. by the defendant's Counsel. Do you recollect what passed at any conference between yourself and the Comptroller-General, and what difficulty occurred to you respecting the subscribability of New-Loans?
I recollect there were several conferences between the Comptroller-General and myself, am unable to distinguish with precision the one alluded to, I recollect one interview in particular in which this point was discussed, that is, whether interest on the state debt should be suspended. I really charge my memory with nothing more than, that Mr. Nicholson urged arguments to induce me to believe that the spirit of that part of the Act of Congress was only to prevent the payment of [Page 288] double interest, and that a surrender was neither practicable nor equitable, (see page 220-1-2-3-4); as none of these had been subscribed, this inconvenience could not arise, the intention of the Act of Congress was fulfilled, I was convinced the reasoning was just, there being no basis on which the U. S. could demand a surrender.
If the New-Loans in my view of them at that time had not been subscribable, this difficulty could not have arisen. The Comptroller always appeared to me to be of the opinion that they were subscribable—none were subscribed in the former loan. The enquiry whether any had been subscribed to the loan was directed to the commissioner of loans, the information mud ultimately have come from him—Mr. Wolcott might have been the intermediate agent, I can't remember.
Ques. Have any been subscribed to the second loan?
Ans. I can't without previous preparation answer that enquiry, I could have easily ascertained it, I do not recollect, my conjecture is that there were none, there were some certificates of that description which were not finally admitted. I recollect there were some discussions.
Ques. Are they entirely rejected or are they depending?
Ans. They took a course somewhat peculiar, in the view of the Treasury they are virtually excluded, the time allowed for the loan being passed; after the Attorney-General's opinion on a point raised they were not admitted, this point arose after the second loan opened. The subject had not engaged my consideration, nor did it come forward in a prominent point of view until after the second assumption. The Attorney-General of the state of Pennsylvania gave his opinion that they are abolished, as debts of this state. I may have read the Act of March 1789, but I do not recollect having seen it until after the closure of the first loan. I did not see that Act during the first conferences.
On Ques. by Mr. Bradford. It did not occur to me that the Act of 1789 was passed after the adoption of the Federal Constitution, until the business was closed [Page 289] at the Treasury—the Constitution was not considered by me until afterwards.
Ques. Can you furnish a copy of the opinion of the Attorney-General on that point?
Ans. Certainly. (See page 81-2.) (Retired.)
John Smilie, Esq sworn.
Ques. by Mr. Bradford, Please to inform the Senate of your recollection of Mr. Nicholson's objection to the passing of the Act of 10th April 1792?
Ans. I believe Mr. Nicholson communicated some objections which he had against the Act, I do not perfectly recollect, he spoke to me more than once on the subject. I do not recollect seeing his plan of finance; it is probable that he shewed it to me, but I do not remember.
(Retired.)
Mr. Robert Hare, sworn.
Mr. Nicholson in the spring of 1792 communicated to me his plan of finance. Here is the original plan with Mr. Nicholson's reasons in recommendation of it, there was no more of it I believe; the transaction took place two years ago; I know of no other conversation on the subject, I was not careful, having no idea that I should be required to answer any thing about it. Whilst the finance-bill was before the House, Mr. Nicholson sent for me into the committee room, I informed Mr. Nicholson that I believed the plan would not be relished as coming from an officer, and would be the cause of some jealousy, Mr. Nicholson told me that the Governor would recommend it, I shewed it to another member, who likewise differed with Mr. Nicholson, as I did: It did not come from the Governor, so no further notice was taken of it.
Ques. Did Mr. Nicholson mention his objections to you?
Ans. Mr. Nicholson had a general condemnation of the Act in view—he communicated no further ideas to me, our conversation was very short, there was an interesting [Page 290] debate in the House at the time, and I left him immediately. (Retired.)
☞ The following is a copy of the letter handed by Mr. Hare with the plan recommended by Mr. Nicholson, (page 279, &c.)
DEAR SIR,
March 22d, 2792.
"ENCLOSED is a copy of a plan on the subject of the public debt, which I wish much to see connected with the offer of redemption which on pecuniary and political principles promise much in favor of Pennsylvania. The Governor I believe will submit it to the Legislature. If it meets your approbation, I wish you would support it in the House. It will save Pennsylvania from that necessity she will otherwise be under of recurring to taxation for support of government and incidental expences without any thing for improvements. By this a surplus will exist this year of £.29,000. So that Monongahelia inland navigation may be encouraged without injuring other essential objects, that there will be money for the Hospital, &c. The annual surplus of the revenue after improvements, will constitute a handsome sinking fund. With esteem, &c.
JOHN NICHOLSON." ROBERT HARE, Esq
William Montgomery, Esq sworn.
I remember being one day in Mr. Nicholson's office, whilst the law of the 10th of April 1792 was pending before the House, he expressed his disapprobation of the law, as it would expose the state to inconveniences, and would prove of advantage to individuals—not particular what passages or section he alluded to—he gave me to understand that some individuals would take the advantage to the loss of the state. I think he mentioned his own plan a better one.
Abraham Smith, Esq sworn.
Whilst the Act of 10th April 1792, was before the Legislature, Mr. Nicholson called at my lodgings, he [Page 291] told me he did not like the law, and his arguments convinced me, this turned my attention to the plan recommended by him, on examination I saw some parts of it which I did not like, and therefore thought his plan wrong. The particular reasons not recollected—one objection was the sale of so much stock would overcroud the market, and, sold to a disadvantage would injure the state. (Retired.)
Mr. Tilghman remarked that as Mr. Hamilton's letter to Mr. Dallas had been brought forward, the two letters (see page 74 to 79, and one letter, page 218 to 220) should also be read, which he did. In the latter the Secretary mentions the virtual rejection of them, but did not recollect the Federal Constitution.
Mr. Donnaldson was called—
Shortly after the House arose after the passing of the Act of the 10th April 1792 I was in the Comptroller's office on business—Mr. Gallatin was present, I observed that the 6th section was very loose and would embrace unfunded depreciation debt. In which sentiment there was an agreement of opinion, and I think Mr. Nicholson observed if Congress would assume the old bills of credit of the state, the Act would embrace them. Mr. Gallatin observed that the section was more general than he at first thought, or intended it, and that it would embrace unfunded depreciation, don't recollect that any conversation took place, nor difference of opinion about that law until after the subscription of New-Loans, when we had a conference, and we agreed in opinion that they were subscribable and assumable. No other conversation about them until the conference abovementioned. I recollect the letter of the 13th of April 1792, respecting the sale of stock. But as to that said to be lost, in my letter book there is no reference to such a letter, I have been much perplexed about it, strongly impressed that there had been such a letter, but cannot account for it, and doubt whether there was any as it is not on my books. When the committee on Ways and [Page 292] Means had the subject before them last year, they required the estimate—I turned to my letter book, but could not find it.
The defendant's accounts were passed through my office in the usual form. His abstracts were made in his office, this difference, that assignments were made on them in his office, then they were sent down to mine.
Ques. Is there any thing upon these abstracts from whence, in the common course of business, they could be distinguished that New-Loans were included?
Ans. Yes; dates of interest on New-Loans commenced at mixt and different dates. The date of the commencement of interest on funded and depreciation debt on fixt and particular dates. Funded debt first of January, first of July, depreciation 10th April, 10th of October. No other certificates but New-Loans are depreciated on the principal.
Ques. Do you recollect any other distinguishing mark?
Ans. None that occurs to me at present, the names of the issuers were the same in the one as in the other. Dates of interest promiscuous in New-Loans, in the other certificates the dates of interest fixt and determined. The fact was I never considered it of any consequence what the abstracts were made up of, so that they were received at the Loan-office.
I encouraged subscribing under the idea that Pennsylvania would be a creditor state, the documents were presented to the Comptroller, if they passed him, that is whether they were assumable; they then came to me a second time, the principal examination was confined to the calculations of principal and interest, the business was carried thro' in the usual time, no hurry or solicitude on the part of the Comptroller to carry his business thro', or get his abstracts passed. If there had been I should have turned the other business by. One day's business was generally finished the same day. In the [...]d conference with Mr. Nicholson, I was perfectly of opinion with him and I was confirmed in my opinion until doubts were raised by Mr. Dallas, who procured the [Page 293] Attorney-General's opinion. The construction of the law was the subject of conversation—I introduced it.
Ques. by Mr. Wilcocks. Had you no opportunity of seeing the certificates? [Not 10 persons in the gallery.]
Ans. I have frequently, where certificates were brought to be redeemed, and returned those subscribable to the parties, the certificates subscribed were never brought to my office.
Ques. by Mr. Ingersoll. You say that Mr. Nicholson mentioned bills of credit?
Ans. The first observation was made by me, that it would extend to unfunded depreciation; by Mr. Nicholson, that it was a sweeping clause, and would extend to every thing, that is if the United States, would take in the bills of credit of this State, the section would embrace them or whatever Congress would assume.
Ques. by Mr. Ingersoll. What about the documents in your office relative to forfeited estates?
Ans. The most of them were issued before my appointment.
Ques. by Mr. Tilghman. At the time of conversation with Mr. Gallatin, the Comptroller, and yourself, was there an acquiescence that whatever was assumable and subscribable was redeemable?
Ans. We deemed that clause would extend to every thing Congress would redeem, the whole unfunded depreciation, nay every species of debt. But bills of credit and unfunded depreciation were particularly mentioned.
Ques. by Mr. Gibson. Were the unfunded depreciation redeemed under the 2d or 6th section?
Ans. Under the 6th section.
Adjourned till 10 o'clock to-morrow.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General of this commonwealth, now depending [Page 294] before the Senate, on the articles of impeachment exhibited against him by the House of Representatives.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee then proceeded to the Senate-chamber for the purpose aforesaid.
"And after some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended the trial of the said John Nicholson.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported that they had made further progress."
Seventh day of the trial. THURSDAY, MARCH 6, 1794.
SENATE met pursuant to adjournment.
(Messrs. Wilcocks and C. Evans only attending, not 10 spectators in the gallery.)
Mr. Tilghman
Having examined a number of witnesses and read many documents to shew that our construction of the Act is consonant to law, and that the defendant's opinion and judgment was the legal one, I will only examine one or two more to the same point.—In order to shew this more fully I will quote the Governor's words in the minutes of the Assembly, 10th December, 1791, page 12, where his words allude to the payment of arrears due not on New-Loan certificates but "on the New-Loan debt." Where they are quoted, they are stiled New-Loan [Page 295] certificates. The reason why the New-Loans are not stated as a debt to be paid, is because the commonwealth thought she had a fund in her hands equivalent to answer them at any time, the State and her officers conceived they had a fund, commensurate to their redemption, either when the party should come to exchange, or when future provision should be made by the Legislature. The word "redeemed," minutes, page 389, 1791, so much relied on, alluded only to the Land-Office. Page 421, the Register-General heads the title "New-Loan Debt." In Mr. Donnaldson's report 15th August, 1791, No. 25, the expression is "Arrears of interest on New-Loan Debt:" with many other similar expressions.
Mr. Albert Gallatin, sworn.
Ques. We wish to know if you had any conversation with Mr. Nicholson about the Act of the 10th of April 1792—the purport, time, &c.?
Ans. I have understood that those were the points to which I should give evidence, and I have just sent for the minutes of 1791 to whet my recollection as my memory is imperfect at this time. [Gets the books.] The only difficulty I have is, the date of the conversation, I do not recollect that very well, whether before the bill was reported, or while the report of the committee on ways and means was before the House—the import of the conversation was that Mr. Nicholson had an objection, he gave me his plan, and requested me to give my opinion, the plan before the House was to redeem the debts, his plan did not propose a redemption but commutation with an irredeemable quality. I thought the redeeming plan better and therefore did not approve and I returned him his plan. Another circumstance, After I returned the plan to Mr. Nicholson, the Secratary of the commonwealth shewed me that plan or a copy of it, and requested me to look at it, and that Mr. Nicholson requested the Governor to recommend it to the Legislature, the bill agreeably to the report of the committee of Ways and Means was [Page 296] then under the consideration of the Legislature, I told Mr. Dallas that I had seen it before, and disapproved of it, and told him the Governor had better examine the plan, and not send it except he approved of it.
After the bill passed; and the House adjourned. I was in the Comptroller's office; the conversation turned on the possibility of carrying the Act into execution, seseveral difficulties arose, and objections were started, on account of the price of stock in the market being lower than the price limited in the Act, and propositions were made to get over the difficulty. Also whether a part of the 3 per cent. stock should be sold or the whole at once; I was afraid the whole plan would be defeated. These objections were raised by the officers. The defendant suggested that by the law unfunded depreciation certificates were redeemable, altho' the Legislature perhaps might not intend it: That it appeared to him unfunded depreciation was redeemable, altho' the report excluded them. Upon that Mr. Nicholson shewed me the 6th section, I assented to what he said, and said that I thought the unfunded certificates were included in that section. I added that I had drawn the bill myself, and had made the 6th section a proviso to the second; expressly providing for the redemption of certain certificates therein defined, which would put the thing beyond dispute, because the second section defined the thing to be redeemed, that the proviso was made a distinct section out of the House; as some kind of proviso, always considered in the House, but assented at the same time that the construction would extend to unfunded depreciation. I had no time to form an opinion, it was of the moment, on the first impression. I also added that it was very immaterial to the state to redeem this way, or by the Land-Office, the price being at that time nearly the same as cash.* Mr. Donnaldson was present the whole or most of the time. I don't remember [Page 297] member to hear any other opinion from Mr. Donnaldson except at that time. At the next meeting of the Legislature on my return to the city, I was astonished to hear that New-Loans were redeemed—I had a small New-Loan certificate from Mr. Douglass, which I kept pretty late, don't know whether before or after the law passed, I gave it to the Comptroller to exchange it, he said he was hurried, he would get it exchanged and subscribed and give me the parts; he gave me a receipt for the New-Loan. I do not know the time, it was about May, it was not completed at the end of April, I left town with that receipt in my pocket, which I gave to Mr. Douglass, I know I had no idea of their being of any other use than for the purpose of exchange, if I had thought they were redeemable, I would enquire and do the best for him who employed me.
Ques. Did you not give an opinion that whatever were subscribable, were redeemable?
Ans. Yes; that was the ground of my opinion that the unfunded depreciation were redeemable.
Ques. by Mr. Lewis. Of what date was that conversation?
Ans. A day or two after the advertisement was published, I staid in town ten days after the House had adjourned, the advertisement was put into the public papers before I left town, the sale of stock was the 16th April—the sum to be sold was 986,000 dollars. I think the advertisement was the ground of our conversation.
Ques. by Mr. Ingersoll. Did you concur in opinion with the Comptroller-General that if Congress should assume the state debts that bills of credit would be redeemable?
Ans. That was not mentioned, if it was I did not assent. The reason why I recollect it, was that during the following Legislature a letter was written by the Comptroller in which such an idea was introduced. This made me look into the law, to see whether there were any grounds for it, saw there a distinction made between certificates and bills of credit, the sixth section [Page 298] includes only certificates. The Comptroller's letter is in the fall of 92 or spring of 1793.
Ques. by Mr. Ingersoll. Do you recollect how the Register-General expressed himself at that meeting?
Ans. I don't remember his giving any opinion, I think he acquiesced as far as the unfunded depreciation certificates.
Ques. by ditto. In the course of this conversation was there any other object than the unfunded depreciation certificates?
Ans. None that I recollect.
The Register-General expressed his opinion very fully next year before the committee of ways and means, but before that time I do not remember.
Ques. by Mr. Ingersoll. Did he mention his opinion at the time New-Loans were redeemed?
Ans. Yes. (Report of committee on ways and means, page 337) a part of the report was grounded on the testimony of the Register-General respecting them— (Here he read "deluded into error, discriminate," &c.) the whole of that was grounded on the declaration of the Register-General, he declared he was not consulted and the abstracts on the face did not discriminate, there was a change took place between this and the time when the articles of impeachment were before the House, he said the abstracts sufficiently discriminated, and that the New-Loans could be easily distinguished. Another article was then made to conform to this idea. (Hers Mr. Gallatin pointed out what, he called, an error in the minutes, page 361 and 374.) He also said he always conceived if they were assumable, they were redeemable with this single difficulty, whether there was power lodged with the Comptroller to give up the Continental certificates▪ The Comptroller had always certified the subscribability without his knowledge. He was also asked how he did not discover them by other marks—his answer was, that his part was the calculation of interest, and did not attend to any other. Last summer when the committee of investigation examined the certificate of John [Page 299] Thompson, for £. 231:7:7, found that interest was calculated on £.300—that certificate was reduced by the scale of depreciation, I asked Donnaldson, here was one you could not mistake, you said you calculated the interest from this calculation, and date of interest, you must be satisfied that this was a New-Loan?—He seemed much confused and said a clerk had done it, and appeared as if he knew nothing of it. He also said he passed one small one after he knew it.
Ques. by Mr. Lewis. Were the articles found without the witnesses being sworn?
Ans. Mr. M'Clenachan, Mr. M'Connell, and Mr. Oldden were sworn—Donnaldson was a public officer, and was not sworn, no other witness whatever was attached to this third article but Mr. Donnaldson.
(He retired.)
Mr. Joseph Boggs, sworn.
Ques. Did you subscribe any New-Loans to the state loan of the United States?
Ans. Yes; about the latter end of June or beginning of July 1792, I was asked for New-Loan certificates, I asked what they would give me, they said 6 or 7 pence more than for final settlements, I had none then, but from this circumstance I was induced to try to find out what they wanted to do with them. After reading the Act of Congress of 4th of August 1790, assuming state debts, and the Act of this state which was passed in April 1792, it was my opinion they were assumable, and in consequence I purchased and subscribed part on my own account and part on account of another person, none on Mr. Nicholson's account, I can't tell who came to me, I made an abstract, carried it to Mr. Nicholson, he certified them genuine and assumable, they were not redeemed as the business was stopped.
Ques. by Mr. Ingersoll. What's the reason of 6 or 7 pence higher than the other certificates? Were they equal before?
Ans. No difference. I did not know that Mr. Nicholson was purchasing at that time—was informed by [Page 300] the Register-General that a stop was put to them in the Secretary's office.
Mr. Tilghman proceeded—
It appears also that Judge Addison was making a second subscription, it is presumable that he knew the law. It is mentioned that Mr. Nicholson did not certify in his own case. This is a strong circumstance: If he was conscious that the certification would be improper, he would have omitted it: before the second loan it was not customary. A counterfeit certificate of Lawman, of Lancaster, gave rise to this certification.
Mr. Richard Smith (son to the late Commissioner of Loans) brought the subscription book to the state loan of the U. S. and being sworn, declared as follows.
George Lawman of Lancaster subscribed in the name of Gungachu, a certificate No. 234 which proved to be counterfeit. I believe the cause of certifying was to prevent inconvenience to the parties, when they came without such certification they were generally sent to Mr. Nicholson's office, I did not know when the practice commenced—it made no odds to us whether it was done or not, as the receipt which my father gave was subject to examination, when the first and second loans closed we took the certificates to the Comptroller's office and examined for ourselves. (Retired.)
Mr. Tilghman.
It hath been objected that the Governor called for a statement which does not at this time appear, altho' its contents are pretty satisfactorily acknowledged, a bare attention to the time when this transaction took place will shew the assertion is unfounded—It is true the state committed herself so far as to redeem what would be assumed, but as the Act of Congress was not then passed, it was unknown what Congress would assume. The Comptroller never thought New-Loans came under the second section, the sale of stock related only to the second section, he could not divine more than others, it by no means follows from this that New-Loans were not redeemable—strange that in the fourth article they endeavour [Page 301] to prove the premises from the conclusion. It was lawful for him to purchase as well as others, the moment a doubt was suggested he stopped and paid Judge Addison July 23, 1792, for his subscription pound for pound. If this is doubted, recourse may be had to the bank, where they'll find that Mr. Nicholson paid the full amount.
He read the following letter—
"Secretary's office, July 23, 1792.
"GENTLEMEN,
"THE Governor directs me to request that you will avoid giving any sanction to an idea that the New-Loan certificates of the State are subscribable to the loan proposed by Congress, or certifying that they are so to the Continental Loan-officer, until he has received the opinion of the Attorney-General upon that subject.
To the Comptroller and Register-General.
Mr. Tilghman.—
Before I proceed to the next head, I will remark that the state ought to pay the full amount, that the New-Loans were subscribable and redeemable, and consequently the state ought to pay pound for pound, and really the complaint against the Comptroller is of an extraordinary nature—"Mr. Nicholson acquired wealth that the state ought to have got!"—I fancy if any questions ought to be raised, it ought not to be between the commonwealth, but between the persons from whom Mr. Nicholson bought, he however bought fairly. I now come to the Acts of Assembly, and I will shew that the construction drawn by the managers, is injurious and derogatory, and I hope to shew Mr. Nicholson's construction to be consonant to good faith, honor and equity. If the law is to receive their construction, it will oppose the Federal Constitution, which is the supreme law of the land; and therefore it is utterly void.
[Page 302]My positions are, that New-Loans were subscribable to the first loan, also to the second, and likewise redeemable under the sixth section of the Act of the 10th April 1792.
(Here Mr. Tilghman read the 3d, 7th and 11th sections of the Act of March 1, 1786, to prove that New-Loans were as much a debt as any other.) No matter whether the commonwealth became immediately indebted or thro' the agency of others. Temporary provision is not apparent from the Act. If the commonwealth entertained temporary views they were not mutual. Mutuality and reciprocity are the essence of contracts. Whatever is reasonable with private persons in the case of contracts is so with the State.
But it hath been contended that the Act of March 27 1789, puts these certificates into an ambiguous state; let us examine the Act itself—"Whereas the duties on exports and imposts are given to Congress—temporary relief —it became inconvenient to pay half-yearly, &c."—this Act does not compel an exchange, it leaves it optional; perhaps the commonwealth could not pay, what then ought to be done?—we will give you an option. You are our creditor; we have contracted to pay you principal and interest; we will pay you four year's interest because we are able to do so, and we will give you back your original certificate at your option, or we will pay you when we can.
The 3d section did not contemplate that all would exchange, and it implies too much injustice and impropriety to presume they meant to absolve themselves from the payment of the remainder; "MANY," is a relative term, it does not imply a majority, it means some may, others would not.
Under the construction of the Managers the New-Loan holder is a creditor of nobody; but possibly or probably may become the creditor of the Continent. Notwithstanding the time of payment is altered, yet the State holds the value in her hands and continues no debtor. How can such a construction be put on this [Page 303] Act without flying in the face of the Federal Constitution—(Section 10 of the first article is cited,) Congress in the ninth section of the same article is denied the power of making ex post facto laws.
This is the last of all supposable cases, by this Constitution no State can pass a law impairing the obligation of contracts made between A and B, consequently a State cannot do it, when she is a contracting party.
I now refer to the Act of 7th April 1791, that the commonwealth contemplated them as a debt. (He quoted Act of 7th April, 1791, page 51 and 54.) Where the State seemed to contemplate the preventing of New-Loans from subscription. No. 235 is the first abstract which was certified—No. 234 was counterfeit as aforesaid. No certification of genuine and assumable from Mr. Nicholson before the counterfeit was discovered.
It was not the duty of the Comptroller-General to certify—no checks of office have been broken—Mr. Nicholson was under no obligation to consult the Governor—no law required a discrimination, it would be wrong to do it, no intention in the Comptroller to deceive, if a difference of opinion with the Register-General existed then it would be right, he took no pains to colour, no labour to shed confusion, the New-Loans in his abstracts might have been known from all others, if the Register or any other person would examine them, this afforded an infallible criterion, if he had been at any pains to conceal—it would be contemptible swindling, [...] mean point of view indeed, "till he got the money. The subscription was in his own name, fairly and openly "to promote and procure his own emolument"—come what will of these allegations no such thoughts were in the Comptroller's mind, he sets all such at des [...]
The 4th a article of impeachment.
There is a [...]nd, 12th appropriation, by the Act of 7th April, 1791, and applies to our case by the 6th section of the Act of 10th April 1792. Out of this fund were redeemed the unfunded depreciation warrant [Page 304] No. 1551 for Brigade-Inspector, and several others which he referred to. If there was no fund it was no guilt imputable to the Comptroller, as it was not his look out, but the Governor's who drew the orders. (Here Mr. Wilcocks hinted to Mr. Tilghman, "no matter what fund, so you get the money." Mr. Tilghman replied, "I believe it to be the same with the Managers and their Counsel; but we have a legal fund tho' you have not.) Other warrants were produced here—warrant No. 243 in favor of Mr. Rittenhouse, May 16th, 1792, no law expressly appropriating this fund.
Mr. Dallas was called up and said, he never knew unfunded depreciation debt to have been paid under the Act of 10th April, 1792. The unfunded depreciation debt was not in the estimate (Mr. Trimble was introduced with his book) and Mr. Dallas read from his records the forms of the certificates and warrants—the original statement did not extend to unfunded deprecition debt: The Comptroller and Register-General were called on for a statement of the debt to be redeemed and accordingly the Governor directed the sale.
Mr. Tilghman—Having observed that the 1st, 2d and 3d articles of impeachment are not supported, and the 4th being a consequential deduction from the preceding ones, if the former has no foundation, the latter cannot be supported, I will to-morrow endeavour to discharge my duty respecting the succeeding articles.
Adjourned until 10 o'clock to-morrow.
In the minutes of the House of Representatives the following is recorded:—
"In conformity to the resolutions of the 25th February last the House resolved itself into a committee of the whole in order to attend the trial of John Nicholson, Comptroller-General of this commonwealth, now depending before the Senate, on the articles of impeachment exhibited against him by the House of Representatives.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
[Page 305]"The committee then proceeded to the Senate-chamber for the purpose aforesaid.
"And after some time, they returned to their own chamber.
"The Chairman then reported that the committee of the whole had attended the trial of the said John Nicholson.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported that they had made further progress."
Eighth day of the trial. FRIDAY, MARCH 7, 1794.
SENATE met pursuant to adjournment.
Mr. Tilghman.—
Under the 12th appropriation the law admits the fund for claims and improvements. Instances can be produced: But it is immaterial whether there are instances or not, if the law is with us. (The Treasurer was sent for at this time, who answered he could not come, and if the defendant wanted the vouchers he must send a horse and cart for them.)
Under the fifth and sixth articles the Comptroller is charged with purchasing certificates of persons coming to his office for the purpose of exchanging them —I acknowledge the fact and contend it is lawful; he purchased of Oldden, I contend that the property of the certificates were not vested in the State or Pennsylvania, the business was inchoate: a good deal remained to be done, the property belonged to the party, the amount of interest was to be calculated, indents to be paid, &c. before the exchange was completed. Instances will be be shewn to prove the practice of withdrawing after they had been thus rendered.
[Page 306] John Pearson, for whom a subpoena had been issued, was called but did not appear.
Griffith Evans, sworn.
I had been in the practice of frequently bringing New-Loans to the Comptroller-General's office to be exchanged. I was once at the Comptroller's office, I met a person from Chester county who had previously left a New-Loan certificate with Mr. Nicholson to be exchanged, he appeared to be going away, I suppose to get indents; I offered to do it for him, Mr. Nicholson delivered me the certificate which I afterwards exchanged, probably at some subsequent period when I was exchanging more for myself, the date I suppose in the winter of 1792.
Ques. Was it before the passing of the Act of the 10th April 1792? and inform of any circumstances respecting it.
Ans. I will relate a circumstance; previous to the passing of that Act, I came to the Comptroller-General's office, I met Mr. Gallatin going down, almost as soon as I came up to Mr. Nicholson's table, I said is it possible that they will pass that law? if passed as reported it will include New-Loans. Mr. Nicholson said, I have been endeavouring to convince Mr. Gallatin that it will do so.
We conversed on the subject and both agreed that it would not be for the interest of the State, and that it would be better if the Act did not pass. We thought it better for the State not to sell the stock. Mr. Nicholson said, he thought he had convinced Mr. Gallatin. I do not remember any thing about unfunded debt—it appeared to me so extraordinary that I thought it would not pass. We did not go into particular statements, no other inconvenience mentioned except the selling of the public stock. After the law passed I revolved in my mind whether I should go into a speculation, but from some consideration I did not.
Mr. Tilghman:
On the 16th of March 1792, the House of Representatives [Page 307] (by the minutes) resolved itself into a committee of the whole to take the Act of the 10th April 1792 into consideration. I will shew from the books of Mr. Nicholson that he spoke to Mr. Gallatin as the last witness had deposed—(after some debate the diary, book A, of the Comptroller was rejected as improper testimony, being the private memorandum of the defendant, as they alledged.)
Mr. Donnaldson was called and declared,
I was never before the House of Representatives; only before the committee of Ways and Means: never on oath. I was requested to reduce what I had to writing, and send it to them, which I did.
Mr. Tilghman.—It has been supposed that Hans Hamilton received Continental Loan-office certificates from the commonwealth of Pennsylvania these have been subscribed by John Nicholson on Hans Hamilton's account to the domestic debt of the United States—And the corresponding New-Loans also by the Comptroller-General on his own account to the State loan. The inference thence drawn is that the New-Loans were first exchanged and then subscribed, we are not charged with having misapplied the Continental certificates, the charge must be that the New-Loans were exchanged and then subscribed, but this by no means appears, nor was it the case, as we shall prove by the testimony of Hans Hamilton himself, that Mr. Nicholson purchased those New-Loans of him.
J. Donnaldson attended with his books.
The first entry of the redeemed debt made on the 2d of July 1792. The number of the abstract was presented and the entry was made of the whole. The first entry of unfunded depreciation debt was Samuel Powel, upon the separation of the debt the abstracts were sent to Mr. Nicholson's office to mark the several kinds. They were sent in August or September. After their return to my office, I entered the abstracts. The next of unfunded depreciation was No. 218, Robert Buchannan. The next instance was No. 256, Jasper Yeates. The whole amount of unfunded depreciation was 4,070 dollars and 10 cents: [Page 308] It was paid out of the sale of stock. I find by my report, that my estimate to the Governor did not include them.
Mr. Tilghman:
The unfunded Depreciation were entitled under the sixth section of the Act of the 10th April 1792, and yet they contend that no fund was provided: I have now the warrants from the Treasury—(Here a number of warrants were produced to shew that similar claims were paid by the 3d and 12th appropriations out of the fund for claims and improvements.) Here I will leave the 4th article.
I shall now proceed to shew instances of New-Loan certificates being lodged with the Comptroller-General for exchange and withdrawn by the proprietors. The following letters were then read.
"Comptroller-General's office, June 21, 1792.
"SIR,
"A NUMBER of the New-Loan certificates said to be lost or stolen, and which are provided for by the Act, entitled "An Act for the relief of the estate of Sarah Caldwell, and also for the relief of Mary Beer, James Steer, and John Thompson," have been and are presenting at this office for exchange. The said Act directed and they have accordingly given security to the commonwealth to indemnify the said commonwealth against the said certificates. The parties who produce them shew that they have purchased them bona fide for a valuable consideration; as the Continental certificates for which they were given are already delivered up, they cannot be delivered again, but the parties claim an equivalent, and the object of this application is to receive the instructions of your excellency, whether under the circumstances of the case, the nature of the certificates payable to bearer, the security which hath been taken as aforesaid, and the Act of 27th March 1789, allowing the holder of such certificates to receive a like amount in Continental certificates. The laws as well as the reputation of the State do not require that the parties as [Page 309] aforesaid should have their certificates exchanged on their application.
His excellency the Governor of Pennsylvania.
"BEFORE the Governor can give an answer to your letter respecting the New-Loan certificates which tho' said to have been lost, or stolen, are now presented to be exchanged at your office, he wishes to know the names of the respective holders, and the nature of the testimony which they offer to prove that they are bona fide purchasers for a valuable consideration. On receiving this information he will probably refer the consideration of the subject to the law officer of the State.
To the Comptroller-General of Pennsylvania.
"Comptroller-General's office, June 25, 1792.
"SIR,
"THERE have been certificates of John Thompson produced at this office by—
"Clement Biddle, Esq who shews the bill of sale from the last holder.
"Solomon Marks, junior, who produces two from preceding holders.
"Robert Ross who produces a bill of sale from the last holder before him.
"The two last have withdrawn their certificates and parted therewith to others.
"The above is in pursuance of the Secretary's letter of the 23 instant. I am, &c.
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
[Page 310]The above letters prove the practice.
Some witnesses were called, and in waiting for them some time elapsed: Mr. Tilghman had some time before handed the deposition of Hans Hamilton to the Attorney-General of the State of Pennsylvania; in this interval Mr. Tilghman requested the gentlemen concerned in the prosecution to declare whether they would or would not oppose its being read to the Senate—he observed that it would take a fortnight to procure another deposition as Mr. Hamilton lived over the mountains in Westmoreland county, the roads being in a bad condition, and mentioned that Mr. Smith who knew that rout well, said it would take that time to complete the journey.
Mr. Ingersoll observed that it was extremely disagreeable to him to procrastinate the trial, or delay the proceedings, but to admit ex parte evidence or depositions was also against his inclination, if he should admit the testimony offered he might incur censure.
If on the other hand the witness should again say what he had said before, the refusal of the deposition might have some unfavourable construction, he did not wish to do any thing that would incur censure on the one hand, or could be construed as an hardship on the other, he wished to consult his colleagues on the subject, that his duty as an Attorney on this side, and his conduct as a fair adversary on the other might be manifest.
Mr. Lewis observed that the character of the witness was unexceptionable, and the Managers might do as they pleased.
Mr. Tilghman agreed to any time the Managers and their Counsel would appoint to prepare interrogatories to the witness.
Col. Porter, sworn.
Ques. by Mr. Tilghman. Inform the Senate whether you have, or have not lodged any certificates with the Comptroller-General, and afterwards took them away?
[Page 311] Ans. I am unprepared to give evidence; I recollect having left an abstract of New-Loans with Mr. Nicholson for the purpose of re-exchanging; do not recollect dates, amount, nor numbers, nor whether it was after or before the 10th April, 1792, but probably it was in 92. I applied to the Comptroller and got them, having an occasion for an immediate sale.
Thomas Hale, sworn.
I have withdrawn one or two certificates from the Comptroller's office after I had deposited them there, I subscribed them afterwards with Mr. Smith, an abstract being first made out, when I first left them I did not know I could subscribe them, I gave no reason for withdrawing them: I got my information out of doors, I do not recollect that New-Loans were rising in price, nor whether the transaction took place in June or July: I left them in the morning and took them away in the evening of the same day.
Daniel Stroud, sworn.
I lodged a great many at one time in Mr. Nicholson's office, they remained several days. I withdrew them because I thought I could do better than to exchange them, this happened about the beginning of the year 1793. I gave no reason for withdrawing them, Mr. Nicholson had no objection.
Adjourned till half past nine o'clock to-morrow morning.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee of the whole then proceeded to the Senate-chamber for that purpose.
"After some time,
[Page 312]"The committee of the whole returned to their own chamber.
"The Chairman left the chair and the Speaker resumed it.
"The Chairman then informed the House that the committee of the whole had attended the trial of John Nicholson, Comptroller-General.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported further progress."
Ninth day of the trial. SATURDAY, MARCH 8, 1794.
SENATE met pursuant to adjournment.
After some consultation Mr. Ingersoll informed the counsel for the defendant that the committee of managers had instructed him not to admit the deposition of Hans Hamilton. His reasons:—
Because it was take [...] [...]his city the 27th of January last, the Legislature th [...]n in session, the attorneys for both sides in town, Mr. Nicholson might have detained the witness by subpoena, or if the witness should think it too long, the Attorney-General might have been consulted, and they would have managed it, that his deposition might have been taken in the regular way, that the practice of taking depositions privately is very exceptionable, and if taken in the absence of the opponent is discountenanced by courts of law, a witness may commit himself by giving sundry depositions; that the Comptroller knew, or knew not, that this charge would be brought forward, or was uncertain; if he knew it, he should have given notice, if he knew it not, it was strange he took it at all, if he was uncertain he might have had a specification of the charges, if he had asked for such specification. That it was a week [Page 313] or more since he called for the book of Exchanges, no intimation was then given of the deposition, nor since until the evening of the day before yesterday, that the deposition could not be admitted, nor the trial postponed; that the day of trial had been fixt, and every obstacle could have been removed on proper application.
Mr. Tilghman. I acknowledge that the deposition cannot be admitted agreeably to the strict rules of evidence. However well this point may be known to the committee and their counsel, it was unknown to the counsel of the Comptroller-General, till lately; Mr. Nicholson did not consult us; if he had applied to us, I can't pretend to say what we should have advised him to do. I request however that we may have time either to procure his deposition, or liberty to prefer the present deposition. If the defendant had been negligent, it is hard to condemn him unheard. One of the Managers agreed to inform the Comptroller whether this would be brought forward on the trial or not, which was not done.
Mr. Ingersoll. I can't conceive that a witness can come forward as well as if he had not been previously sworn; I will however agree to say nothing about Hans Hamilton; If there can be a return of the commission before the argument will be closed: I have no doubt but a return may be had without interruption.
Mr. Tilghman. I think the proposition a fair one, Mr. Hamilton is known to some members of the Legislature. And if the answers cannot be had in time, the Senate will judge whether they will wait for them or not.
Some arguments were adduced respecting the postponement of the 6th and 7th articles, at last it was agreed to omit Hans Hamilton altogether.*
[Page 314]Mr. Tilghman. I will now proceed to the interrogatories and answers of Blair M'Clenachan.
Here Mr. Tilghman shewed from the book of exchanges kept in the Comptroller-General's office, that Mr. M'Clenachan had brought upwards of 74 thousand dollars to the office and had them exchanged. He also shewed the abstracts of these exchanges made out for Mr. M'Clenachan as it was usual for the parties to do before their exchanges were made at the office.
Mr. Evans asked when the entries were made; the answer [Page 315] was, when the indents were paid: the abstracts were made immediately—and these were all the exchanges that were ever made for Mr. M'Clenachan.
Mr. Tilghman. I will now take a retrospective view of the articles of impeachment, and first of the 7th, which if taken by itself, and no objection hereafter to be made the testimony fixes no criminality on the Comptroller-General; the 5th and 6th are not supported, no criminal conduct in him to do what any person might have done, the exchange had not been prohibited, any person might purchase. 4th article, the holders of principal and interest are entitled to draw their money out of the 12th appropriation—it is evident he used no deceit.
3d article. It is manifest that he used no deceit with the Register-General or other officer, the account was sent forward in a positive manner, the amount of the nominal sum plain, no disguise in the transaction, the abstract was in his own name, from the nature of the account they might easily discover they were New-Loans, he did not certify genuine and assumable in his own case. The 1st and 2d articles—the 6th section provided a redemption pound for pound. Whatever was subscribable was redeemable. Attend to the Act of March 1789—"Many would be willing to exchange" others would not, shall those who are unwilling, be excluded, this is a misconstruction, any other construction than ours would be derogatory to the honor and dignity of the State.
If the defendant had been mistaken, here is a great question, whether he acted with a fraudulent design, or whether his actions were the result of his judgment, his opinion was not similated but genuine and positive that the New-Loans were subscribable to the loan of the United States. To convict him there ought to be proof clear and unequivocal; the consequences of that conviction are terrible, not only dismission from office, but incapacity of holding any post of honor or profit, the party who attempts to criminate should prove the charges. Six of the seven articles conclude with "Loss [Page 316] and injury to the commonwealth." What loss and injury? she only paid pound for pound, she received full value, she promised to pay pound for pound, consequently ought to pay full value, this is no injustice. Can any saving of money be put in competition with national honor and the immutable principles of justice? and yet six of these articles conclude—with loss and injury! I have no doubt of his construction of the law being true and genuine, I shall therefore leave the matter to the Senate, trusting that as the issue is important, so the decision will be honorable to the Comptroller-General.
MR. GIBSON.
Mr. Speaker, and Gentlemen of the Senate,
THE order which as Counsel for the defendant I shall observe in replying to the articles of impeachment, will conform to that pursued in the arrangement of the articles themselves. I shall accordingly begin with the first which appears of the greatest importance, and serves as an introduction to the others.
This article, after declaring that the New-Loans ceased to be a State-debt on the passing of the Act of March 1789, charges the defendant with certifying them to be subscribable to the loan of Congress as debts of Pennsylvania, contrary to his official trust, and as he well knew to the manifest injury of the commonwealth.
The substantial part of the article consists in the position that the New-Loans were not State debt after March 1789, nor of course subscribable to the loan, and grounds on this basis the subsequent charge of guilt in the defendant in declaring them to be subscribable.
To ascertain the weight of this position it will be necessary to ascend to the origin of these certificates, and to trace them from that time to the period mentioned in the article.
[Page 317]These certificates are derived from the Act of the 1st March 1786. Vol. 2. p. 417.
This Act after mentioning the occasion of passing it, directs the mode of issuing the certificates and places them upon the same footing with the most favored certificates of the state.
The first section declares "it is just and proper that the patriotic citizens of this State, who in the late arduous conflict, yielded their property and their personal services to the public use, and thereby eminently contributed to the establishment of the peace, liberty, and safety, of the United States of America, should be relieved, as far as circumstances will admit, from bearing an undue proportion of the public burthen, which ought to rest equally on all the citizens." The second proceeds to direct blank certificates to be procured, and prescribes the form, viz. The commonwealth of Pennsylvania has received on loan from [...] the [...] of [...] to be paid to the said [...] or bearer on or before the first day of March in the year of our Lord one thousand seven hundred and ninety-six, with interest from the [...] day of [...] at the rate of six per centum per annum to be paid half-yearly at the State-Treasury according to the directions of an Act of the General Assembly, passed on the [...] day of [...] . The third directs the loan to be opened, to continue so two years, and regulates the dates of the certificates to be issued. The fourth distinguishes the kinds of Continental certificates to be received. The sixth and seventh mention that certain Continental Loan-office certificates issued between 1 Sept. 1777 and 1 March 1778 are subject to liquidation by the scale of depreciation on their final redemption, altho' the possessors are entitled to receive the annual interest at full value on the nominal sum until such redemption takes place, and direct a reference to these certificates to be made on the New-Loans issued therefor; that on the payment of the principal they may be subject to the same liquidation.
[Page 318]The other sections provide for the payment of the interest on the New-Loans half-yearly—make them redeemable at the Land-office—provide for the Continental certificates received and for conducting the loan.
A Supplement to this Act was passed 28th March 1787, p. 508, extending the loan to those citizens who had made loans in the Continental Loan-offices of Delaware and New-Jersey.
From the whole complexion of this Act it appears that the Legislature considered the certificates issued in pursuance of it, or in other words the New-Loans, as effectually State debt, as those of any other description. For they on the face of the certificate promise to pay the principal on or before the year 1796, and the interest half-yearly until that time. The Land-office is open for their reception as for other certificates; and those which were peculiarly situated as already mentioned, are directed to be reduced to specie value on the payment of the principal.
The merit of the holders of these certificates was equally great, with the holders of any other. The debts were contracted in a common cause—the citizens of Pennsylvania were the creditors, and the State herself enjoyed in common with the other States, the benefits of their exertions.
That the provision made in this Act was designed to be permanent, and the New-Loan creditors considered by our Legislature of the most meritorious class, will appear in the strongest manner by referring to a resolution of the Legislature upon this subject on the 27th December 1786, Minutes of Assembly, p. 97.
This resolution took place upon a very pressing occasion—Congress being much embarrassed, appointed a committee to disclose to our Legislature the urgent state of their affairs, and to request an immediate grant of the impost to enable them to comply with the engagements of the Union.—The Legislature after paying all the attention due to the importance of the occasion, resolve in words as strong as language can express, that [Page 319] their engagements to their own citizens prevent them without a breach of good faith from complying with the request, at the same time informing Congress of their unfeigned regard for the honor of the United States, and of their unremitted exertions to do all in their power to support it. (The report is as follows.)
"The report of the committee to whom was referred the report of the committee of the late House of Assembly, appointed to confer with the honorable Mr. Monroe and Mr. King, read December 15th, was read the second time, and adopted as follows, viz.
"The committee, to whom was referred the report of a committee of the late House of Assembly, appointed to confer with the honorable Delegates on their mission from Congress, beg leave to report—
"That they have examined the object of the said report with the attention due to its importance:
"That they cannot help considering the debt of the United States in one aggregate point of view, and are of opinion that the principles of justice require like payment of every part, whether the same be due to foreigners or citizens:
"That there appears to have been due to the citizens of this commonwealth a sum which she has undertaken to pay them, and which probably amounts nearly to her proportion of the whole debt.
"That the appropriation of funds for that purpose is of such nature, that the report now referred to your committee (and which was adopted by the last Assembly) declares, "an immediate compliance with the recommendation would involve a breach of the faith of this state, pledged to the public creditors, citizens thereof, unless at the same time some further and other funds were provided for payment of the interest due and which shall become due to them:"
"That in the opinion of your committee, the magnitude of the appropriation just mentioned renders the provision alluded to in the report impracticable.
"That in the opinion of your committee, it would [Page 320] neither be just nor prudent to call on the citizens of Pennsylvania for payment of taxes, to discharge the money due to others, while that which is due to themselves is unprovided for.
"Your committee therefore propose the following resolution:
"That the Delegates of this State in Congress be instructed to assure the United States of the sincere desire of Pennsylvania, to make an adequate provision for all the debts of the Union; that this desire, fully evinced by her ready compliance with past requisitions, will equally operate on future determinations; that the distress of her citizens, to whom large sums were due, and who were at the same time compelled to pay their proportion of supplies for the current expenditures, called loudly for relief; that having waited in vain for a general assent to the measures proposed by Congress, until the grievance complained of could no longer be borne, it became necessary to assume the payment of those sums which were due by the Union to her own citizens; that in consequence, the funds now required by the United States were appropriated to this object, and the debts due to individuals were transferred to the State, whereby Pennsylvania became the creditor of the Union; that this House cannot divert the funds specified from the appropriation formerly made, until such solid provision be made for all the public debts, as that the annual interest payable to Pennsylvania will be a certain and sufficient fund for discharging those sums, which she is bound in the manner abovementioned to pay to her citizens, but that Pennsylvania will in the mean time account for her full quota of the sums necessary to discharge the interest, and instalments of principal, due or to become due by the United States, and, after deducting therefrom the interest she is entitled to receive, will regularly pay any balance that may remain due on such quota."
In this situation the New-Loans continued; a debt deliberately formed, and sanctioned by this resolution, [Page 321] until the Act of the 27th of March 1789, p. 694, which it is contended has destroyed the debt.
It may be proper to glance at the situation of affairs at the time of passing this Act, before we proceed to consider the Act itself. For by seeing how far the necessity of the times required an alteration, and what alteration was requisite to answer and remove that necessity, we obtain a good criterion to determine the true intent of the law;—as the first must have been the cause inducing the Legislature to pass it, and the last the object designed to be accomplished by its passing.
It appears then that by the Act of March 1786, the Legislature freely and openly established the loan upon permanent and liberal principles, that they had constituted a debt, which they considered themselves absolutely bound to discharge, and which they could not, consistently with good faith attempt to injure. In the year 1789, from the establishment of the Federal Constitution, Congress became entitled to the impost, and the State was in consequence deprived of her most useful and productive revenue, and was utterly unable without additional taxes, to discharge the annual demands, These additional taxes it would be too burthensome at this time to levy, as the citizens exclusive of those they paid in common, were then paying an annual land tax of £.76,000; many of the former were greatly in arrear, and of course no additional one would be punctually complied with. The best mode that occurred to remove these difficulties was to suspend the payments of the New-Loan debt, which from its greater magnitude pressed harder man any other. The suspension of the principal (which might easily be done as the payment could not be exacted by the contract before 1796) immediately closed the Land-office against it, which in consequence became a more productive fund for the redemption of the other debt, and together with the present stoppage of the interest, would remove the embarrassment occasioned by the loss of the impost. As Congress would probably provide for the public debts, [Page 322] being constitutionally authorised to do so, it would be but fair to permit these creditors to enjoy the benefits of such provision, as a compensation for the loss now suffered, and to enable them to become Continental creditors for that purpose.
That this was the intention of the Legislature we may not only presume from adverting to the situation of the times, but it also appears from the complexion of the Act itself.
The first section which constitutes a lengthy preamble, recites the Act of March 1786, with its supplement, and states the actual situation of things. That Congress have power to provide for the public debts; that they have become entitled to the impost, which the State consequently loses; that the aggregate fund, out of which the New-Loans were paid is diminished by the withdrawing of the impost; that Congress will no doubt provide for the creditors; and declares that on these considerations the relief granted by the preceding Acts should cease, provision should be made out of the Treasury of the United States, and that proper alterations are necessary.
This preamble conforms to the statement just given. As far as there is a recital and construction of the preceding Acts, they must both conform to them. The Legislature certainly had no design to deceive—nor to form a construction, nor to pursue measures, in consequence of such construction which the Acts themselves or public faith would not warrant. The provisions made in the former Acts were designed to be permanent, and if public necessity now compelled an alteration it justified it no further than the inability of the State required—that inability required no more than a temporary suspension of payment, and justice to the creditors demanded that to compensate this loss, they should be entitled to any benefits Congress might grant by exchanging their certificates should that measure become necessary. This Act should not be considered separately and distinctly, but relatively to the others on the subject, [Page 323] and the construction be determined from a general view of the whole.
The alterations intended are contained in the second section, which directs "That the interest due and to become due and payable upon all and every the certificates issued by the Comptroller-General in pursuance of the said recited Acts or either of them, shall be paid up so as to complete the payment of interest to four years; and that so much of every Act or Acts of General Assembly as directs or secures the payment of the principal sum or sums in the said certificates or any of them mentioned, or of the interest thereof beyond the term of four years shall be and the same is hereby repealed and made null and void."
The Legislature instead of repealing the Act of March 1786, or destroying the certificates, declaring them in the language of the impeachment to be no longer a debt, or evidence of a debt, due and owing from the State of Pennsylvania; merely repeat that part of it, which provides for the payment of the principal or the interest beyond 4 years: the remainder therefore of the Act continues in full force and every thing already completed stands unaffected. The expressions null and void could not be here intended to have any reference to the past, because the interest is directed to be paid on the whole to complete 4 years, and in order to comply with this requisition payments must in many instances be made of interest accruing after the passing of this Act, as in these cases its commencement was not four years before its passing; the whole clause therefore with respect to payment, operates on some as a present on others as a future prohibition, but in no instance as a retrospect.
Moreover had the Act of March 1789 entirely repealed the Act of March 1786, it would not have thereby effected the destruction of the certificates. They were completed under the Act while in full force, and could not be injured by any subsequent repeal. Like titles [Page 324] under laws that afterwards become obsolete, expire, or are repealed they still remain in full vigour.
The Act also of March 1789 so far from having a retrospect to the past, only refers to the present and the future, and besides the payment of the interest already mentioned, contemplates the probability that many New-Loan creditors may wish under the circumstances in which they are placed, to retake the Continental certificates loaned to the State, and therefore appropriates them a fund for the redemption of the New-Loans to such as chuse to take them; the 3d section regulating the proceeding—Council under whose direction the whole was placed, among other regulations direct by rule 3d that where an equal exchange cannot be made fresh New-Loan certificates shall be issued for the balance. These have accordingly been issued in numerous instances, and have always been considered of equal validity with those originally issued. This could not be justified had the law abolished the certificates, as their circulation would be destroyed, they would no longer exist a demand against the commonwealth, and of course no new ones could legally be issued.
Had the Legislature designed to annihilate the debt, they certainly would have taken effectual measures for that purpose and have abolished the certificates altogether. An apposite instance has taken place in North-Carolina, where the Legislature designing to destroy certain certificates, commonly called Warrenton certificates, which had corruptly issued, altho' under legal authority; they explicitly declare that all the certificates of this description are null and void and shall not be received in payment of taxes or any other public demand whatsoever. (North-Carolina Laws, p. 475.)
Let us suppose however for a moment, that the Legislature designed to destroy these certificates. It would then be contended that they were deprived of the power. At the time of passing this Act the Federal Constitution was in complete operation: The 10th section of the first article declares that "No State shall enter into any [Page 325] treaty, alliance or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto laws, or law impairing the obligation of contracts, or grant any title of nobility."—That the state by the first Act, contracted with the holders of New-Loans and engaged herself to pay them, can admit of no doubt, for independently of the Act itself, it is solemnly acknowledged in the resolution of December 1786. As little doubt can be entertained that if the Legislature in the last Act, intended to destroy the debt, it was invalidating the engagement and of course impairing the contract. This Act therefore if designed for this purpose is void by the Constitution of the United States. This Constitution was lately adopted; it had been fully debated before its adoption; many of the members of this Legislature had also been members of the Convention that adopted it, they must have been fully sensible of its obligatory force, and little inclined to act in direct, and it may be added, violent opposition to it.
To construe this law then, as an abolition of the debt, would be to make it violate every principle of national honor and justice—to operate in the nature of an ex post facto law, rescinding contracts fairly made, and solemnly acknowledged to be binding—it would make the Legislature act in direct opposition to their former explicit declarations and the Federal Constitution—it would in fine be supposing intentions very different from those that actuated the Legislature at the time.
We have seen then that the occasion did not require an abolition of the debt; that a repeal of the whole Act of March 1786 would not effect it, much less then a repeal of a particular part—that it would be contrary to the principles of justice and the Constitution to destroy it—of course we have no reason to presume that the Legislature intended it.
[Page 326]Indeed the intention of the Legislature as it may be collected from succeed [...]g acts upon this subject, appears to have been very foreign from abolishing the debt.
By an Act passed 7th April 1791, p. 51, the Governor is directed to negociate a loan with the bank of North-America, which when effected, together with the other funds are formed into an aggregate fund to discharge certain obligations of the commonwealth, and these are to be paid agreeably to the order they are arranged in by the Act. Among others are the arrearages of interest due on the New-Loan certificates. These certificates are here classed among the other obligations of the State, as certificates still in existence, and the arrearages of interest are directed to be paid prior to any future interest on the funded debt.
An Act passed 30th September 1791, page 147, giving relief to Sarah Caldwell and others, who had lost New-Loan certificates, after reciting the particulars of their case directs sufficient security to be given to indemnify the commonwealth against the certificates before the relief can be granted. It is remarkable also that this Act pursues exactly the same expressions in requiring the indemnity against the certificates with those used in a former Act passed for the relief of Sarah Caldwell long before the Act of March 1789, viz. 4th October 1788, page 535, sect. 2. If these certificates were destroyed by the Act of March 1789 they would no longer be recognized by the Legislature as certificates of this state—If the state was not answerable for the amount of them it would be useless to require an indemnification— This indemnification is general, being intended to guard the state against any injury that could possibly arise from granting relief in the premises, or the New-Loans tho' lost might still be in circulation. As the same requisitions are made in this Act that are made in the first mentioned one which preceded the Act of March 1789 and in the same words; we may further conclude, that the Legislature considered them as much obligations now [Page 327] as they were then, and prudently provided against any contingent injury that might otherwise arise, from granting the relief intended by the Act.
The 3d section of an Act passed 7th of April 1791, page 54, directs the injurious and impolitic expedient of re-issuing the bills of credit which the public faith was already plighted to destroy; to pay off the arrearages of interest due on the New-Loans, in order that they might not interfere with the arrangements of the commonwealth for subscribing to the loan of Congress. Their interference must certainly have been a matter of great importance to render so injurious an expedient necessary in order to prevent it; but in what manner it may be asked can they possibly interfere? If they no longer continue State debt, the State is no longer under an obligation to pay them, she therefore on this account could have no concern—if they are not subscribable to the loan of Congress, they could not interfere with the arrangements of the State for subscribing to that loan; for they would be of no validity, and if offered for subscription, would undoubtedly be rejected. The Continental certificates which the State had received in lieu of the New-Loans, she had already appropriated as a fund for redeeming them, and if they were exchanged for the New-Loans, these last would not be subscribed by the State, because the law of the United States which authorised the subscription, expressly directed an equivalent to be surrendered up, before interest could be paid, and as the State in this instance, would have parted with the equivalent it would be injurious to do it. The New-Loans could therefore interfere with these arrangements in no other way than this; they were at this time both State debt, and subscribable to the loan of Congress; their quantity (if subscribed) would exclude the other State creditors from subcribing, and deprive the State of the opportunity she now had, of discharging great part of her debts, and of making ample provision for the future discharge of the remainder. In order to improve this [Page 328] favourable opportunity, it became a matter of most serious concern to exclude these certificates from subscription, and the State was compelled thro' the want of a better, to pursue the injurious expedient mentioned in the Act, which it was presumed would be, as it actually was, counterbalanced by the result.
By virtue of the Act of Congress of the 4th of August, 1790, two loans were opened; one of the domestic debt to its full amount; the other of the State debts to the amount of 21,500,000 dollars, which were assumed by the United States, under the exceptions and restrictions laid down in the Act. Of these 21,500,000 dollars, the portion allotted to Pennsylvania was, 2,200,000, which was payable in those state certificates which prior to the 1st January, 1790, had issued for national purposes. The debt of Pennsylvania was at this time classed under three descriptions, Funded debt, Depreciation debt, and New-Loan debt. On the whole of the Funded, and part of the Depreciation (thence called Funded Depreciation) the State paid an interest of 6 per cent.; on the unfounded depreciation, (which include the remainder) interest tho' payable, had never been paid as no funds had been appropriated for the purpose: and on the New-Loans, no interest except the 4 year's arrears was at this time paying. The whole amount of the funded and depreciation debt, did not exceed 1,500,000 dollars; the New-Loans alone exceeded 2,200,000 the sum assumed. If therefore the New-Loans could be excluded from subscription, and the holders induced to redeem them by the Continental certificates, at the same time proper encouragement given to those State creditors, to whom the State was paying interest, viz. the holders of the funded debt, and funded depreciation, to subscribe to the State loan; the State would immediately get rid of all her New-Loan debt, she would have the amount of the other subscribed, redeemed by virtue of the subscription— her revenues would be relieved from the greater part of the annual interest she was now paying, as upon the plan [Page 329] she was pursuing, the interest she would receive from the unsubscribed residuum, would compensate the subscribers for what they would otherwise loose by subscribing. If on the contrary, the New-Loans were subscribed, they would exclude the others, and add to the burthens of the State. No time however could be more favourable than the present, for accomplishing the plan, and no mode better adapted to the purpose, than the one pursued.
In the domestic loan, the interest subscribed, was separated from the principal, and exclusively became 3 per cent. stock: two thirds of the principal became 6 per cent. stock, and the remaining third, 6 per cents deferred. In the State loan the principal and interest were thrown into a common mass, one third of which was converted into 3 per cent. stock, two thirds of the remaining two thirds into 6 per cent. stock, and one third of two thirds into 6 per cents. deferred. From this last arrangement it followed that unless the interest subscribed, amounted to one third of the whole sum subscribed so much of the principal as equalled this deficiency, supplied its place and was converted into 3 per cents. In order that the interest should amount to one third of the whole, it required an arrearage of eight years and a quarter. In the case therefore of the New-Loans, when the arrearages was eight years and a quarter, the holder might subscribe them to the State loan, or exchange them for the Continental certificates and subscribe these to the domestic loan, since in both cases the interest alone, became 3 per cent. stock. Where the arrear was greater it was his interest to subscribe the New-Loan in preference to the Continental certificate, as the excess of interest became 6 per cent. stock or 6 per cents. deferred. Where it was less it became injurious to subscribe them because part of the principal went to supply the deficiency. By paying off four years immediately on the New-Loans, and discountenancing their subscription to the State loan, (which was done by the Act passed two days afterwards, making the arrangements [Page 330] alluded to in this Act, and which gave encouragement only to the subscription of certificates on which an interest was then paying,) the arrears of interest were reduced below eight years and a quarter, it became the interest of the holder to redeem the New-Loan by the Continental, and subscribe to the domestic loan. It was also his interest to receive the 4 years arrear in preference to subscribing the New-Loan; as the indents to be paid the State on the exchange to equalize the interest, were then low, the amount he paid the State on the New-Loan became due to him on the Continental, and the money paid him by the State became a new principal. The State by agreeing to pay 6 per cent. on the deferred, and 3 per cent. on the 3 per cent. stock, created by the subscription of the other State debt, was a sufficient inducement to the creditor to subscribe, as by this mean the arrears of interest were converted into 6 per cent. stock.
The State by this policy got rid of most of the New-Loans; redeemed 650,000 dollars of her other debt; and became entitled to an interest of a residuum of 1,550,000 dollars, which amounted to nearly 56,000 dollars annually or upwards of £. 20,000. These were the advantages she promised herself from the plan she had then formed; they appeared sufficiently important to be purchased at the expence of this ruinous expedient, and they were effectually secured, in consequence of the measures pursued. These two Acts as effectually shew the ideas the Legislature entertained of the subscribability of New-Loans as the most express declaration that could possibly be made on the subject.
From the foregoing survey it sufficiently appears, that the Act of March, 1789, did not destroy the New-Loans, that in the opinion of the Legislature they still continued a debt, and were in their estimation subscribable to the loan of the United States. It will now be proper to consider the Act establishing that loan and to point out that part which admits their subscription.
The Act of Congress of the 4th of August 1790, [Page 331] continued by that of the 8th of May 1792, was formed to introduce order and harmony into the public finances, by reducing to a few kinds the great variety of public securities;—to make a Continental debt of all those State certificates which had issued for national purposes —and to give security and value to the whole by preventing counterfeits, and appropriating permanent funds for their regular payment. It therefore in the 13th section, page 93, assumes all State certificates or notes which had issued prior to the first of January 1790, as compensations or expenditures for services or supplies towards the prosecution of the war, excepting the Warrenton certificates of North-Carolina which were expressly excluded.
The New-Loans clearly come within this description. They were directed to issue, and consequently did issue, only for Continental certificates which had issued for these services. The services themselves were the original inducement for issuing them, and Continental certificates of this description only were received.
If this section is construed strictly according to the letter the depreciation certificates about which there has existed no doubt would also be excluded, as they strictly speaking did not issue for services but to compensate losses occasioned by the depreciation of the soldiers pay; tho' here as in the case of the New-Loans, the services rendered were the original inducement.
This construction would also operate to exclude a considerable portion of the funded debt, as it stood at the time of the loan. For altho' the greater part of it originally issued agreeably to the letter of the Act, as compensations or expenditures for services or supplies, yet, for the convenience of payments at the Land-office, and to facilitate their circulation, the original certificates were frequently surrendered up, and new ones issued for different sums, and in different numbers as suited the convenience of the party. These last therefore having issued for other certificates would agreeably to this strict construction be excluded.
[Page 332]In order to accomplish the design of this Act it was as necessary to assume the New-Loans as any other certificates. They were certificates of the State, and the State was a creditor of the United States to an equal amount. Congress therefore by assuming them, and directing that before interest could be paid an equal amount of Continental certificates should be surrendered up, at once withdrew both from circulation. As a holder of New-Loans, the United States could exchange with the State for an equal amount of Continental certificates, and the sum subscribed, for which the State would be debited in her accounts with the Union, she could balance by presenting an equal amount of New-Loans which she had redeemed in this way, and which would be on the same footing with the other certificates she had redeemed.
Could any doubt exist respecting the construction of the 13th section, it must be removed by the 18th, page 97, which considering all certificates situated like the New-Loans, as subscribable under the 13th section makes the necessary regulations to prevent any inconvenience that might otherwise ensue.
The Secretary of the Treasury in his instructions to Mr. Smith the Commissioner of Loans for this State, declares they are subscribable, and directs arrangements in consequence. In his letters to Mr. Smith, he constantly considers them subscribable. His negociations with our government are founded on a belief that they have been actually subscribed, and turn at last upon the fact of their having been subscribed or not.
If an inconvenience were to arise to the State in consequence of their subscription, this would not destroy their subscribability. That arises from the assumption of Congress and not from any arrangement of the State. The loan is opened to the State creditors and the consent or refusal of the State has no concern with it. Congress may assume what debts they please, and the creditor may transfer to them all debts of a transferrable nature. This is a matter entirely between Congress and the [Page 333] creditor in which the State cannot interfere more than in the transfer from citizen to citizen. In the settlement of accounts between the United States and this state, the interest commences, and either party may allow or reject such items as are improper, but this can have no effect upon the original assumption, which concerns merely Congress and the state creditor.
One object in view by the assumption was to withdraw the creditor, from the precarious and frequently inadequate relief of State provisions. These creditors were certainly of this description, and in no case except in others similarly circumstanced could Congress assume certificates with so much safety, as they had issued for debts originally liquidated and adjusted by the United States.
I hope then it has been satisfactorily proved, that the New-Loans were in their first establishment State debt; placed on a permanent footing, and highly favoured; that their destruction was not designed by the Act of March 1789; that at succeeding periods they have been considered as State debt and subscribable by the Legislature itself, of course the subscriptions made have been conformable to law.
We now come to the position which forms the essence of the second article, viz. that the New-Loans were not nor could in any way be contemplated as objects of redemption by the Act of April 1792.
This Act was designed to discharge the certificates of the State, and her other obligations which the public interest required and which it was now in the power of the State to perform. Our Legislature had always conceived it to be more advantageous to the State to redeem her certificates in the cases where she had it in her power thro' the medium of the United States in preference to paying them off and making that payment a credit in her accounts with the Union. This was evident in the first subscription to the State loan which was promoted by the state, and this was their wish in the Act of April 1792 as is apparent from the Act itself. [Page 334] By the first subscription the State redeemed all the certificates that were subscribed, and only paid in return that portion of interest which the United States did not, which payment was to continue only until the United States paid it. She now wished to redeem all her debt inclusive of the evidences of this obligation, commonly called Purpart certificates, and altho' she in the present case, paid off the whole in the first instance, yet she received from the United States an equivalent for the greater part of it, which was an active and productive stock annually encreasing in value, and which by good management might be usefully appropriated. The difference in value between the certificates received and the money paid by the State in redemption, which was the only loss sustained by this mode, (for if they were of equal value it would only amount to a mutual exchange of equal interests) was of less consequence, than paying off the whole at once, and that payment remaining a dormant claim upon the Union, until the final adjustment of accounts and provision for the balance should call it into activity. It should be considered also that Pennsylvania was at this time deemed a creditor State, to a considerable amount and as in other cases of debtor and creditor, it was more to her advantage to redeem her certificates by way of set-off in this account than to advance more money on it and thereby swell the credit further. Moreover upon striking the balance of this account the State had no reason to presume that she would be more favoured in the discharge of it, than the citizen creditors had been in the payment of their debts, but that certificates would issue to her in the same proportions, they had already issued to them. It was therefore better to receive them now and make them immediately productive than wait a future day.
The Act therefore of April, 1792, after appropriating the 3 per cent. stock as a redeeming fund, and directing certain debts to be paid from the proceeds of the sale; contemplates in the sixth section a further provision to be made by Congress, and directs that all [Page 335] certificates entitled to such provisions, shall be entitled to the benefits of this Act upon transferring to the state all the benefits the creditor was to enjoy from the provision. The 8th of May following the loan was extended by Congress upon the same terms, and of course included all certificates that were subscribable to the first. This Act of April 1792 directing all certificates to be paid that were subscribable of course redeemed them. The New-Loans have already been proved to be subscribable to this loan; and are therefore within the provisions of this Act. That they came within the view of the Legislature at the time, and were designed to be redeemed, will appear from the following considerations. The Legislature knew they were in circulation. They had passed laws relieving those who had lost them. They had endeavoured to prevent their subscription to the first loan, and promote their redemption from the fund provided. In this design they had succeeded so far as to redeem the greater quantity; the whole amount now in circulation not exceeding fifty thousand pounds, a sum comparatively small. Altho' interest was not now paying, it was accruing, and the arrear becoming great. Though the Continental certificates were a fund for their redemption, yet the creditor could not be compelled to redeem them in that way. The year 1796 was approaching when they were to be paid agreeably to contract. The extension of the first loan was contemplated in this Act, as the measure most probable, which they knew would include them. In fine, every argument that applies to prove the necessity of redeeming any part of the public debt, applies with equal force in favor of the redemption of the New-Loans.
The third article charges him with not consulting with the Governor, nor the Register-General; nor discriminating the certificates on the abstracts, by which he declared them assumable, nor on the certificate by which he declared them redeemable, by which means [Page 336] the checks of office were broken, and the other officers deluded into error.
Both loans were opened with the concurrence and approbation of our Legislature, who promoted subscriptions of state debt by laws enacted for the purpose. It of course became the duty of the officers of this state who had it in their power to facilitate the subscription by their assistance. Mr. Smith the conductor of the loan in this state, applied to the defendant before the opening of the first loan (see page 271) to give him a description of the several sorts of certificates subscribable, and such checks as would enable him to conduct the business with security. The defendant was the only person to apply to, he having issued all the certificates of the state, and having all the checks in his possession, he accordingly gives him the required information and at the same time his opinion that the New-Loans were subscribable. None can presume he had any interest at this time in giving this opinion, as the loan closed without any subscription of New-Loans being made.
After the closing of the loan; in all the conferences which took place on the subject of New-Loans, by the direction of the Governor, and which were reported to him, the defendant continues of the same opinion; no exception is made to its propriety, and all matters rested in this way, till the opening of the second loan.
Before the passing of the Act of April 1792, the defendant opposed that plan of redemption and proposed another to the Governor in which New-Loans are expressly provided for. He deprecated the evil consequences which that Act in its original comprehensive form, would probably occasion, and opposed its passing by speaking to members of both Houses on the subject, and pointing them out, (see page 279 to 286.) The Act was afterwards narrowed down to include certificates only. Had he designed to speculate on the Act, it would have been his interest to encourage its passing, or at least not to oppose it; after it became a law he was as much entitled to its benefits as another citizen.
[Page 337]On the opening of the second loan it was discovered, that non-assumable certificates had been subscribed, and the owners in consequence deprived of them until the closing of the loan, at which time they would be returned. To prevent this inconvenience in future, the defendant undertook to examine the certificates brought for subscription, and if they were genuine and assumable, to mark them so. His conduct in this transaction was intended to oblige and assist all parties, it was an undertaking of great trouble, and no profit to himself; the information given, was for the use of Mr. Smith and the creditors who might rely upon it or not. There was no law forbidding such proceeding. It was further in advancement of the interest and laws of the State. The mode pursued was the dictate of the moment, the words "genuine and assumable" being sometimes written on the abstract, at other times on the certificate, and in both cases signed with the initials of his name. The matter was notorious. His opinion openly given. No objections advanced against it, and the loan closed without any idea of criminality in his conduct being entertained by any body.
With the form of the abstracts the defendant had no concern, That was settled by the officers of the United States. Blank forms were printed for general convenience, and printed forms were generally used. As all the certificates assumable were equally so; there could be no occasion to discriminate on the abstracts, their several kinds. If it had been necessary as the information was for Mr. Smith he would have requested it. It was not the duty of the defendant to do it, as he had merely undertaken, and that voluntarily to declare them genuine and assumable; and it would require more of his time than his official engagements would permit. Since all certificates subscribable were equally redeemable, there could be no occasion to discriminate on the abstract on the transfer to the State their several kinds, because they were to be equally paid. If it were, the Register-General should have done it, as they came before [Page 338] him in the first instance, and it is his duty to register the accounts of the State. After his examination, they were presented to the Comptroller-General accompanied with a demand on the State for payment. The abstracts themselves afforded every information that a discrimination could, for the dates of interest marked on the abstracts, distinguished the several kinds of certificates; the interest on the funded debts commencing on one fixed date, that on the depreciation on another, and that of the New-Loans on various and mixed dates, all of them however distinct from the other two. There could have been no design in the defendant to conceal any circumstance relating to the New-Loans from the Register-General as they had had a conversation on the subject, in the course of which they both concurred in opinion that the New-Loans were subscribable and redeemable, and the Register-General afterwards passed the accounts knowing them to contain New-Loans.
His own subscription being openly made in his own name, confutes the idea of any clandestine design, and strongly shews his thorough conviction of being right in his opinion. Had he supposed the contrary and wished to deceive, how easy would it have been to divide the sum into small parcels, and procure other persons to subscribe for him in their own names. The idea that he meant to deceive until he obtained possession of the money which seems to be advanced in this article, is too futile to have any weight and was perhaps introduced more from inadvertence than design. Detection would eventually be certain; and the consequences of that detection would be disappointment and disgrace. His own subscription was not hurried thro' the offices, it remained the usual time with the Register-General who might, and probably did, examine every item.
No checks of office have been broken. No official consultation is required by law in any instance; nor can there legally, be any interference of the Governor [Page 339] except upon a difference of opinion between the Comptroller and Register in which case he is called in to decide: Here was no such difference of opinion and of course there could be no interference of the Governor. The Governor also knew from the defendant's former communications, and his late proposal for new modelling the debt, made at the time the Act was before the Legislature, that he considered the New-Loans as a debt and at a future time to be redeemed. The certificate presented to the Governor on which his warrant was grounded was in the usual form, there could therefore be no concealment implied in it. The accounts which were presented and adjusted and in consequence of which adjustment this certificate was drawn, were also presented in the usual form and therefore would not authorise any deviation from the usual course of proceeding. Any cause that would require a discrimination of the New-Loans would also require a discrimination of the funded debt and the depreciation certificates. Yet no such discrimination has been made and no complaint has arisen in consequence.
If any interference in the second loan by the defendant was wrong from principle it was equally wrong in the first loan, for the two loans were precisely upon the same footing. Yet no fault has been found with him for it; and he has only been criminal according to the articles for acting between the 10th of April, and 1st of August 1792, the principle is therefore admitted to be right and the execution only wrong.
But if it be (as we hope we have proved) that the New-Loans were subscribable and redeemable, that all the proceedings on his part have been regular and legal; he has acted in every instance right and is a subject of commendation rather than blame.
Even on the supposition of his having formed a wrong opinion; that opinion has been proved to be formed, when there was no interest to induce him to form it. To be advanced upon every public occasion that required it. To be persisted in and mentioned at a time when [Page 340] a selfish interest would induce a concealment; and we cannot look for a change, when it had received sanction, from time, from meeting with no opposition of sentiment, from the concurrence of others in the same, and when nothing additional arose to occasion an alteration. Even then upon the supposition the opinion on examination shall be found erroneous; it was innocently formed and cannot subject its author to the pains and penalties of an impeachment.
The following positions then have it is hoped been fully established. That the New-Loan certificates continued a State debt notwithstanding the Act of March 1789, which did not contemplate their destruction, and which could not effect it had it been its design. That they were subscribable to the loans of the United States and known and acknowledged to be so by the Legislature itself. Than they were redeemable by the Act of April 1792, and designed to be so by the Legislature that passed the Act. That no checks of office have been broken, of course the defendant has broken none. That his conduct throughout has been open, candid and sincere, and strictly conformable to law in every particular. That his opinion on the subject is right and so innocent in its formation that had it been wrong he could not be amenable to punishment in this prosecution.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee of the whole then proceeded to the Senate-chamber for that purpose.
"After some time,
"The committee of the whole returned.
[Page 341]"The Chairman left the chair and the Speaker resumed it.
"The Chairman then informed the House that the committee of the whole had attended the trial of John Nicholson, Comptroller-General.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported that they had made further progress."
Tenth day of the trial. MONDAY, March 10.
MR. RAWLE.
Mr. Speaker, and Gentlemen of the Senate,
I HAVE the honor of being of counsel for the House of Representatives of the commonwealth of Pennsylvania who are the exclusive Representatives of the People of this State, and they found it their indispensible duty to execute their constitutional right of bringing before the Senate, in this instance, the exclusive Judges, a public officer who has long superintended the finances of the State, under a serious charge.
John Nicholson, Comptroller-General of Pennsylvania is accused of having violated the confidence and betrayed the trust reposed in him. Upon common cases the hand of the law is directed by the ordinary courts of criminal jurisdiction. The Senate is constitutionally assembled to decide upon a cause in which the interests of a People are involved to which the common limits of practical law are scarcely applicable.
A cause which requires the more consideration as it is the more rare, since public trusts are confided but to a few, and since violation of these trusts are happily uncommon, the present is recorded as only the first [Page 342] under the present Constitution of Pennsylvania, every g [...] citizen will wish it may be the last.
To constitute an offence there must be a concurrence of fact and of intention.
The errors of the judgment cannot be criminally punished.
But when by the aid of testimony we probe the heart, when motives unlawful from the station and the opportunities of the agent are already proved to be the excitements to action—then the act is closed in the list of offences, and the voice of society calls for its judicial animadversion.
Of offences there are two general classes, one is found in the breach of any positive law, municipal institutions, or statutes.
The other in the breach of a law not of human institution but impressed by nature on the heart.
The penalty of the first may be incurred without any criminal intentions, but the other depends upon the will, ignorance may at times occasion a lapse into the first, the other is known to all men at all times, in all places.
The defendant's counsel have anticipated another very obvious division of the question; that is, that the Comptroller acted under a proper or mistaken construction of the law. If the latter, corrupt motives must be plainly charged, and clearly proved.
If we shew that the defendant made a profit against law, the impeachment is supported. If we shew that impelled by improper motives, by artifice and dexterity he evaded, altho' he did not break the law, it is equally supported, and the commonwealth is entitled to judgement against him.
Something has been said as to the manner of framing the charges.
It has been stated only to be waved, and at the same time the Senate is informed that the defendant does not well know what he is to answer, you're told that he will go fully into his answer.
[Page 343]If we pass this over we hear of it as a defeat. If we confute the objection we are told they did not mean to rely on it.
But we aver the charges are exhibited in the authorized and customary form, that the minute certainties of indictments are not requisite, that nothing is intentionally dark or tending to deceive, and that as in some instances of indictments the defendant may require a specification, these are framed conformably to well established precedents in another country. (Here Mr. Rawle quoted 2 vol. Woodeson, page 605, and Foster's reports of Crown Laws, 389, 390, to shew that in barratry the defendant is not compelled to answer until a specification of the charges is exhibited; and said, such was not requisite in impeachments, and therefore concluded it was only want of form and accuracy had been attempted to be shewn; Mr. Lewis interrupted him, and said, It is not to the form but to the substance of the articles of impeachment that he intended to take exception.)
The accusation is, in substance divided into six different and substantial heads which Mr. Rawle then enumerated including the 5th and 6th articles in one.
1. Declaring New-Loan certificates to be subscribable.
2. Declaring them to be redeemable.
3. Deceiving the Governor.
4. By the aid of such deception drawing money out of a fund otherwise appropriated.
5. Buying certificates actually delivered to him for exchange.
6. Converting to his own use certificates actually exchanged.
The formal arrangement of these charges is comprised in seven articles of impeachment. In all them he is charged with criminal motives, with the Commission of a misdemeanor; and if the evidence is adequate to the charges there is no doubt but the result will be a judgment against the Comptroller-General.
[Page 344]
FIRST ARTICLE
Was read by Mr. Rawle in a short and abridged manner, retaining only the principal data, such as facts, and dates; omitting the useless appendages of amplification.
The general charges are thus opened with the statement of a fact resulting from the plain and obvious text of the law and finally reducible to this single point: Whether there existed a Legislative power in the country.
If the Legislative power resided in the General Assembly, and, if the Act of 27th March 1789 was passed by that General Assembly we have then only to enquire whether it did not abolish the former engagements of the State and reduce the certificates to mere receipts for other certificates.
Without any efforts of ingenuity, or having recourse to messages, votes, resolutions and other proceedings of of the Legislature from their minutes, we are led to acknowledge the affirmative from the existence of the Act of March 27, 1789, and to ascertain with accuracy the operation of it, we are led to consider the nature of New-Loans previous to the passing of the law.
The Act of March 1, 1786, depended upon the circumstances of the public at the time, the state possessed the impost, and appropriated it to pay the interest of the reputed quota of the State debt incurred during the late war.
In the year 1785 the Legislature affected by the distresses and yielding to the clamours of many of their own citizens, creditors of the United States, finding itself possessed of a great and growing fund arising from the imposts—by its Act of 16th March 1785, appropriated such a proportion of that fund with the arrearages of the taxes as should amount to £. 123,932, the estimated quota of this State of the annual interest of the federal debt.
This Act tho' little noticed, yet deserves no small degree of preliminary attention.
[Page 345]13th section. The State-Treasurer is to pay that sum annually to the Continental Loan-officer.
11th section. Monies arising from imposts and arrearages of taxes so far as released from former appropriations are respectively and expressly appropriated.
Having thus observed, that, this Act, the parent of the New-Loan Act, could not in its outset be considered as otherwise than temporary, for the chief part of the impost being the principal fund, remained only the conditional property of the State; Pennsylvania having by her Act of 23d September, 1783, acceded to the requisition of Congress in regard to the 5 per cent. and the annual tax as soon as thirteen States should accede thereto.
To this reference appears in the second and third sections of the Act of 16th March 1785.
In the 4th section, one or more have not complied.
In the 5th section, considerable time may elapse.
In the 6th section, citizens labour under hardships.
In the 7th section, relief to them, and to accord with such measures as the United States in their wisdom may adopt.
By this it is apparent that the provision made by Pennsylvania was temporary, whereas the United States did resolve for 25 years. The declarations of the intentions of our Legislature contained in the last recited sections are expressly affected by the 18th section, in which the provisional limitation of the Act is contained, and this express designation of the original fund confutes one of the arguments of the counsel who opened the defence, (Mr. Tilghman.)
I need not enter into messages or resolutions to discover the signification of this provision; it was intended and declared to be temporary and conditional, and as such the Legislature has always acted upon it.
We are told it is of no use to the creditors out of what fund this debt is to be paid, whereas the fund is held out and the party accepts it on the faith of that fund, and that only.
[Page 346]One of the Managers, (Mr. Morgan) has stated that Congress was dissatisfied, (see page 211) this leads to consider the Act of March 1, 1786.
The articles of Confederation gave no power to provide the necessary funds for the payment of the public debts. Hope and view on one side, and the actual state of things on the other. For these reasons the Act of March 1, 1786 passed:—
First, The Act is expressly occasioned by the resolution of Congress of the 24th of September 1785, if the resolution had not passed the Act would not have been made. (Mr. Rawle read the preamble to the Act 1st March, 1786.)
Secondly, The aggregate conditionally assigned by the Act of 16th March 1785 is the only fund appropriated by the Act of March 1, 1786.
Thirdly, There is no repeal of the conditional clause in Act of the 16th March 1785 by the Act of March 1, 1786; the spirit is the same, only differing in mode, and form from the Act March 16th 1785.
Fourthly, There is no assumption of the principal, for the receivability of the certificates in the Land-office was common to almost all kinds of Continental certificates.
The difficulties of the country increasing, the necessity of a common head became more apparent, the Federal Constitution under which we now so happily live, was formed and recommended the 17th September, 1787. It was adopted by Pennsylvania the 13th of December following, and by nine States on the 21st of June, 1788. The Act of 27th March, 1789 adheres to the original contract, it does not deviate from it. The Legislature of Pennsylvania on the 27th of March, 1789, found the Constitution thus adopted and ready to be put in execution, it consequently found the fund liable to be withdrawn, it found the United States able to do justice to her own creditors. The people their constituents who surely included the creditors had assented to the subtraction of the fund from their first application. In adherence therefore to the original contract, [Page 347] they confirmed the payment of interest during the intermediate interval from the first steps taken by Pennsylvania to the cessation of the fund: They terminated the payment from that time afterwards.
In the great scale upon which this ought to be considered, the difference of a few months is not to be regarded: The fund ceased the 1st August, 1789, four months after the passing of the Act, when the General Government took place.
If the Act of March, 1789 was inactive and wanted efficacy until that time, it then received it, the original contract was terminated. After that, none who agreed to the federal Constitution can oppose this construction. This subject was ably handled by the young gentleman (Mr. Gibson) who spoke last, whose talents exhibited on this occasion are an honour to himself, and promise to be an ornament to his country.
The Act of March 1789 repealed part of the law of March 1786, the law of 1786 repealed that of 1785.
After the passing of the Act of March 1789 nothing of the Act of 1786 remained except what related to the payment of interest: For by that Act three things were to be done, 1. Receiving certificates on loan; 2. Delivering out New-Loans in exchange for others. 3. The payment of interest; the loan closed with the Act of March 1789, after that time no certificates could be issued, certificates issued by the Comptroller-General after that period are unwarranted by law. Issuing was unnecessary, the Act of March 1789 is explained and arguments against our position are answered by this explanation.
The Act of March 1786 was only a loan, it is so declared in every part of the bill. The obligation arising from a loan is ended with the restitution of the thing loaned. A. lends B. certificates to be paid the 1st of May, B. returns the certificates, the loan is ended. Therefore the State is discharged on the return of the Continental certificates, (Mr. Rawle then adverted to the certificates and the length of time, and it was acknowledged [Page 348] by Pennsylvania as a loan to be returned by the first March 1796, or sooner if convenient, and then the whole contract to be at an end, the four year's interest being paid.)
Sir, It cannot be supposed the Legislature of Pennsylvania intended to go farther in 1786 than they meant to go in 1785.
In the summer of 1786 the Convention met at Annapolis; on the 30th December same year delegates were appointed to the General Convention; at this time a federal Union was expected; the answer returned by the Assembly, 27th December 1786, to Congress is not surprising, (see page 319, 320).
We do then aver, that the Act of March 1786 was only a loan, little comment need be made on the enacting clauses of the law, as the only engagement pretended was not to discharge the principal, but to advance the interest on account of the United States: The Act of March 1789 in unequivocal terms puts an end to that part of the contract, and therefore the New-Loans were not subscribable to the loan opened by Congress. He certified them to be subscribable, we aver the contrary. The public debt of the United States in June 1790 was divided into three classes, 1. Foreign, 2. Domestic, and 3. State debt.
The foreign debt was something more than ten millions: The domestic debt was about forty or fifty millions. Of the State debts an estimate cannot easily be made. To the question what debts were intended to be assumed by Congress, circumstanced as the Union then was, it was proposed to assume the State debts; and to the question, What were the State debts? the answer is obvious, debts at that time due by the State.
Mr. Rawle then read the 13th section of the Act of Congress 4th August 1790, entitled "An Act making provision for the debt of the United States," the sum assumed being 21,500,000 dollars. The two general heads of SERVICES and SUPPLIES describe the consideration, no other certificates admissible; and the expression [Page 349] in the Act, "debts by them respectively owing," therefore a debt of that kind would embarrass individual States if the fund was withdrawn; Pennsylvania had then a peculiar and proper debt, and unless the vacant land and the Continental certificates had afforded a fund, she would be considerably embarrassed, the magnitude of her debt is not easily ascertained now, if understood at first; the holders had no other to look to, setting aside the bills of credit: the amount of funded and unfunded depreciation certificates was about four or five hundred thousand pounds of our money, these were admitted into the general class as being issued for services or supplies in prosecuting the war and for the expences incurred during the general conflict.
The New-Loans were not within this description, they were only available to withdraw the Continental certificates, and four year's interest; this is the fact, so far as we can gather the evidences of the intentions of the Legislature, and as far as we can collect a knowledge of our finances from the laws of our country.
The commonwealth was under no obligation to redeem the New-Loans.
Certificates, therefore originally loaned were divided into two classes.
1. Those which were the property of the State from the New-Loans having been laid out in the purchase of land.
2. Those which were to be presented to the holders presenting the New-Loan certificate for re-exchange.
By the Act of 7th April 1791, no officer of your commonwealth by the Acts of your Legislature could subscribe State debts. Her Continental certificates were an incumbrance to her until the New-Loan certificates were brought forward on the domestic loan.
Two days afterwards, the 9th April 1791, the purpart Act was passed by the Legislature; if the State of Pennsylvania considered New-Loans as a debt, and subscribable she would have included them in that law. The Act of 30th March 1791 by which the Treasurer [Page 350] is directed to subscribe, refers to and depends upon the provision of the Act 1st April 1790. By the Act of April 1, 1790 it had been directed that they should be deposited with the State-Treasurer: could he part from them without the order of the Legislature? It was not till the 30th March 1791 that an application was made of them. Then they were subscribed, not to the State, but to the domestic loan.
By this exposition it is manifest that the law of the 27th March 1789 repealed every former provision, and that the New-Loan certificates were only a demand to get back the Continental certificates and for equalizing the interest for four years.
I shall not consider the Constitution of the United States, so far as relates to the Acts of a State with its own citizens; no contract was impaired, no ex post facto law had been passed; it is not necessary on our part to introduce any consideration about it.
Yet in a charge of an highly criminal nature some extenuation is sought in the endeavour to establish that this was not a single construction of the law; but that others, whose judgments were not perverted by any corrupt motives, were of the same opinion; that the same opinion was entertained by the principal officers of the United States' Treasury. If our construction is right, contrary opinions are erroneous; but had he, with all the light that ought to have been communicated to him, held the same opinion, what shelter can the misconduct of one officer find in the error of another. It is not uncommon to justify the culpable transactions of some by the erroneous judgments of other individuals; if they do not mean this as an extenuation, it is intended as a justification, if not designed as one, or the other, it ought not to be brought forward at all.
Mr. Rawle then asked, whether the opinion of the Secretary of the United States, a most respectable officer, should be a justification and a proof of the innocence of the defendant, whereas the Secretary renounced his former opinion on being better informed, this information [Page 351] ought to have been furnished by the Comptroller-General. This opinion of the Secretary should not be depended upon, inasmuch as he renounced the same on better information.
Mr. Rawle then read, commented, and made remarks on the circular letter of Mr. A. Hamilton to the Governors of the respective States, (see page 275-6). Then on letter Dallas to Nicholson, (page 276)—then on letter (page 102-3)—then letter Dallas to Nicholson (page 220)—then letter Mr. Nicholson to Governor (page 220-1-2)—then on letter Mr. Dallas to Mr. Nicholson, (page 277)—then on letter Mr. Nicholson to Mr. Hamilton, (page 277)—then on letter Mr. Nicholson to Mr. Hamilton, (page 278).
So far as these communications extend, it is apparent from the evidence or testimony of the Secretary (see his testimony page 287-8-9) that no information of the repealing law of the 27th March 1789 was ever brought before him in a "prominent point of view." When that was known, an arrangement immediately took place and the result is known;—Mr. Rawle then read the letter from Mr. Hamilton to Mr. Dallas, (page 76-7-8-9).
It is well known that the Comptroller-General was the only officer of the commonwealth, who had communicated with the Secretary of the Treasury on this subject;—Mr. Rawle then read the following letter:—
"SIR,
"Philadelphia, July 29, 1793.
"IN order to enable me to communicate to the Legislature of this State, at their next session in August a complete statement of the public finances, I find it necessary to request, that you will decide upon the question, Whether the New-Loan certificates of Pennsylvania are within the assumption of the Act of Congress? If the certificates are within the assumption the State will be entitled to the evidence of the debt, for the amount of those, which after being assigned to her, were [Page 352] subscribed to the loan, but if they are not within the assumption they must of course be returned.
"An explanation upon this subject is likewise necessary, to enable the Attorney-General to institute a suit which was directed at the late session of the Legislature to be brought, for recovering the amount of the New-Loan certificates declared by the Comptroller-General of Pennsylvania to be assumable under the Act of Congress, and redeemable under the Act of Pennsylvania. I am, &c.
ALEX. HAMILTON, Esq Secretary Treasury.
Mr. Rawle then read the letter from Mr. Hamilton to the Governor, (page 218, 219).
The foregoing letters were commented upon in a suitable manner by Mr. Rawle, and he added;—
It is then clear that the New-Loans were never stated by the Comptroller or Register-General as an existing State debt after the Act of the 27th March 1789—Notwithstanding all this we find the Comptroller-General forgetting his official duty, and in 1792 certifying these New-Loans to be genuine and assumable; the large abstract is not certified by Mr. Nicholson to be genuine and assumable; but the Senate well recollects, that the end for which it was intended was visible, the 30th of June was the last day of subscription, the certificates of John Oldden were subscribed by the Comptroller-General as late as the 9th of July, altering the date to hit the purposes, when the laws would not warrant the redemption of any; his omission of certifying genuine and assumable in his own case is a proof of more increased dexterity, than any excuse can be a defence.
I trust the first article of impeachment is fully supported, the motives which render these transactions so culpable, and the inference of these motives shall be considered hereafter.
[Page 353]
THE SECOND ARTICLE.
In the preceding article of impeachment a charge of practices indirectly, and consequently pernicious to Pennsylvania have been comprised; in this we trace the same passion in direct opposition with her laws, and operating most immediately and unequivocally to her disadvantage.
Here again the prosecution commences with an averment of a fact for which we only pray the candid investigation of the law: It is averred that New-Loans were not specified and could not be contemplated as objects of redemption; that they were not specified requires only a perusal of the Act.
(The second section of the Act of 10th April 1792 was then read.)
That the New-Loan certificates could not be contemplated by any fair unprejudiced and unbiassed mind is not difficult to be established; that they are not mentioned in the second section is apparent; as they were not included in the second section, the sixth section ought not to be pressed into their service as an auxiliary.
The loans on the part of the United States were directed to be opened on the first of October 1790, and to continue open until the 30th September 1791.
Pennsylvania was then possessed of a large portion of United States' debt, which the Treasurer was directed to subscribe by the 30th March 1791: It was believed that Pennsylvania would be a creditor of the Union.
(Mr. Rawle glanced at the testimony of Mr. Donnaldson, which see last paragraph, page 292,) this has been stated by Mr. Gibson, (see page 334.)
It was doubted whether the balance due to this commonwealth would be punctually paid, as the subscription of every dollar of her own debt was an assumption of the payment of it by the United States, it was considered as ha [...] [...]nterest that the State creditors should subscribe. [...] was contemplated that she would otherwise remain encumbered with her own claims, at the same time that she might be an hopeless creditor of the [Page 354] Union; but as the manner of funding the State debt would not have yielded to the State creditor a benefit commensurate with that ensuing to the State, as she was relieved from the payment of 6 per cents. by a measure which yielded to them only 4 per cent.; an Act was passed the 9th of April 1791 inviting her own creditors to accede to the United States' loan by engaging to compensate them for their loss. This Act had its effect, subscriptions took place to the amount of £. 252,697: And purpart certificates were issued to the amount of £. 136,543.
In December 1791 the Legislature beheld with satisfaction the wealth and prosperity of the State, differing from the author of the plan of finance, she passed the Act of the 10th of April 1792—the State being then only encumbered with the interest on funded and unfunded depreciation debt, funded debt, dollar money and purparts.
Far from thinking a public debt, attended with sufficient advantages, either necessary to procure her importance in the Union, or to attach her own citizens to her interests.
To counterbalance these inconveniences, they determined to make use of the means to relieve her incumbrances at once, they resolved to sell so much of her 3 per cent. stock at 12 shillings in the pound, or £.60 per cent. as would discharge all her debts: It was proposed by the Legislature fairly to purchase the subscriptions of those of her own State creditors mentioned in the second article who would subscribe; the law itself justifies this construction, and manifestly negatives the construction attempted to be given to the sixth section. In the law, as it now stands without any alteration, the sixth section is a proviso to the second section, this we have in the testimony of Mr. Gallatin (see page 295-6-7-8.) The fifth section directs the payment by the State-Treasurer on or before the first of July same year; the 6th section goes on to state that they shall be entitled to the nominal value from the Treasurer [Page 355] upon condition that they shall subscribe to the loan, and transfer to the use of the State-Treasurer.
Now, no other law exists authorising the State-Treasurer to pay the nominal value, and no other mode of effectuating the payment but by warrants drawn by the Governor, payable out of this fund: The Governor derives his authority from the fifth section in reference to the second; but no additional clause, no authority is given to draw in execution of the sixth.
It follows therefore that the intention was, that, if the loan re-opened, the second section was only to be executed as the parties should comply with the sixth section.
The seventh section more clearly exhibits the views of the Legislature; it requires the holders of every certificate intended to be redeemed to apply before the first of July, and after that time all interest shall cease, but if no sale, nor notification, interest shall continue: Now it is notorious that New-Loans did not bear an interest of 6 per cent.; it is therefore consequently obvious they were not included in this provision: Yet this is expressly extended to all the certificates intended to be redeemed; it follows New-Loans were not intended to be redeemed. If a member of the Legislature was to be asked by one of his constituents, "What did you mean by this Act?" the answer is obvious, "Read the seventh section."
They contend that the sixth is a separate and absolute provision; if so, nothing is more true, than what proves too much, proves nothing at all.
Read it in this point of view. (The sixth section then read.) What is its effect? An engagement that they will pay to every holder of State certificates from New-Hampshire to Georgia the nominal value of his certificates!
No peculiar mention of the State creditors of Pennsylvania!
A construction liable and subject to such observations ought to be rejected, and must be laid aside.
[Page 356]The sixth section don't controul to the exclusion of, but is a condition annexed to the second section.
Here it is difficult to reconcile the conduct and knowledge of the Comptroller-General with Mr. Gallatin's communication, (see his testimony, page 295, &c.) as Comptroller-General it forms no matter of exculpation that he was able to catch the State in an error, altho' a third person might take advantage, Mr. Nicholson, as Comptroller-General ought not to catch her in this error in which she did not intend to fall.
THE THIRD ARTICLE.
This article consists of four parts or members.
1. Mr. Nicholson did not consult the Register-General.
2. Nor commune with the Governor.
3. Nor discriminate in his certification what certificates were subscribable.
4. Nor did the Comptroller-General certify in his certification, what certificates were redeemable.
Three of these charges are proved, and if one is proved, that is sufficient to convict the defendant. (Mr. Rawle read the letter from the Secretary of the commonwealth to the Comptroller and Register-General, page 232.)
In consequence of this letter the two officers joined in a report to the Governor, which included the estimate approved by the Governor; which estimate is now lost; this estimate (now supposed as aforesaid to be lost) embraced all the debts of the commonwealth which were to be redeemed, not a partial estimate of them but every species which were to be redeemed. (Mr. Rawle then read the following letters.)
"CONFORMABLY to your desire expressed in the Secretary's letter of the thirteenth instant we have considered the Act therein referred to, and as there appears to be no discretionary power to suspend the operation of the Act and the redemption of the debt by the first [Page 357] of July next except for the want of purchasers of 3 per cent. stock at twelve shillings per pound at least, and as the notification to the creditors to receive payment must take place by the first of May next in case of such operation, it seems necessary between this and that time to try the market in order to form a determination from the offers that may be made: under this impression, we would beg leave to propose that we should forthwith invite proposals to such amount as purchasers may chuse to offer on or before the 25th inst. payable and deliverable by the 30th April instant.
"The result of these offers and the extent of them will enable your excellency to judge whether a sufficient sum and price may be relied on by the first of July next to warrant a call on the creditors to apply for payment.
JOHN NICHOLSON, JOHN DONNALDSON."
His excellency THOMAS MIFFLIN, Esq Governor of Pennsylvania.
"Philadelphia, 27th April, 1792.
"GENTLEMEN,
"IT is evident that the Legislature intended to make a general settlement with the creditors of the State upon the principles expressed in the Act of the 10th instant, and consequently a partial sale of stock, or a partial commutation of State debt for stock, will not justify my issuing a notification, which, by the terms of the law, must be addressed indiscriminately to all the holders of the specified certificates and bills of credit, requiring them to comply with the conditions of the redemption. But if the offers to purchase stock and to commute the debt at the rate prescribed, shall, together, be commensurate to the aggregate amount of the certificates and bills of credit, which are to be redeemed, I conceive that, without violating the spirit of the Act of Assembly, the object of the arrangement [Page 358] may be attained as well in this way as by an entire sale of stock.
"You will be pleased, therefore, to extend the period for receiving proposals, and to accept all that may be made in either of these forms, until the requisite sum is obtained. But in the case of a commutation, there must be an actual deposit of the State debt; in the case of a purchase the cash must be paid, or secured to be paid beyond the possibility of disappointment; and in both cases, the period of executing the contract must be referred to the time which the notification shall limit. I am, &c.
To the Comptroller-General and Register-General of Pennsylvania.
(Mr. Rawle then read the letter signed John Nicholson, which ought to have been signed by Mr. Donnaldson also, page 224, he then added:)
Accordingly the Comptroller and Register-General joined in a report already read, dated 30th April 1792, (see page 225-6.) This letter encloses the names of the purchasers for the stock amounting to the sum of 986,000 dollars. The former estimate is said to be lost; this document was general, not confined to the second section as they contend. Mr. Dallas's testimony will vouch for this, (see it page 231, &c.) who declared no verbal communication had passed between him and the Comptroller or Register-General.
But it is said that no verbal communication was necessary, except when differences of opinion between the Comptroller and Register-General had occurred, and when they differed in opinion; How? When only one officer knew the transaction.
The Comptroller-General and Register-General could never disagree because the Comptroller-General had not communicated with the Register-General.
The testimony of Mr. Dallas and Mr. Donnaldson confirm that no New-Loans were included in the estimate [Page 359] formerly rendered, and now supposed to be lost, nor no unfunded depreciation, the second estimate is a proof of this, which is declared by the Register-General and Secretary of the Commonwealth to be substantially the same with that which was lost.
(Mr. Rawle then read the following letter.)
"Secretary's office, Philadelphia, 3 May, 1792.
"GENTLEMEN,
"IN consequence of the doubt, which you have suggested, I am directed by the Governor to inform you, that when he assented to the idea of the State debts being received on the sales of stock, it was upon this principle, that it should be considered and estimated as cash, at its nominal value; beyond which nominal value, and the rates in particular cases prescribed by the Act of Assembly, he is not authorised, upon the redemption, nor, consequently, through the medium of a commutation to liquidate the demands upon the public.
"A fund commensurate to the whole amount of the debt to be redeemed, must be established, before the Governor can issue his notification; and it is certainly immaterial, whether that fund is satisfied by specie payments, or by deposits as cash, in the public securities, for which the specie is to be raised: but the Governor conceives, that it would be contrary to the spirit of the law, to an impartial distribution of justice, and to the public interest, were the proposals to be accepted, so that the payments by way of commutation should be considered as cash, in order to entitle the parties to a transfer of the three per cent. stock, and also as a deposit in order, to entitle them to interest until the expiration of the time, which the notice shall limit for the general redemption.
"By an arrangement of this nature, a discrimination is not only introduced between the purchasers of the stock for cash, and those who purchase with State debt, to the great benefit of the Latter class; but it will likewise [Page 360] operate with similar inequality in relation to all those State creditors, who cannot have the opportunity of settling their claims by way of commutation; the State, too, will not only lose the current interest on the 3 per cent. stock; but be precluded from the advantage of an immediate settlement with such of her creditors as shall be disposed to anticipate the period, for which the notification must issue.
Such have uniformly been the Governor's sentiments; but, if by any means they have been misunderstood, he would rather relinquish all advantage from the present proposals than suffer any cause of complaint to exist: He requests, therefore, that you will be pleased to confer with the parties, on the subject; and to inform them, that they may now make their election, either to abide by their proposals upon the terms which I have stated, or to withdraw them. I am, &c.
To the Comptroller-General and Register-General of Pennsylvania.
This last letter shews no particular sale in contemplation, the sale of stock was to be commensurate to the whole amount of debt to be redeemed.
(Mr. Rawle then quoted the Act of Assembly of the 4th April 1792, page 218, which directs the manner of settling the public accounts;) by this it is manifest that it was the duty of the Comptroller-General to have informed the Register-General, it was their joint duty to draw, and certify the fund, that the Governor might draw his warrant on the State-Treasurer with propriety. Nay, they were to certify jointly: No excuse can be brought in justification of his conduct for keeping the Governor ignorant of the transaction. This is a new species of defence set up by the counsel for the Comptroller-General. I am willing to relinquish such parts of the members of the present article, as respect any matter about castings and calculations, and dates of interest on the face of the abstracts: but the [Page 361] fourth member, that the Comptroller-General did not certify in his certification to the Governor what certificates were redeemable, is a serious charge. Some debts were to be redeemed by the Act of the 10th of April 1792— What State debts? Why! only those debts which were included in the estimate which had been furnished by the two officers, the Comptroller and Register-General. —Here it may be necessary to advert to his own name being used;—I answer, when the measure is concealed, no matter about the man.
THE FOURTH ARTICLE.
This article charges the Comptroller-General with a breach of the Constitution, here no shelter can be found in the ambiguity or contradiction of the law, it is a direct violation of a single clause in a plain and explicit instrument; accordingly the endeavour is not to oppose but to escape the charge.
Astonishing to hear, that a warrant expressly to be paid out of a fund created by the Act of the 10th April 1792, and actually so paid by the Treasurer, and so reported to the Legislature by the Governor—is to be protected from reprehension by quartering it on another fund previously appropriated by law to other objects, and altho' his warrants are expressly drawn and paid out of the fund provided by the Act of 10th April 1792, they were drawn out of the fund established by the Act of the 7th April 1791—and not out of the fund provided by the Act of 10th April 1792.
By the Act of the 26th March 1789, £.10,000 were set apart for claims and improvements; that this has always been considered a peculiar fund, and appropriated to those cases which did not belong to any particular class, and as such I shall shew the sentiments of the Comptroller-General upon it, in an official statement under his own hand.
(Mr. Rawle read a part of the Comptroller's report, page 386, Minutes December 11, 1790, as follows, to wit:)
[Page 362]"There is another species of expence called claims, which cannot properly be arranged under the debts of the State, and which is certain in its amount, as it depends on the grants of the Legislature at the time, and not on accounts adjusted upon fixed principles. The sum of £. 5,000 annually is appropriated by Act of March 26th and 28th September 1789, and is constituted as a fund for this purpose. It may be worthy the consideration of the Legislature, whether such a fund is not likely to beget many improper applications, and whether, after the State hath, by an Act of limitation, barred even unsettled claims which would have been legal, such an invitation should continue to be held out."
These claims (the defendant observed) were likely to beget "improper applications," nothing in this provision relative to the Act of April 1791: No New-Loans could be redeemed under that law, nor any claim on that fund.
But an unexpected effort is made to defend, which requires further consideration, the charge is, that he caused money to be drawn from the Treasury without a previous appropriation by law.
Not a single instance can be produced which will shew, that where a warrant has been drawn on a fund, to which it was not applicable, the same should be paid out of the twelfth appropriation of the 7th April 1791. (Some warrants were then produced, and read by Mr. Rawle, to establish his position, contained in the last sentence.)
Question by Mr. Bingham to Mr. Rawle. Do you say, that the fund included in the Act of the 26th March 1789 is embraced in the Act of April 1791?
Ans. Yes—as far as the 12th appropriation extends.
Ques. by the same. Is the Act of March 1789 a part of the Act of April 1791?
Ans. No. By the Act of the 7th April 1791 all the revenues of the State were collected into one mass, and formed an aggregate fund towards paying the debts [Page 363] and obligations of the commonwealth, and finally to pay all warrants drawn for claims and improvements.
It was with great propriety the warrant in favour of Mr. Rittenhouse of the 27th September 1791 was paid out of the fund for claims and improvements.
That warrants were drawn without a specification of the funds, in the case of Dr. Hutchinson and others after verdicts in the Supreme Court: Was this agreeable to law? In the second section of the Act of the 4th April 1792 the duty of the Comptroller and Register are defined, where it is enacted that the balance and fund should be certified by them to the Governor, and a warrant should issue accordingly.
Can his conduct on this occasion be justified? Can this transaction be pressed, as a defence, into the service of the Comptroller-General?
(Mr. Lewis interrupted Mr. Rawle at this time, and desired him to produce the warrants. Whereupon the warrant No. 14 for unfunded depreciation debt, was read, and shewn that it was not certified to be payable out of the fund of the 10th April 1792, but that it was payable per Act of the 10th April 1792, and the following letter.)
"WE have the honor to inclose a statement of the certificates granted for unfunded depreciation debt, agreeably to Act of 4th April 1792, which have been issued since the first January 1793, and are, with, &c.
JOHN NICHOLSON, JOHN DONNALDSON."
Hon. GERARDUS WYNKOOP, Esq Speaker of the House of Representatives of Pennsylvania.
☞ The statement consisted of six certificates amounting in the whole to ten thousand five hundred and seventy-eight dollars and ten cents.
By these it was evident unfunded depreciation was not included in the estimate.
[Page 364]The Governor did not know that unfunded depreciation were included, nor could it appear to him that there were any others but those directed to be redeemed by the first estimate and expressly connected with it.
Had the conduct of the Comptroller-General on these occasions been otherwise, no impeachment would ever have lain against him.
I will reduce the remaining three articles into two as concise as possible, the fifth and sixth I will consider together as the same evidence applies to both.
(Mr. Rawle read the fifth and sixth articles of impeachment.)
The fifth states in general terms the final objects of the labours to which the preceding articles refer.
That the plan of finance (which see page 280) was not laid for others, when only £.20,000 was estimated to be out, that he purchased to so great an amount, it must be acknowledged that he was industrious. (Mr. Rawle explained the business respecting the certificate of Dr. Hutchinson and others, as not connected with this business.) With regard to the sixth article of impeachment that he subscribed for his own use the certificates received to be exchanged.
It is surprizing that such a quantum of evidence hath been procured. His counsel do not deny the charge, but the inference, and contend to justify the transaction.
That the Comptroller-General led the way is apparent; 1. Mr. Oldden a principal broker is at a loss to divine what use the defendant intended them for. 2. Mr. Boggs certifies New-Loans rose in price, and unable to know what for. But Messrs. Evans, Hale and Stroud have been produced to prove that the New-Loan certificates have been taken back, after they were lodged for re-exchange. The charge is, that the Comptroller-General made proposals to purchase, and did actually purchase from persons bringing certificates to his office to be re-exchanged. Is this an answer to the charge? The question is not whether on an alteration of their [Page 365] minds, they took back their certificates after having lodged them with him.
But the charge is, that a steward of the public revenue is accused of having prevented an exchange which the party was desirous to make, and which it was his duty to accelerate, by which the State suffered a considerable loss: And the defence is that in other instances wholly indifferent to the public, he, and not another officer assented to the parties receiving back, at their own request their own certificates for private purposes.
The last article is certainly of too serious and too plain a nature to be viewed with indifference. We have Mr. M'Connell's testimony that he sold that certificate to Mr. M'Clenachan; Mr. M'Clenachan's testimony proves that he never sold any certificates nor had any private dealings with the Comptroller-General in his life, except the advance of some indents. That he delivered all the certificates which he had to Mr. Nicholson; that he is of imperfect memory that this certificate was of the number; that on the 15th September 1790 he drew interest on this certificate. As Mr. M'Clenachan never commuted with him, nor had any other dealings with the Comptroller, he is put to prove how he came by this suspicious certificate.
The Comptroller-General brings his books of exchanges, dates, numbers and sums are not apparent on the face of them.
Twenty-six of these certificates united without dates, &c. make up £.26,000 which is No. 183; forty-five certificates make up £.27,000, No. 184.
Lord Mansfield observes, all evidence (Couper, 65,) is to be weighed according to what one party can produce, and is in the power of the other to contradict.
We are not to make testimony but to find it; if any imputation is thrown on Blair M'Clenachan, we did not select him, but his testimony should however have this effect, that it deserves a better answer than hath been yet given to it by the Comptroller-General.
[Page 366]This impeachment hath not been precipitated, it is now almost twelve months since it commenced; the Comptroller-General has had full leisure for the collection of official documents necessary for him: Having already taken notice of a great part of his defence, it only remains to notice two circumstances adduced by his counsel.
1. His innocence is to be inferred from his open and avowed sentiments at former periods relative to the nature of New-Loans; (Mr. Rawle then adverted to the Comptroller's letter, December 24, 1791, page 220-1-2, his letter to Mr. Hamilton, page 278, and his letter to Mr. Mifflin, page 223-4.)
The unvaried tenor of opinion is certainly evidence of its sincerity—but when we find the same man, at or near the same period of time, and under the same circumstances delivering opinions diametrically opposite, we are led to enquire which of the two occasions required the most serious reflection.
But in the official document, 30th November, 1791, all the claims against the commonwealth are mentioned and stated; New-Loans are omitted, yet they are not altogether too inferior objects of notice, as £. 600 arrearages of interest on them are mentioned.
It will not be pretended that he intended to mislead the Legislature or the Governor; and it will not be pretended that the nature of the statement precluded the mention of the principal of the New-Loans: For, 1. It is an account of "claims," and he professes to have always considered this as a claim. 2. The principal of other claims was noticed by him, such as funded and unfunded depreciation debt, pensions, &c.
Yet while on this strong ground, this important period of the 10th April 1792, it does not in all his correspondence appear that practical views, his avowed opinion, his mortising and inlaying of New-Loans into the composition of the fund for redeeming State debts, so as to make all appear of one piece was ever communicated to any one; no intimation that the redemption [Page 367] of New-Loans was practicable altho' that was the time to have avowed the sentiment.
This was however (as Mr. Tilghman says) authorised by the secret and avowed objects of speculation.
2. That some of the Acts in question, being lawful to others were lawful to the Comptroller-General.
This is important and attacks the basis of some of the articles of impeachment. I consider it as applicable to his purchases of Oldden, and Biddle; his avowedly pursuing what he professed to suppose the literal construction of the law of April 10, 1792, in opposition to what he knew to be the meaning of the Legislature.
The interest of the commonwealth, the happiness and success of a republic depend on the destruction of this unworthy principle.
It is an axiom, necessary for our prosperity, and almost inseparable from our existence, that a public officer should have no interest opposed to that of the public: Perverting public offices to private emolument was one of the principal causes of the downfall of one of the greatest commonwealths in the world.
In this grand national view, I will not descend to the jealous superintendance of courts of chancery over executors, guardians and trustees.
You, who are here collected, and delegated to decide this national enquiry, will never forget, that solemn obligation are derived from important trusts; and that whoever stipulates faithfully to serve the public, stipulates to renounce every personal advantage incompatible with the public interest.
It is therefore, for a breach of this engagement he is accused—an offence which in all times has been denounced as requiring adequate punishment. 2. Wooddeson, 602.
I fear no contradiction in saying, that had John Nicholson in 1782, when about to take the oath "faithfully to serve the commonwealth," and to execute the office of Comptroller-General, declared his construction of it to be, that he was at liberty to pursue his opinion [Page 368] of the letter of the law in opposition to what he knew to be the intention of the Legislature.—That he would claim the privilege of private men to prefer his own interest to that of the public, and that he would avail himself of his official opportunities for so doing—he would be rejected with disgust and without hesitation. If this conduct would be wrong in 1782, it cannot be right in 1792. With these observations I submit the case to the consideration of the Senate.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Montgomery was placed therein.
"The committee then proceeded to the Senate-chamber for the purpose aforesaid.
"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended at the trial of the articles of impeachment against John Nicholson, Comptroller-General.
"The committee appointed to manage the trial on the articles of impeachment of the House of Representatives against John Nicholson, Comptroller-General, reported further progress."
[Page 369]
Eleventh day of the trial. TUESDAY, MARCH 11.
THE Court being called, &c. as usual.
MR. HIGGINSON.
Mr. Speaker, and Gentlemen of the Senate,
THE Senate of the commonwealth of Pennsylvania is called upon by the Constitution to execute one of their most important functions, that is, A TRIAL BY IMPEACHMENT.
The House of Representatives being the most popular branch have exercised their jurisdiction in preferring the charges against John Nicholson, the Comptroller-General: This important right devolves upon you, whose part is the more difficult as you have to decide and are set as judges over this individual, your tribunal is the greatest in the land; being thus constituted, you have to reason with capacity; the chain is composed of mixed business, habits of intimacy, and principles of confidence between the two branches, and sympathy for each other, a mere suggestion of the danger is sufficient to destroy the existence of the danger.
Having premised this hint to you, his judges, permit me to say that the defendant has every thing that is valuable at stake, his reputation is at issue by this accusation; if rumour spread through every corner of the state, if the public opinion, envenomed by prejudice, if reports of guilt and torrents of prejudice, roused and fomented by malice, and fostered by envy, are sufficient to condemn a man, the defendant is already brought to judgment.
Yet the impartiality of the tribunal will secure the [Page 370] officer from condemnation on any other ground than that of a fair trial according to the evidence.
We have heard great panegyricks bestowed on impeachment trials in England, but history affords but few examples of such trials being any other than prosecutions, oppressive and violent, and ending in corrupt decisions.
The present trial, I hope, will be different in management and decision.
The articles of impeachment are divisible into two classes.
The 1st is subdivisible into four classes.
The 2d is of a different nature and scope, and consequently worthy of different consideration.
Upon this, two points arise.
1st▪ Whether our construction hath been right or wrong.
2dly. If not conformable to law, whether it had not been our honest faith and good opinion.
The first, If New-Loan certificates were subscribable to the loan opened under the Act of the general government.
2d. If redeemable.
The first of these depends on the Acts of Congress. (Mr. Higginson then read the Act of Congress of the 4th August 1790, section 13th and the proviso.)
By this section and proviso two things are requisite.
1st. That they should be issued before the first of January 1790.
2dly. That they should be issued for SERVICES or SUPPLIES.
With regard to the first of these qualities, it is evident they were issued by Pennsylvania before the 1st January 1790. And it is equally evident as to the second. The gentleman who preceded me did not go on to say, that the New-Loan holders had no other debtor to look to but the state of Pennsylvania. They were issued for Continental certificates, strange! He did not recognize this particular! Strange that a transfer of the debt should alter the consideration! The transfer was made [Page 371] for a valuable consideration.—The law which they say abrogated them was passed before the 4th day of August 1790. The North-Carolina certificates excepted, being issued in 1786 corruptly, for no valuable consideration, is a strong argument in our favour; Congress prohibited the assumption of these North-Carolina certificates, and enacted that they should not receive the benefit of this Act, because they were issued without any valuable consideration; this exception makes the rule more strong; and the New-Loans are much more included in that general provision, being issued by government, and having the recognition of public authority, being exchanged for Continental certificates which issued for a bona fide consideration.
Two objections may be raised against this argument. 1. That the certificates of North-Carolina were in their original form issued without that exception, and that New-Loan certificates exchanged for Continental ones were not recognized by the general government, nor by their officers, and that they could not be specifically included in the 13th section: But are they not expressly mentioned in the 18th section?
2d. By concluding from the generality of the rule, that New-Loans could not be included: But as Mr. Gallatin, a man of much ingenuity, in the case of his contested election, quoting the words of the 4th article of the confederation, "paupers, vagabonds and fugitives from justice, excepted," argued that these were included, if the article had been penned without these words. The arguments are stronger here than if they had all stood without the exception. But Congress to place it out of all doubt and controversy, enacted a clause to except the certificates of North-Carolina from being received on the loan. There are no reasons which could apply, but would have applied to the necessity of the New-Loans being expressly excepted from the loan of the Union, if they had so designed.
At all events the exception whether sound or unfounded will be perfectly immaterial, when we consider [Page 372] our law of the 27th March 1789, which passed after the adoption of the Federal Constitution, if it meant to exclude them from provision, why not make a literal exception to them?
Before I come to consider the Act which erects New-Loans into state debts, permit me to observe, that the Act which authorises the payment of a demand is in fact an appropriation by law previous to the grant of the warrant, and is constitutionally payable out of monies not otherwise specifically and previously appropriated.
One reason is, it would always promote the good faith and interest of the state, and it would never commit it.
The money was to have been drawn from the Treasury by the warrant of the Governor; if the certificate was in the usual form, if it was such as the officers would and ought to have made, believing it to be just and right, the officer is not to answer, if there was any thing untrue in the certificate, it must be shewn; if any marks of delusion, it must be pointed out. The Treasurer paid the draft, if there had not been an appropriated fund the Governor ought not draw—the Treasurer ought not to pay.
The sum was certified by the Comptroller-General, the same passed through the office of the Register-General before it was handed to the Governor.
If the certificates are not redeemable by the Act of the 10th April 1792, the charge is right, if they are redeemable the charge is not true; if not literally true, the charge must fall to the ground: Nay, something more is necessary to make it criminal, than to say true, or untrue.
One criminal point is an omission, but it must be shewn; that it was the officer's duty to discriminate, and it is their business to shew that it was his positive duty to make it known to the other officers.
But if the officer did what he thought right, he is indisputably innocent.
[Page 373]Much has been said about the liberality and justice of the Legislature, respecting the Act of 1786, yet the measure grew out of self-preservation, and the interest of government.
The State at this time had to choose the least of two evils. Pennsylvania was punctual in paying her quota, other States were deficient; Congress was obliged then to issue indents for interest which depreciated, persons from other States might buy up these indents to the loss of Pennsylvania and the advantage of the delinquent States, and yet the payment thro' the State Loan-office was disagreeable to Congress. The State of Pennsylvania was therefore under the necessity of passing the law of 1786 in order to shun the worst of two evils. Her quota was assessed; and she paid it. The motives were in order to confine her own payment to her own citizens, and the money to circulate in her own territory.
Thus it was agreed on all hands in the Legislature at that time, that Pennsylvania should assume the debt to her own citizens, the only difference consisted in the mode: This is fully proven by referring to the plan of finance then brought forward in opposition to that which was adopted, both equally support our argument.
(Mr. Higginson read the following parts of the plans of Finance, see Minutes of Assembly, 22d December, 1785, pages 117, 124, and 126.)
"XIII. Thus the foregoing balances due to the United States may readily be discharged. But there is something more that claims the attention of Pennsylvania.
"According to the estimation of Congress, the sum of 4,834,279 16/90 dollars, will be necessary to discharge the interest on the domestic debt of the United States till the end of the year 1784; and by the resolutions of Congress of the 27th of September, 1785, facilities or interest certificates are directed to be issued for the interest due until the 1st of January, 1785, consequently facilities will be issued nearly to the amount aforesaid.
"Although this state hath discharged the interest of [Page 374] the debts of the United States, nearly to the amount of the quota of Pennsylvania, in the sum requisite to discharge the interest of the whole domestic debt to the said period; and, although this state hath by the Land-Office redeemed above £. 220,000 of the principal of the domestic debt due by the United States to the citizens of Pennsylvania, and yet continues to redeem the same by the means aforesaid; nevertheless there remains a large portion of the whole of said debt yet due to the citizens of Pennsylvania, and there are large arrears of interest yet unpaid upon the principal sums so due to them—This demonstrates the delinquency of some of the other states; a delinquency which ought not to be permitted, for (unless measures be taken to prevent it) they would even profit by such delinquency, and the creditors of Pennsylvania suffer on account of their faithful and strenuous exertions. The great quantity of facilities which would be paid to the citizens of Pennsylvania would cause them to depreciate, notwithstanding the provision made by Congress to prevent it; so that the creditors in Pennsylvania would not have the value intended them, and to which they are justly entitled—And this depreciation would enable citizens of other states to procure them in this state at a discount, and so to pay off their proportion of the Continental requisitions with certificates obtained at less than specie value. For remedy whereof it is proposed,
"That the possessors of all certificates of debts due by the United States to citizens of this state, the interest of which were made payable at the continental loan-office by the Act of March 16th, 1785, shall have it at their option to receive from the Comptroller-General of the state, a certificate for a like sum in lieu thereof, bearing interest from the same date; and that the faith of the state be pledged for the redemption of all such certificates so issued.
"And that such Loan-Office certificates, entitled as aforesaid, as have been granted for continental money, shall be settled and liquidated in specie by the said [Page 375] Comptroller-General, agreeably to the scale provided for that purpose by Act of Congress of the 28th of June, 1780.
"And whereas, according to the said Act of Congress, the possessors of certificates for money loaned before the 1st day of March, 1778, are entitled to an interest of 6 per cent. per annum in specie upon the nominal sum expressed in the certificates, until the final redemption of the principal; that the said Comptroller-General shall also certify said nominal sum on the back of every certificate issued by him for Loan-office certificates of the aforesaid description; to the end that the said possessors may receive the same justice from this state as hath been promised them by the United States."
The other plan contains as follows.
"III. As the demands under the 11th and 12th articles have not been duly liquidated, the precise amount cannot be ascertained: But it is conceived that the excess abovementioned, together with the sales of lands, formerly pledged for the redemption of depreciation certificates, and the arrearages of militia fines, supposed to be about £.31,500 would be more than sufficient to pay them; and that probably these sources would afford the means of satisfying claimants as fast as their claims could be adjusted. The balance should be carried to the aggregate fund.
"IV. In order to provide for the sum contained in the 13th and 14th articles, it is proposed that a subscription be opened at the Bank for a loan of £.2,000,000 to the State, the subscription to be kept open till the first day of April next. The subscribers to pay one-fourth of the subscription down, one-fourth on the first Monday in April, one-fourth on the first Monday in July, and the remainder on the first Monday in October. The payments to be in Loan-office certificates, or other certificates of debts due by the United States to citizens of Pennsylvania, on which the interest is by law now payable in Pennsylvania, or in such depreciation [Page 376] certificates as are now entitled to receive interest from the excise, or in specie. The interest to be payable from the first day of April, at the Bank, half-yearly. The first half year's interest to be paid on the first Monday in October, the second on the first Monday in April, 1787, and so on, until the final payment of the principal. The late proprietors to be entitled to the abovementioned sum of £.225,000 of the loan, or to adhere to their rights under the Act of November 1779, at their option.
"The provision proposed for payment of the interest, and eventual payment of the principal, is as follows:
"I. A tax on imports.
"Under this head it is to be observed, that as the present plan is calculated to forward and not obstruct the views of the United States, the duties proposed will be the lowest stated in their recommendation. And when their system shall be generally adopted, the duties now proposed may be relinquished, and an equivalent sum be paid to the Bank from the duties raised for payment of interest on the debt of the United States; and of which a considerable part will be payable to the State, in consequence of their receiving continental certificates for a loan made by the State."
"Note, It is not improbable that the funds will be insufficient for the purposes to which they are appropriated. The disturbances at Wyoming may perhaps call for a considerable sum, which is not comprehended in the estimate.
"VI. The amount due on the requisitions of Congress is (according to the 16th article) £.91,915:17:6 which is payable by their Act on the 1st day of May next. From this sum must be taken, 1st. The interest which will at that time be due to Pennsylvania from the United States on Continental certificates received at the Land-office and in taxes. 2d. The monies paid and payable before the first of May to pensioners disabled in the service. These two articles will probably [Page 377] amount to about £.52,000 and will of course reduce the balance to about £.40,000.
"But as it is proposed to receive on the abovementioned loan to the State, Continental certificates to the amount both of the principal and the interest which may be due on them, the interest will form a considerable part of the sum. The total is estimated at £.1,775,000 and therefore that part which consists of interest must greatly exceed the above balance of £.40,000.
"Note, The possessors of Loan-office certificates bearing date before the 1st day of March, 1778, are entitled (by resolutions of Congress) to receive 6 per cent. on the sum specified in their certificates, altho' their real value (by the Continental scale of depreciation) is considerably less than the nominal sum. Hence it follows that the calculation (in the 13th article) of a principal sum due, which is made according to the amount of interest actually paid by the Loan-officer, is erroneous. But since the interest due on Continental certificates will (as just mentioned) be an addition to the principal, it is probable that the excess of one will balance the deficiency of the other.
"By receiving in the proposed loan (at their real value) those certificates which bear an interest of 6 per cent. on more than their real value the State will gain the difference between the interest on such real value, and the interest now payable by the United States, and the present holders of the certificates will have no reason to complain, because they may (at their option) either lend them to the State on the terms held out, or have recourse to the United States on the terms of their resolutions.
"On the future requisitions of Congress, whenever they can be proportioned (either by the rule laid down in the articles of confederation, or by the rule lately recommended to the States) it will be expedient to raise an account of quotas with the United States, passing to their credit the total sum payable by Pennsylvania, and to their debit the total sum which Pennsylvania has [Page 378] paid. The balance of this account (being the excess or deficiency of payments) will be carried forward, so as eventually to be liquidated in the annual demands of Congress, and annual payments of the State. Since therefore a considerable sum will (in the event) be payable to the United States every year (however the balance may now stand) it will be expedient to continue the present annual tax on property, and carry the proceeds to the aggregate fund, which will receive.—"
It is true this last provision was not carried into effect, owing altogether to circumstances and motives of state policy.
It may then be said, that it is contended the law of March 1786 was temporary. True, this idea is in the preamble of the Act of 1789, but it is not presumed that it can be construed by the ex post facto explanation of the same Act, neither intended nor mentioned, nor does the Act contain a single idea of a temporary provision.
Read this Act according to the minutes already read, it will be easily seen that the New-Loans are an existing state debt. Read it you will see a better rule of construction than by speeches, resolutions or reports of committees. (The 1st and 2d sections were then read.) Now, Sir, let the first and second sections of this law be taken in any point of view, I contend the New-Loans are not destroyed as a debt, but at most only a suspension of payment, and a provision for completing the payment of interest for four years.
Or, a modification as to payment: To those who did not chuse to embrace the invitation, there is an offer, in the second section. It was only as a suspension, and to those who did not chuse to embrace it, it was only a modification of payment.
Then follows the provision of the option held out to New-Loan holders; thus the Act operates either as a suspension, or a modification; in this, two points are to be considered, enough of the Act of March 1786 is left to constitute a debt.
[Page 379]2. Repealing a law is not repealing what was done under it.
Of the Act of March 1786 enough is unrepealed to make the certificates neither null nor void.
For 1. In the 8th section the interest is directed to be paid: 2. In the 11th section they are made receivable in the Land-Office.
Both are only mere forms of words, for the Legislature could not make them null and void if they intended so to do; to do that, and to exclude them from the loan they must be rejected by the Legislature of the Union as the certificates of North-Carolina heretofore adverted to.
The question may be reduced to this simple position, that as the gentleman yesterday said respecting the existence of a legislative power in Pennsylvania, a position indisputable; so likewise in this instance, the fundamental principles of Nature, may as well be set bounds to as to the principles of natural justice; in either case to become a legislative act, it might have the form of a law, but not the force of one: There are moral impossibilities as well as natural ones, and these exist with Legislatures.
A Legislature therefore can no more effectually annihilate any rights, or enact away its own obligations, than it can enact that a body shall decrease in gravitation in proportion as it descends to the earth.
Thus much I have said to enforce that rule of construction that if a law can receive any possible construction, that will avoid so serious an imputation as the violation of public faith, and will comport with justice, such construction we are bound to put upon it. What a government cannot of right do, we surely should not presume it meant to do; unless the Act was planned for such, unequivocal in its meaning, and unsusceptible of any other construction.
In the third section the words many and so much are relative terms, and imply that some would not be willing to exchange or to take back the Continental certificates.
[Page 380]I observe that the framers of that Act, in order entirely to deprive the holders of the benefit of an obligation solemnly issued by the state, would have used other words, would have gone further than barely to give the holders a permission to exchange if they saw fit; in contemplating the case of holders who might not chuse to exchange, they would have gone on, and declared explicitly the consequences of not exchanging.
But, Sir, do the operative words of the repealing clause destroy the debt of which the New-Loans are the evidence. In order to destroy them, the certificates themselves should be declared null and void; because the payment of the interest or principal expressed on the face of them ceases to be secured by any law: does the debt of which they are the evidence cease to exist? Can the existence of a debt depend on the existence of a provision for the payment of it's interest or principal? May there not be a debt without any existing appropriation for the payment of the principal or interest? Surely there may.
How then can it be said that by repealing all laws specifically securing the payment of the principal or interest, the debt itself is annihilated?
No, Sir, both the Preamble and the Act clearly show, it was only meant the exchange should be optional, and those who did not chuse to exchange should retain their certificates valid on their original grounds, though without any particular appropriation for the payment of the principal or interest: This is the case under the Continental loan, and those who did not choose to accept the terms of that loan and subscribe to it, still hold and were meant to hold their evidences of debt as valid as at the first moment of their existence.
The preamble to this Act states that the funds which were intended for the payment of this debt were likely under the new government to be transferred to the Treasury of the Union.
It was for this reason that the laws which specifically secured the payment of interest or principal the New-Loans [Page 381] was repealed, leaving the debt itself, of which they were the evidences, sound and entire. Says the state, I do not mean to destroy my obligation, I cannot do it, but my funds are gone, and I must suspend the payment, take your chance of my future competency, eventual solvency, and ultimate payment, or I will give you another choice, you may if you had rather re-exchange my obligation for those of the continent, then take back your Continental certificate, and give back my New-Loan.
Therefore, Sir, instead of charging the Comptroller-General with having transgressed the law in violation of his duty and to the prejudice of the state, rather let it be said, that he magnified the law and made it honorable.
If the provision in the third section respecting the Land-Office be regarded, it will be recognized, that by the second section an obligation is imposed not upon the holder but upon the state, pay the New-Loans on application with a like sum in Continental certificates, let it be remembered that this idea of exchange is altogether out of the question, as it does not come after the repealing clause, the obligation, I say, is altogether on the state.
I ask then when the obligation of this transaction is not equally obligatory on both sides, and when the state is either to pay or take up the New-Loans on the application of the holders, by delivery of its own property of a particular kind, but equal value, what is the reason, or meaning of it?
Does it not imply necessarily a right in the holder to demand, and an obligation on the state to pay or deliver?
Does it acknowledge the debt or not? Are not the Continental certificates strictly the property of the state? When they are obliged to part from them, does she not part from a thing of value?
If the state lies under this obligation, the New-Loans are a debt due from her, strictly and properly speaking, though they are redeemable only in a particular mode.
[Page 382]What are the Continental certificates? They are not money to be sure!
But they are a commodity, or thing of value: The existence of the debt does not depend on the species of payment: Whether my satisfaction of a demand, my dislodging an incumbent obligation on me, is done by the delivery of money or any other obligation, it is a debt still.
Let me ask, whether any subscriber of state debt believes that Congress if their funds were to fail for the discharge of interest, could compel them to take back state certificates again. AH PUNIC FAITH!
This would have been a mere tender law, and consequently void; and a nullity.
The continent had assumed state debts; the entries were made on the books of the Treasury. In other words, will the United States perform their engagements if the United States should say, take back your state certificates. Such a law would be unjust, and not binding; any subtraction of the debt would be dishonorable to the Union; it would rip up credit from it's source—Oh! such an idea is preposterous. What then is the meaning? Then sure, it does recognize the debt. Are not the Continental certificates strictly the property of the state.
Suppose for instance, that Congress had enacted that proposition into the funding system, which was proposed by the Secretary of the Treasury in his report on public credit, that two thirds of the debt should be funded at an annuity of six per cent. redeemable at pleasure, and the other third be paid in lands in the Western Territory, at twenty cents per acre. Would this have been a destroying of one third of the debt? No; it could only have been in this case a modification of the payment. Mr. Gallatin in his testimony (page 296) declared that it was immaterial to redeem that way or by the Land-Office, the price being then nearly equal; the Land-Office was shut against the New-Loans by the Act of March 1789, but another door is thrown open, another fund is substituted for the holders of the New-Loans, [Page 383] in point of principle the same. The state says, we cannot go no further, the holder does not get quite so much; Mr. Gallatin tells you, whilst the Land-office was open, a fund was provided; then the Land-office being open recognizes the debt; shut the Land-office, the loss is certain. Here is a recognition of the debt; this is a matter of disgrace to Pennsylvania, first make an advantage of a bargain, then depreciate, and lastly buy in at a discount.
Who is our accuser? The State of Pennsylvania. I demand that the state of Pennsylvania will come with clean hands herself; we are ready to receive the stroke of justice; there is no force in the objection; it is of no consequence to say that Congress would eventually pay the money on the Continental certificates; the means of reducing that to possession are certainly just as valuable as the benefits those means can procure, and the parting with the means is parting with the end, and therefore with the value.
Because, I pay my debt to my creditor with the bond of my debtor, it makes no difference.
To explain further. If the New-Loans are admitted as debts of any kind; if they invest the holder with a right, and impose an obligation on the state, as in the words of the Act; if those holders are creditors at all of the state, then they are within the sixth clause of the redeeming Act of the 10th of April 1792. (Mr. Higginson was interrupted by Mr. Ingersoll, who said, "It is not admitted.")
If the holders are creditors this will not be denied. Are the holders of the New-Loans creditors of any body? If they are creditors then, and the New-Loans are the evidence of that credit, to whom are they creditors? Of the Union? No. Are they creditors of the State? No; say they! that character is destroyed.
Justice and simplicity delight in each other; they are the creditors of the state, or more literally speaking, they put their trust in the state, and the state on the other hand, in this Act, acknowledges that she has [Page 384] something in trust for them; which she obligates herself in this very Act to pay or deliver.
But, it is said, that this Act had received a silent construction from the statements of this, and other officers, speeches of the Governor, wherein the claims against the state are enumerated, in which the New-Loans were omitted, reports of committees on ways and means, in which the actual demands against the commonwealth are set forth, in many places they are called New-Loan debts: These were likewise omitted, all being after the passing of the Act of March 1789, make a strong argument, as shewing the uniform construction in all their procedures.
It is not safe to infer strongly from mere omissions, this is a negative circumstance, to infer from the omission more should be shewn than the omission; that there should have been a propriety or duty in absolutely inserting them.
The Executive whose part it is to address the Legislature on the opening of each sessions; to communicate to them the transactions of his department, in the execution of pre-existing laws, to point out the objects which seem particularly to claim legislative attention, and above all, to state the situation of the Treasury, the amount of existing and payable obligations, for which provisions must be made by actual appropriations.
Finds it necessary to resort to those officers with whom the documents giving this information are lodged: These officers make reports with an eye to this object; the Governor takes this report for his guide to that object in his speech, or other communications.
And then the committees on ways and means, in the House, whose very name and stile point out their duty, and their sphere, reported upon the same subject; in neither statements, speeches or reports were the New-Loans included after the passing the Act of March 1789. And why not?
Because there was no propriety in including them, because they were unfunded, and therefore irrelevant to [Page 385] the subject of Ways and Means: (Because the arrears of interest excepted which were expressly stated) there was not arising out of them any demand which the Legislature had made actually payable, and for which an appropriation with Ways and Means would be necessary. It was on this ground the unfunded depreciation was not included in them. To draw any inference from this omission would destroy the distinction between funded and unfunded depreciation debt. If an appropriation had been necessary, it would be a subject for the consideration of the committees on Ways and Means. It is one thing for the Legislature to resolve to pay a demand, and another, and a subsequent one to provide Ways and Means, 'till the former is done, the latter is nugatory and unnecessary.
Again, Sir, it is true, that in the last report read, which is the only instance of the kind, there is a statement of all the debts of the commonwealth, and also the sources of revenue, in which the unfunded depreciation is included, and the New-Loans are not included, but this will be accounted for, when we consider; that the Land-office was open to the unfunded depreciation certificates, whilst it was shut against the New-Loans: for which there existed the provision by exchange in the Act of March 1789, the State was redeeming her New-Loans with those who choose to make the application without diminishing her own active capital, while the holders of the Continental certificates exchanged, suffered a diminution on the nominal value, contemplated in the funding law of Congress; but as long as the State kept her Land-office open to the unfunded depreciation certificates she was actually paying off the unfunded depreciation out of her own capital.
But these topics may certainly be dismissed, for if the committee had expressed their opinion directly against the New-Loans as a debt, it would be neither more nor less than the last committee did, who originated this impeachment, and could have no more influence [Page 386] or weight, except their opinions had been bottomed on a more solid foundation.
But, again, it is contended from another quarter that this subject hath received a construction, and been expressly decided upon by the Secretary of the Treasury against their subscribability. Permit me to turn for a moment to that correspondence, the first letter which is connected with this supposed decision is the letter of Mr. Gallatin of January 14, 1793, (page 74-5-6) and its answer, (page 76-7-8) by which it is attempted to be proven that he has decided on their non-subscribability.
(After the two letters were read, Mr. Higginson observed.)
I will not undertake to say how far it was proper for an individual member of the committee to anticipate the Act of the whole, and as it were forestall information on the subject; however, it may be remembered, that at this time, the impeachment was slowly growing under the fostering kind culture of the writer's, (Gallatin) hands.
The first circumstance that strikes me in reading this letter and the answer, is, that the two last questions were left unanswered by the Secretary of the Treasury; to the last he replies nothing, and on the matter of the second he observed hypothetically, that if the New-Loans are not a debt they are not assumable; from this circumstance I infer, considering that gentleman's character, (I mean the Secretary of the Treasury) that those questions were in his opinion improper; at all events it is certain that the answer to it was not what was wished for, otherwise the subsequent letter of the Governor, which I shall presently read, would have been unnecessary, the object of enquiry being precisely the same. This letter of Mr. Gallatin's, contains a singular course of reasoning, and deductions from premises, which the writer knew at the time to be unfounded. The Secretary states forty thousand pounds, as outstanding; he (Mr. Gallatin) then goes on to observe, "But as some [Page 387] have been offered," &c. (page 75.) Sir, he had it not more in proof that some of them were not so exchanged after they were offered than before. From the documents of the Comptroller-General a report had in the first instance been made to the Governor, and transmitted to the Secretary of the Treasury; the writer's animadversions therefore on that ground impliedly criminates that officer.
He observed also, that "I should be led to think," &c. The grounds of the Secretary's opinion did not imply any such declaration; but even if the premises had been true, the conclusion would not follow: This would indeed be a fiction with a witness to it.
Here I will take it with Mr. Gallatin, that the reason why the Secretary of the Treasury did not require the surrender or suspend the interest, must necessarily have been, because, he looked upon all the New-Loans to be either redeemed or re-exchanged; now, if in order to account for the Secretary's not requiring a surrender or suspending payment of interest, the inference is that he considered them assumable and redeemable; Does it follow that he should reject them as assumable? by no means. The contrary is the proper conclusion; it follows immediately and directly that he should admit them as assumable, and it would also follow, that the demand could only be on the grounds that they were assumable, and also that a suspension would follow unless the Continental certificates were surrendered, which the Secretary of the Treasury agreed might be done.
But the answer to this letter did not contain the idea which seems to have been anticipated and expected by the writer; therefore we find the Governor writing to the Secretary of the Treasury on the same subject the 29th July 1793, (letter page 351-2 then read) and the Secretary's answer of August 21, 1793 (see page 218-9). This letter left the question of the validity of the Act of March 1789, respecting the assumability of the New-Loan certificates untouched. The opinion of this officer on the subscribability of the certificates is not expressed [Page 388] in any part of this letter. "These circumstances, &c." this sentence contains an opinion, but that opinion is not on the principle that New-Loans are not assumable, is not, that the law of March 27th, 1789 destroyed them as a debt, but it is that the foregoing enumerated circumstances arising from the interference of Pennsylvania have amounted to a virtual rejection of them in effect; which does not even implicate his opinion on the question of law.
Again, "I was about to conform, &c."—This surely does not imply his own opinion, and how far this officer, after having referred a question of law to the Attorney-General of the United States, the first professional officer of the government, and received his opinion, may think himself bound by it, I cannot undertake to determine.
It is probable however, when the question was somewhat doubtful and the opinion founded on public expediency, when this State appeared so anxious to avoid any misunderstanding with the Treasury of the Union, that opinion might be considered obligatory as to the fact of admitting or rejecting them. We contend, however, that the Secretary of the Treasury had not in this letter expressed his opinion at all on the operation of the Act of March 1789, much less on the validity of it; if then, it is clear, that the Secretary of the Treasury has in the course of this transaction expressed his opinion unequivocally in favour of the New-Loans, and if in this letter he does not express his opinion against them, there are still odds in favour of the officer now on his defence: But I go further, Sir, and contend, that if this officer has at all expressed his opinion on the principle of this question even after the disclosure of the Act of March 1789, it is in favour of the New-Loans and not against them.
This will appear from several passages in his letter in answer to Mr. Gallatin's letter; when the Act of March 1789 had been brought into his view, for he expressly adverts to that objection.
[Page 389]Before I read those passages, suffer me to make a comment on the first part of a former letter (see page 76, &c.) from this officer. It may serve to shew that the extreme solicitude discovered by the State with regard to this question might have betrayed the Secretary of the Treasury into a want of accuracy, a mistake which can be very seldom imputed to him.
The paragraph to which I allude is that (page 77) "that they should at the time of being subscribed be recognized by the existing laws of the States as evidences of debts by them respectively owing." With the most respectful deference to the writer of this letter, I conceive that this expression is not sufficiently defined [...] accurate; for if any State had passed a law abrogating certain certificates, which by the funding law were made subscribable and redeemable, that law would not be permitted, or suffered to take away that right or benefit thus given and guaranteed by a pre-existing and paramount law of the United States.
Because, after the passing of the Act of the 4th of August 1790, the whole loan under the assumption, at that rate, might have been defeated, frustrated, and rendered void.
In a succeeding paragraph, he observed, "If however the New-Loan certificates are not by the laws of Pennsylvania considered as debts but merely as receipts for certificates of the United States," &c. (see page 78.) It may be observed that this is a mere hypothetical expression, and as it comes in as a qualification to the other remark, that as the certificates were then presented, no doubt could be entertained of their assumability, it clearly implies that if this condition fails, that is, if the New-Loans cannot be considered as mere receipts demandable at the pleasure of the government, then no doubt could remain of their assumability also.
Now taking it for granted for a moment that the State could convert that into a mere receipt, which was originally issued as an obligation, yet she has not done it; as there is nothing then which obliges the holder to part [Page 390] with his New-Loan on the application of the State, it is utterly impossible to consider the New-Loans as mere receipts, demandable at the pleasure of the State; and their being so, constitutes the very object of the Secretary of the Treasury's supposition. As then this hypothesis fails, as the New-Loans cannot be considered as mere receipts demandable at pleasure, what follows? Why, they revert back to their original ground, the proposition assumes its first and original form, and in the opinion of the Secretary of the Treasury, they are assumable:—This idea is held out in another of his letters, where he adverts to the Act of March 1789, but to suppose that the holders of New-Loans are creditors, and their certificates no more than mere receipts, and consequently no debts, this position cannot be supported without doing a violence to the letter of the law; but, on the other hand suppose we shall coincide with their construction of the Acts of the Legislature, and agree with the Attorney-General of the United States himself, who says, (page 81) that "the Act of March 1789, &c. abolished these certificates as debts of the State, as wanting the due recognition from the State, and cannot be legally received upon loan." A moment's consideration will shew that this was a contract: And when the Constitution of the United States is brought into view, this instrument says, that all debts and engagements shall be as valid against the United States under this constitution as under the confederation. But they say first, this does not apply, and secondly they say, the Constitution refers only to contracts between individuals, and not between a State and her own citizens.
Now it is certain, loans are contracts, and if contracts are loans, and the Act of March 1789 passed after the adoption of the Federal Constitution, then it is certain that the New-Loans are subscribable and consequently redeemable.
If it can extend to contracts between citizens of a State, a fortiori, it extends to contracts in which the State is a party.
[Page 391]So intimate is the connection; so great is the influence which the conduct and character of the several States have upon that of the Union, that the framers of this instrument must have been blind to the general interest, if they had not introduced this provision.
To tie up the hands of the Union, therefore, in that Constitution would have been useless, without tying up also the hands of the States with respect to their contracts.
Will the United States tie up their own hands and not tie up the hands of the individual States? Thus guarding the two extremes and leave a vacuum in the middle unguarded!
What was the reason for inserting it in the Constitution? To preserve public credit. Is there a more delicate subject in the world than public credit?
The situation of the country at the time made such a provision necessary. The American name which from the independence had been sliding fast to ruin, had every thing to make her happy, but wanted one thing to make her respectable, that was CREDIT; the grand desideratum without which the rest would be nugatory and unavailing.
Sir, if the limbs were palsied, what would it avail that the body was sound, I will not insist upon the proverb of the sheep, but this I will say, that where the children turn out badly, it is apt to hurt the reputation of the family: If a State had the power of impairing her own contracts and sacrificing her faith, then it would follow, that however well disposed the general government might be, however sound at the centre; yet all the States in succession might sacrifice their credit by impairing their contracts, and the Union robbed of her respectability, and her credit by the mismanagement of her children left to parry the strokes of fortune.
But another thing; this omission would not only have been the road by which the credit of the Union would desert it, but it would have been the source of confusion and contention at home. If the Constitution had [Page 392] not expressed this prohibition, civil wars might have been the monuments of its weakness. While in one State the obligation of contracts was held as sacred as it ought to be; in another they would be prostrated to temporary convenience.
Taking this case, then, to be literally within the words and essentially within the spirit of this clause; let us see in what manner it has been violated.
And first. Were the New-Loans a debt, or evidence of a debt due from the State of Pennsylvania at any time before the passing of the Act of 27th March, 1789?
As to this, I take it to be undeniable that the New-Loans had been a debt of this State. This is not only acknowledged and implied by the tenor of the articles themselves, but they are expressly called a debt of the State in the Act which created them; and also in the Act which impaired them.
Indeed, this is conceded on all hands, except by one, the Treasurer of the State (see page 68) in his letter to the Speaker of the lower House; wherein he stiles them "Which in fact never were a State debt."
It may be observed however, that if the law of March 1789 should be found not to abrogate or destroy the debt, which I think will appear, yet if it in any way impairs the obligation of the contract, it is most clearly and undeniably a violation of the Constitution of the United States, and therefore void to all intents and purposes, and if so, this tribunal is bound to consider it, as never having any existence.
Again, and for the last time, upon a strict comparison of the Acts of March 1786, and that of March 1789, it will be found that the New-Loan certificates were equally unimpaired after the Act, as they were before.
Let us see how much, in order to distinguish between those parts which created the debt itself, and those which directed the payment of principal and interest: It may be considered the funds for payment of interest were temporary. (Mr. Higginson then read the minutes of 1789, page 145, by which it appeared that the provision [Page 393] respecting the principal of the New-loans was introduced at the third reading of the bill. The original and primary object of the bill being, that the interest should cease, as the provision for that purpose had been temporary.
In page 184, "it was moved by Mr. Fitzsimons, seconded by Mr. M'Pherson," &c. The bill originated through the exigency of the State. Before the law passed, the Land-office was to have been shut, in what manner was it to be produced? it was forbidden—Is not forbidding a payment in futuro, a testimony of the existence of the debt.
The payment of New-Loan certificates was prohibited in the Land-office. Now, what parts are those of the Act of March 1786 which created the debt? Even the Act itself did not immediately create the debt; those parts in the second section do not. The loan was to be opened, suppose none chuse to subscribe to it immediately; then there would be no debt: By opening, subscribing, and paying, the debt sprung into existence, that moment it became a debt: and a certificate is given merely as an evidence of that debt. (The second section of the Act of March 1, 1786 was then read.)
There is nothing in this to secure the payment of either principal or interest.
Nothing in the second section directs or secures the payment of the debt, the kinds of certificates directed to be received on loan are not immediately under the first and second sections.
But the repealing clause of the Act of March 1789 has full force, satisfaction and complete existence out of the other clauses of the Act of 1786. Ingenuity itself with all her hundred eyes is not able to escape the inference which I draw from a strict comparison of the Acts of March 1789 and 1786.
Why then need we be drawn into the imputation of so disreputable a violation of public faith? How then, can it be charged, as hath been done by one gentleman, that this officer by the magic wand of his office [Page 394] had conjured up the ghosts of the departed New-Loans to frighten away the dollars of the commonwealth, without imputing to the State, who was their creator, the odious crime of unnatural murder?
Let us now consider how this hath been construed by the Legislature.
In an Act passed the 30th September 1791, for the relief of Sarah Caldwell and others, who had lost New-Loan certificates, the State undertook to subscribe for their use, and to pay to them the interest on such subscriptions, on their giving security to indemnify the State ag [...]inst the holders of her certificates.
This Act proves two things. First, that the New-Loan creditors of themselves could do nothing, they had no claim on the Union, and therefore were not creditors of the Union. And secondly, By requiring an indemnity from the holder, inevitably implies a right of demand on the State vested in that holder, and that right of demand whatever it be, constitutes the strictness and propriety of character of CREDITOR.
In the instructions of the Supreme Executive Council (page 267) are these words, "You will issue a new certificate." Will it be contended that these are mere receipts? can certificates of parts be debts, when the whole was no debt in its original form?
As the case then is brought thus clearly within the scope of the redemption law of the 10th of April 1792, what can be offered in opposition to our conclusion?
One thing only, that as the New-Loans themselves amounted to more than this State's proportion of the assumed debt, it could not be imputed to the Legislature, that they meant to include the New-Loans: it may be remarked, that as the inference drawn by Mr. Gallatin from the consequences of the rule laid down by him relative to the 4th article of the confederation, it only proved the law a bad one.
As this is introduced a presumptive argument is brought forward against it. They say, how injurious it is to the State, and of what bad consequences to redeem [Page 395] her own debts at 20ʃ in the pound! If they call this a bad consequence, give it that construction, as a presumptive argument as it regards the State, the consequence is with us, and not with them.
Here is a singular circumstance, they have violated the rules of law, they have construed the law of 1786 strictly with regard to this object; and they have construed the law of 1789, which confers benefits liberally in their own favour.
Again, another argument is brought forward.
It is said the sixth section is a proviso to the second section.
If so, the object was those which she had before redeemed in the second section to the benefit of the state.
If so, the sixth is co-extensive with the second as to objects. If the New-Loans by the sixth section are redeemable through the medium of the United States, it is still better: If they are not redeemable, the mode is not commensurate to the objects contemplated in the second section, and it is wrong to ascribe that to the Legislature, which could not be her motive.
Bills of Credit are enumerated and provided for in the second section; the sixth section is introduced to be beneficial, and yet Bills of Credit are not included in that section at all, notwithstanding which, it is called a provision to the second section; with an eye to superior advantage, they ascribe a ridiculous motive to the Legislature: that by the Act of April 7th 1791, the arrangement which is injurious refers only to the Act of March 1789, as an arrangement for the future: The State may deem it proper to make such for the purpose of avoiding any interference with the State or domestic subscription.
Had it been the reason the State would have actually assumed her domestic debt.
It was easy to tell the amount of what was outstanding.
It was only to conduct the outstanding from those on hand; there was no difficulty; it was only to add or to subtract; the object was to leave greater room for those [Page 396] debts which were a greater and a more immediate burthen on the State.
One of two things must be their object.
1. Either to narrow down the interest, or 2 To give a facility to re-exchanging, and to their subscribing to the Continental loan; and in either case the New-Loans would not be re-exchanged at all.
No other reason can be properly given for it; if we construe the law liberally, and not foolishly.
It was contended, that if we should have construed the sixth section literally, we could not have given it so foolish a construction.
It is said the Comptroller committed himself by rendering an estimate to the Governor. If a provision is made in the sixth section of the Act of the 10th of April 1792, there may be some reason for it; but if not, the supposition is unsupported.
Let us consider this a little; it is clear from the second section, that no provision is made there for unfunded depreciation, and none for the New-Loans in the same section.
One of them it is agreed, and both, we contend, are included in the sixth section; it is also clear that no certificates which are not included in the second section, can participate in the funds to be created by the sale of 3 per cent. stock; for that fund is limitted to the objects therein enumerated.
It this be true then in an estimate which was to direct the Executive in the sale of 3 per cent. stock, neither the unfunded depreciation nor New-Loans should have been included, even if the estimate had been made after the Act for re-opening the loan had passed: But at all events, I ask, how was it possible that the two officers, from the 13th to the 16th of April, could include in their estimate objects that would be embraced eventually, if at all by the sixth section; whereas the Act of Congress of the 8th of May 1792, was not then passed.
Instead of using this construction of the law for their [Page 397] own purposes, they are compelled to use it for our purposes.
Let us for a moment suppose, that the Legislature intended as they are inclined to have it, and see the consequences, and how do you find this construction of theirs, to work the destruction of the debt? Their construction is conjectural, useless and dangerous: If subscribability is the criterion, they are mistaken in the premises; if the New-Loans are a debt, subscribable and redeemable are convertible terms.
If the ideas are not to be collected from the Act itself, then we shall in time have an hundred laws instead of one, then an end to legislation.
Having made these observations on the first articles respecting the law, I will in the next place treat of the the motives. But first permit me to make some observations respecting the three last articles of impeachment.
We avow the facts contained in the fifth article, defend the legality, and contend we had a right so to do.
When the defendant assumed the office of Comptroller-General, he did not relinquish the duties of a citizen. How far it may be good policy to pass inhibitory laws, and how far it may be improper, to pass such positive laws, until such laws are passed, we have certainly a right, and until a question is raised on such positive law, our actions cannot be impeachable.
We have heard from Wodeson that a public officer should have no interest distinct from the State.
Where is the force of this reasoning? attend to the circumstances. That impeachable matter must be an injury to the State, and not the gain of the officer. Where is the injury to the commonwealth in this particular? In what does it consist? Does the payment of a just and valid debt constitute this injury and detriment? If such can be viewed in this light it is well worthy of observation.
The 6th and 7th articles aim to place us in a much more irksome and ugly situation, and here I cannot help remarking on what fell from the other side; that great [Page 398] merit is due to them for being able to shew so much, when from the heinousness of the fact, the Comptroller might conceal the whole matter; how singular, that this very proof and testimony is evincive of our innocence. Nay, in this particular our accusers take merit, that they have shewn and proven too much.
There is one thing common to both these articles, they infer property in the State, and make it by implication necessary, and from different premises; it is presumable the framers of these articles thought property essential to constitute the offence.
In the sixth article it is inferred from the certificates being lodged for the purpose of being re-exchanged. It may well be asked, Had the owner no controul over them, what was his ultimate object? On what condition were they to become the property of the commonwealth?
Sir, the Act was only inchoate, indents were to be paid, or received. Could the State withhold the certificates if the party choose to withdraw them? Would it not be liable to execution as the property of the party? No doubt of it.
The committee, who were the drawers of this article, have shewn their idea that this conclusion was weak, and unsound, for if this constituted property, the fifth article would be nugatory and unnecessary.
(The fifth article was then read.) This gives a definition of the exchange. The committee have plainly discovered that the facts in the sixth may be demurred to.
What is the proof brought forward to support this 7th article? It is said Mr. Blair M'Clenachan was once the proprietor of a certificate which he never sold to us, and they endeavour to throw the burthen of the proof on us. This witness speaking from memory, says he did not receive this certificate from Matthew M'Connell, he does not pretend to say that he sold or exchanged this or any other certificate with the Compttroller-General; but he tells us expressly that he sold to others.
[Page 399]Let us examine this a little▪ He says he did not receive our certificate of £. 3275:19:4 from Matthew M'Connell, this he absolutely received in April 1788.
The witness, who is brought forward is unable to prove how he came by any of his certificates.
This idea involves a new and delicate point of law, taken from analogy in other criminal cases. When a felony or forgery is sworn to, and the instrument with which the felony or forgery was committed be found on a person, the presumption is so strong, because he has the thing wherewith the crime was perpetrated, that the party with whom the instrument is found must account. Here they say the witness did not sell it to us; but they endeavour by the absence of the fact to lay the burthen of proof on us, to make a criminal charge where there is no proof of criminality.
A certificate was once Mr. M'Clenachan's; one of two things must be admitted. 1. That the certificate was exchanged, and criminally converted to our use; or, 2. We bought from some other person. It proves nothing against us. Out of the two modes, which is most presumable? one is a fair purchase in a circuitous route, the other a criminal conversion.
Is there a criminal tribunal on earth which would admit a proof so nugatory to support and enforce a prosecution? Need I ask which will be chosen. Is the heaviest and most attrocious item to be supported by the slightest proof, by the vague remnants of a memory frail in its best estate? If this were supported as it is represented, the breath of the offender might taint the walls that hold him. But we find a mill-stone in the articles, and a feather in the proof.
Sir, I do not fear, because I do not believe that this tribunal will find it to their satisfaction to convict a respectable fellow-citizen and a responsible officer upon a rash and dangerous implication upon evidence so trifling and indefinite, and that too going to a charge perfectly vague in itself and general as the light we see by.
This brings me to the second division of my subject, [Page 400] relative to the criminal motives, and being more than half through the arguments, it will take some time to finish, and as it will be inexpedient to break off the subject in the middle, I hope the Senate will adjourn.
Mr. Lewis rose, and observed, that the gentleman had spoken three hours, and must be exhausted, and requested the Senate to adjourn.
Adjourned accordingly to four o'clock same evening.
In the minutes of the House of Representatives the following entry is recorded:
"In conformity to the resolutions of the 25th of February last, the House resolved itself into a committee of the whole in order to attend the trial of John Nicholson, Comptroller-General of this commonwealth now depending before the Senate on the articles of impeachment exhibited against him by the House of Representatives.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee of the whole then proceeded to the Senate-chamber for the purpose aforesaid.
"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair, and the Speaker resumed it.
"The Chairman then reported that the committee of the whole had attended the trial of the said John Nicholson.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported that they had made further progress."
[Page 401]
Same day, 4 o'clock. P. M.
THE Senate met, Court was called, &c.
Mr. HIGGINSON.
Gentlemen of the Senate,
Length of duty this forenoon has given me a violent head ache, I hope the Senate will adjourn; I will take but an hour in the morning: In the mean time I will concentrate my ideas, so that I shall not take up much of your time.
Mr. Morris informed him, that the Senate were disposed to indulge him. Adjourned.
In the minutes of the House of Representatives the following entry is recorded—
"In conformity to the resolutions of the 25th February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General of this commonwealth, now depending before the Senate, on the articles of impeachment exhibited against him by the House of Representatives.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee of the whole then proceeded to the Senate-chamber for the purpose aforesaid.
"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair, and the Speaker resumed it.
The Chairman then reported that the committee of the whole had attended for the aforesaid purpose.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported that the counsel on the [Page 402] part of the defendant who had commenced his arguments this forenoon being indisposed, the Senate had therefore adjourned the further hearing thereof until ten o'clock to-morrow morning."
Twelfth day of the trial. WEDNESDAY, March 12.
THE Senate met pursuant to adjournment; the members of the House of Representatives in committee of the whole repaired to the Senate-chamber as usual; the Comptroller-General uniformly kept his seat as described in page 202, and wrote without ceasing, as well during the time employed by his own counsel in the defence, as by the opposite party.
Mr. HIGGINSON spoke as follows—
Having yesterday observed on all the articles of impeachment, except the third article; as it respects matter of evidence in supporting the criminal intent in redeeming or causing to be redeemed New-Loans: I will make some remarks on that head, and the circumstances which evince the integrity of the officer now upon trial.
To introduce this, it is necessary to observe, that, out of the doubtfulness of the question on the law itself, if on all hands the construction of the several Acts has created embarrassment, it will be remembered, that on the reading of the report to the Lower House, after the committee had had the subject before them a very long time, Mr. Gallatin apologized for that delay by informing the House that they had waited some time for the opinion of the Attorney-General of the United States (Mr. Randolph.)
If their charity hath begun at home, I hope yours will not end there.
The Secretary of the Treasury doubted the construction of the Act of March 1789, and deemed it so [Page 403] doubtful a question as to induce him to consult the law officer of the general government.
Now, sir, let it be recollected, that in ordinary and perspicuous cases, this recourse is never had to professional and official opinion. From this, then, it may fairly be inferred that this case was not ordinarily perspicuous.
It is impossible to state the degree of perspicuity which is necessary for any particular mind to found a conclusion upon.
But if the mind of the Secretary of the Treasury in considering the case from the relation that every law bore to the subject, partook of these embarrassments, how easy is it to conceive that from the bona fide construction of the Comptroller-General, that decision might have resulted, the consequence of which was the redemption of these certificates.
If then there was this want of perspicuity that created on all hands hesitation and embarrassment, it would have been highly useful and proper in the Legislature to have given to this section a clearness incapable of being mistaken. If upon laws of uncertain construction, every error that an officer commits in following the dictates of his own judgment, should be liable to impeachments, such posts must have been deserted, or held on a slipp [...] [...]dge, and at a great hazard, when every step may be that of destruction.
But in the second place with regard to their subscribability, other officers of eminence, of talents and integrity, concurred in opinion with the officer now under consideration.
Sir, it is in testim [...] that the Secretary of the Treasury pending the first loan was of opinion, that the New-Loans were subscribable, and gave such an opinion to the Continental Loan-officer, and that the business is not to this moment decided upon, and he mentioned the same to the commissioner aforesaid (see page 273-4-5.) "I do not consider you as justifiiable." &c.
Mr. Addison, a law officer of the government, was [Page 404] of this opinion, a gentleman well qualified, and of much integrity. What is to be inferred from the silence of all the State officers during the demand of the Continental certificates? they all held the same opinion. (The letter, page 102, was then read.)
If the Secretary of the Treasury had been unacquainted with the law, were the Governor and Secretary of the commonwealth ignorant? The whole tenor of this letter necessarily implies the sense of the writer to be that the New-Loans were liable to be assumed, for the whole provision being to prevent the payment of interest twice on the same sum; no question could arise out of it with regard to the New-Loans, without their being subscribable: In all, the suspension of interest and assumability were the principal things to be considered. If any doubt had existed with the Governor, would he not have sifted it to the bottom? If any doubt remained respecting their subscribability, would they not endeavour to clear up the matter?
With regard to the Secretary of the commonwealth, there is a circumstance which strongly corroborates the assertion, that he must be satisfied of the subscribability of the New-Loans. He appeared to be surprised when the matter of the assumption was communicated to him; this information seemed to run counter to his judgment! The Secretary had seen Mr. Nicholson's plan of finance, in that plan the New-Loans are recognized as a debt; he approved of the plan, (see his letter page 286.) It came before him with its "prominent features;" the plan put the New-Loans on the same footing with other debts of the commonwealth. Why surprised? Perhaps the reason may be, because there was no redemption law at that time. Is that a reason? Why? certainly not.
Further, It is given in testimony that after several conferences the Register-General concurred in opinion with the Comptroller-General, and that the accounts contained some certificates depreciated on the principal which no body could mistake for any other than New-Loans; [Page 405] the probability is, that the same was redeemed; immaterial whether before or after our abstract, which had been bona fide presented and redeemed: Yet this man, whom they represent as hackneyed in perfidy, this man who veiled and masked the proceedings to delude the other officers of government into error is found expressly to have communicated with them, while they participated in the conviction which that conference produced.
The next reason, then, that I would offer is that the Comptroller-General held the same opinion on the assumability of the New-Loans, long before the Act of April 10, 1792, by which alone he became interested.
First, From the testimony of the Secretary of the Treasury (page 287-8-9.) 2dly, From the Comptroller's own letter to Mr. Smith, the Loan-officer (page 271-2) eighteen months before the redemption law. Nothing is clearer than that the writer of this letter was confident that the New-Loans were assumable, although he was convinced they would not be offered subject to the disadvantages of the funding law.
It was against the interest of the New-Loan holders to subscribe them, it was for their interest to exchange them for Continental certificates, and then to subscribe those. In the next place, the same opinion is also expressed in his letter (page 220-1-2) to the Governor. I ask whether it is possible for any thing to express more clearly and unequivocally his opinion of their being a debt due from the state, and of their subscribability; it seems from the former part of this letter that the Secretary of the Treasury had taken higher ground, and demanded a surrender of Continental certificates equal to the amount of New-Loans outstanding; or suspend the payment of interest, this it is evident had been actually relinquished by the Secretary.
Hitherto the current of testimony sets in, strongly, on the side of innocence. (His next letter to the Secretary of the Treasury, page 277, then read.)
It will be remembered that in the letter of the 24th December 1791, five days before this, the Comptroller [Page 406] tells the Governor, that none of the New-Loans were actually subscribed; though they were subscribable, and therefore there was no need of a surrender. This was the object of the negociation, and therefore he informs the Secretary of the Treasury of the same thing; that if a doubt should arise, whether part of the assumed or subscribed debt of Pennsylvania does not consist of New-Loans, it can be easily proved it does not. No body can doubt this to be the meaning, when they recollect that in his former letter to the Governor, and that to Mr. Smith, he not only recognized them to be subscribable, but said they were not, or would not be subscribed; it being against the interest of the holders.
Still less shall we doubt it, when we turn to the letter (page 278) wherein we trace the same sentiments.
(The letter page 223-4 was then read.)
Thus, we see the consistency and uniformity of the officer now on defence, in persevering in the same opinion for the space of eighteen months before he became interested. Sir, I think this gives a mortal blow to the prosecution, and the charge of fraud vanishes like the baseless fabric of a vision, which leaves not a wreck behind. But this is not all, for if we descend to the particular periods when the transactions took place, we shall discover there, also, a train of co-temporary facts, equally invulnerable and conclusive.
The next reason which I shall offer, arises from the caution which he gave the members of the Legislature when the redemption law was under consideration.
When the extent of that law was in contemplation, when gentlemen undertake to paint the distressed and ruinous consequences to the state, which would follow the admission of the New-Loans to sweep away the whole quota of the assumption of Pennsylvania, while at the same time it absorbed the specie from her treasury; let them have the charity to remember that this officer, whose spirit they are now grieving, raised his voice and hands against that dangerous proceeding at that time. This is not the language of disgrace.
[Page 407]But, again; the transactions were conducted in the usual forms of office, and in his own name; and it is remarkable that the committee on whose report this impeachment was founded, gave their opinion in that report, that the said John Nicholson has been guilty of a high misdemeanor for two reasons, one of which was that he passed and certified the New-Loans to the Executive in the usual forms of office, thereby causing them to be redeemed. The jet of the reason is in the "usual forms" of office, by which they were redeemed.
If then forms had been unusual, the very singularity would have been prima facie, a presumption and evidence of other than ordinary design or intention, this charge is indeed to make the usual course of business the evidence of guilt.
A like charge and equally unimportant appears to me the matters contained in the third article of impeachment.
This article is mean in substance, and pitifully drawn: The first thing singular is, that they begin with the criminality and go on to the facts. "In order to promote and procure his own emolument," &c. till it was actually reduced to possession, implying, that after the emolument was reduced to actual possession, there was a certainty or probability of detection; this idea is too futile, nobody in their senses will believe this to be true; for what purpose could it answer to deceive for the possession, when certain detection was to follow it? Again in order to avoid "discovery till" &c. "he did not consult the Register-General," implying that after the emoluments were in his possession, he did consult the Register-General: Let me ask, how came this peculiar phraseology to be given to this article?
We have had the history of that from Mr. Gallatin, who was the principal member of the House of Representatives at the time, we have been informed that upon the examination of the Register-General, although not examined upon oath, the first part of this article was founded.
[Page 408]It was found, that, after most of the abstracts had passed and the Comptroller-General had actually received the amount of his; there was a consultation among the officers, when the Register fully concurred in opinion with the Comptroller-General, and although there were sufficient distinguishing marks on the face of the abstracts, to ascertain that New-Loans were contained in them; and although these distinguishing marks were in a part to which the whole business of the Register was confined, namely the calculation of interest, and therefore, it was no fault of the Comptroller-General that they were not sooner known, and although the Register declared that when they were known, he was fully of the same opinion, and accordingly officially passed some abstracts afterwards, knowing them to be New-Loans; yet the committee, forsooth, instead of throwing aside the article as unsupported, resolved to amend the article, to suit the testimony whatever it might be, in order that the Comptroller-General might be set for a while on the stool of repentance; because the Register-General in calculating interest on a certificate depreciated on the principal, was not sagacious enough to find out that it was a New-Loan, and therefore in the true style of the dramatist, the passion for incident is to absorb every other faculty.
But, Sir, let me proceed to the facts, facts! Did I say? I was wrong, sir, there is not a single fact charged in this article, they are only omissions. That "he did not consult the Register-General, nor communicate the matter to the Governor" before he got his money, and that he did not discriminate between the New-Loans and others. It is pretended, that this was an incumbent duty on him, the contrary is clear, for neither did his duty require it, nor the usage or practice of the officers make it necessary. It is not shewn to be his duty but it has been observed that in so important a case, he ought to use some works of supererrogation.
[Page 409]Is it singular that a man should be charged criminally, for the omission of that which avowedly was not required of him by law?
As to his certifications to Mr. Smith the Loan-officer, I conceive them to be out of the question, for these reasons. 1. He was not acting then as an officer at all, but having received a letter from Mr. Smith, requesting information, he gives it as a friend to the best of his knowledge. 2. As he was not then performing a duty imposed on him in his official capacity, so neither was Mr. Smith, who received the information, bound to give any credit to it, unless he choose to do so. 3. As that information was for the United States, and not this state, if that information was attended with loss or injury, the government of the Union alone have a right to complain.
The certifications and proceedings with regard to our own state were in the usual forms of office; no certificates were more particularly set forth or described than others. The New-Loans themselves were specifically ascertainable from the variety of dates in the commencement of interest, which no officer with superficial attention could overlook.—Besides this, one certificate in the subscription of the Comptroller-General was depreciated on the principal, it was not possible to mistake that for any other than a New-Loan; therefore the certification of genuine and assumable being done at the request of individuals, and in no instance of the Comptroller's own subscription, it was a labour without the smallest interest or profit: If then this minute of genuine and assumable, had no sort of influence in the right or question of subscribing them, in what shape can it be criminal? The subscription was in his own name also. Sir, however this may be lightly spoken of, yet to ascertain the motive it is of the first importance: As these certificates were payable to bearer it was in his power to have them subscribed in the name of some unknown person, and his interest in them could not have been discovered; the whole transaction becomes [Page 410] an easy riddle instead of a well concerted plot, this circumstance arose from conscious rectitude of mind, with that fearless independence, which is the noblest associate of honesty and its surest indication.
Another reason: Sir, it is notorious, when the impeachment was brought forward he solicited an immediate trial: it is not the part of conscious wickedness to court enquiry, but to dread and procrastinate it even when it is unavoidable, yes time and delay are the only harbours of guilt! these things may be fetters to the guilty; but they are wings to the innocent, when he was impeached, he flew to met the prosecution. I will not enquire for what purpose that accusation slept in impotent abstraction in the bosom of a numerous committee, till the very close of the session.
Although many months have elapsed since this impeachment was preferred, although the committe of investigation, have used every effort during the recess, after trying by every means to discover official frauds, yet they have been unable to fasten on a single instance of the sort, among the numerous documents and the voluminous records of that department; but they have laid their hands on a solitary fellow-citizen, the dark and doubtful corners of whose memory they have ransacked again and again, with the pleasing hope of discovering the thong that would bind in disgrace an obnoxious transgressor.
I will not pretend to say, that the motive for postponing the investigation was to suspend him during the vacation as a culprit with his lips sealed for the hand of scorn to point his slow and moving finger at. I will not say that it was to rake up the ashes of long-forgotten transactions, in hopes, that while the memory had lost the co-temporary circumstances necessary to explain them, they might by the breath of suspicion and party be invigorated and matured into a crime: But I will say, that whatever be the motives for postponing it, the impulse in the accused in soliciting an immediate trial, could be no other than the impulse of innocence.
[Page 411]Sir, need I mention that such a thing would be against his real and substantial interest; on this ground the gentlemen have placed the corner-stone of this prosecution. Common sense decides that the eventual emolument of this officer can have no operation as a proof of guilt.
It is understood in the first place, that he directly contravened his own interest in cautioning the members of the Legislature when the Act was under consideration. For laying it down as a principle that every man is most strongly inclined to make gain. He was either possessed of these certificates at the time the redemption law passed, and was of opinion that the law would warrant the construction it received, or he had them not at the time, and thought the law would not bear that construction; now, if he was not possessed of them at the time, there was nothing to induce him to purchase them, as he had nothing to lose, and having given his opinion against them, he would have no motive in becoming possessed of them, but a firm belief that the Act would warrant their redemption. If he was possessed of them, or if he was not possessed of them, but only intended to become so, he certainly would not have interposed his opinion at the time, as it might be expected that it would have produced an amendment to the sixth section of the Act, by the introduction of some negative words. In the next place, it is not a difficult task to separate the appearance of truth in this sort of argument from the real fallacy which gives it a direction against the officer now on trial; as it is to be understood that his eventual emolument is contended for, as the strongest proof of guilt; and this is certainly nothing at all.
Let us examine the truth or fallacy of these transactions.
I take it that in the event, interest or speculation might result from either case.
If he corruptly put a decision upon the law, contrary to his real opinion, speculation and interest was his object. But I presume this emolument as we find it, would have followed the construction itself, whether [Page 412] that construction originated in an honest or dishonest motive. In the one case, if he acted from a dishonest motive, speculation was his object, and he acted corruptly. In the other if he acted from an honest motive, speculation was the effect. In the one case he would speculate because he had so decided the law, in the other he would so decide the law, because he had predetermined to speculate; so that the argument of emolument is thus far as broad as it is long; but I apprehend on a closer inspection it will be found against the prosecution and in favor of innocence.
One fact is certain, that a profit has resulted to the officer, it's mother was either honesty or corruption, let it's parentage be decided by natural and fair probabilities; arguing from the effect to the cause. It is a fair rule of justice and common sense, that effects in the natural world shall be attributed to the most probable and the most natural causes, and in moral cases to the most innocent causes. This emolument might result from honest or dishonest causes: In the one case, speculation and emolument is the natural and legitimate effect of a construction fairly and honestly put upon the Act. In the other, it is the corrupt pretext for a construction inconsistent with the opinion of the party using it, and prosecuted at once against honor and honesty. So far are they from proving any thing, that their argument of guilt must be deserted, unless some other strong leading circumstances can be brought forward to its support. Are there any others? No. So far from being able to bring forward any proof to convict the defendant, that all their arguments seem to militate against themselves, and every circumstance adduced by them, seems to favor the cause of innocence.
But these observations might be spared, for how unspeakbly absurd is the argument of interest when placed in contact with some part of the testimony. It has been proved by testimony in profusion, that this officer entertained the same opinion as to the assumability ot these certificates, pending the first loan of Congress, [Page 413] and long before our redemption law passed, as he does now.
Sir, can we believe that it was the hope of interest which supported this officer through those scenes of deception, before the Act, which in fact created it, was in existence? Behold then the gordian knot untied, for the argument of interest to have force must take it for granted, that this officer, while he expressed his opinion unequivocally eighteen months before the Act of April 1792, foresaw nevertheless, that such a law would pass and afford him an occasion of profit; nay, further it must be taken for granted that his coincidence of opinion with the Secretary of the Treasury, and other officers of the state and general, government so long before the time, was a game of hypocrisy, which his cunning induced him to play to conceal the mercenary designs which futurity was to gratify.
Behold then this rope of sand, will this then, bind a victim to the altar? Can we believe that it was the hope of interest which supported this officer through those scenes of deception before the Act had an existence? For if interest was at that moment the embryo motive of his heart; if he could at that distance of time foresee the growing harvest; while he prepared his sickle to partake of it, instead of being arraigned as a culprit he should be deified as a prophet.
Mr. Speaker,
IN a public point of view it is much to be regretted that charges of such serious magnitude and importance, should be thus built upon the slenderest foundation.
It is observed by some parliamentary speakers, I believe (by Chesterfield,) that accusations by impeachment are not so likely to be well founded as presentments by grand juries, for while in the one case political objects and party spirit are most apt to govern the accusers, in the other they are generally governed by the dispassionate and impartial dictates of judgement operating on the weight of evidence. The history of impeachments in [Page 414] England verifies this idea, and confirms its truth, perhaps, Sir, in a more popular government this circumstance and its consequences are the more dangerous.
It augurs not well of the public weal in a free country, where all officers depend directly or remotely on the voice of the people, to find them swept away from the port of confidence by the plea of groundless accusation.
An impeachment is an engine of State as sacred in its nature, as it is delicate in its construction, and nothing but imminent danger will warrant the use of it, the danger of falling a sacrifice to popular indignation, which sometimes even merit has provoked, or to party resentment, of all the resentments the most implacable, will enhance the difficulty of procuring good officers, while it depreciates the incentives to virtuous actions in those who are such; while events are our preceptors, and have taught us, that we should give to government only the same enlightened self interest, which is granted to a good man in the ordinary concerns of human life.
Let then the sword of the people be suspended over the heads of their servants, but let not its descent be so accidental or precarious that like the sword of Dionysius over the head of Damocles, it should be as much the tormentor of the faithful, as the scourge of the unjust.
Sir, the officer now on defence, discards all fear, he provokes no compassion, he solicits no favor, he demands but justice. Here are facts on which he challenges your consciences, and defies your persuasion. Winnow the chaff from the substance and the breath of heaven will dissipate it, so that it cannot be gathered. To construe a law is an act of the understanding, how wide is the difference between intelligence and integrity.
Let then the records of this tribunal, which his accusers had destined to emblazon his disgrace, harmonize with the decrees of time, the great arbiter of reputation; nay, the decrees of that arbiter who is greater than time, and greater than heaven itself.
[Page 415]
SAMUEL DEXTER, jun. Esq Member of Congress from Massachusetts!
Mr. Speaker, and Gentlemen of the Senate,
THIS subject is very complicated in its nature, and my attention hath been much attracted to other objects, and interrupted in the study of this case: So singular were my circumstances that at the first appearance I might reasonably claim an apology. A stranger invited to appear before this respectable body, nay, invited by the honorable House of Representatives of Pennsylvania, to lend his aid to defend their cause, and assert their rights; my obligation was multiplied, when I considered the importance of the honorable House who made the application; conscious as I have been, that I shall not be able to add to the reasoning of the enlightened gentlemen (Messrs. Morgan and Rawle) who preceded me on the same side; perhaps prudence would have induced me to decline; but when called upon by so reputable a Legislature, nay, a stranger solicited to defend the cause of the public, and to redress their wrongs against one of their own citizens, loaded with the wealth and spoils of the commonwealth!
This consideration commanded my exertions and magnanimity; the invitation was too flattering, I could not refuse my aid; I will not waste your time in making prefatory observations, but will endeavor to make the cause now before the honorable Senate very intelligible, and therefore will divide the subject into four points.
1. Has the defendant caused New-Loans to be subscribed, which were not subscribable by law?
2. Has he caused New-Loans to be redeemed, when by law they were not redeemable, and thereby had broken and violated the Constitution of this commonwealth?
3. Has he not appropriated to his own use New-Loan certificates which had been surrendered to the commonwealth by the holders, and should have been cancelled?
[Page 416]4. Has he not done all this knowingly and corruptly to make unjust gain, betraying the interest reposed in him, and traded on the public confidence?
These divisions were necessary before I begin to answer the objections which have been raised against the forms of these articles of impeachment; but no farther advantage can be taken of them, as to their form; they are not deficient either in substance or form—as to forms, two things are only necessary, 1st. They should be clear to be understood. 2d. They should be a comtent plea in discharge of another prosecution for the same offence.
To make objections to mere forms, the reliques of antient times, I say, times of darkness and ignorance, is like the observation respecting the nets and the traps in which he had been caught: The articles are sufficiently definite, and answer all the purposes of justice in trials by impeachment. Mere forms are never attended to in such cases.
Impeachments should be so worded, as to answer two purposes, 1st. They should be definite. 2d. They ought to be substantial as to form: The articles under consideration are sufficiently definite and substantial, to answer these two purposes.
We have been told that the House of Representatives adopted this as a mode of persecuting, rather than prosecuting.
That honorable body does not wish to persecute, the business of the Legislature is primarily the protection of the innocent; the protection of the innocent is of greater importance than the punishment of the guilty; yet it is of some importance to the community when a public defaulter is punished.
A man who is clearly charged with such crimes, it is not unimportant to the public to know how he can acquit himself, and how he hath discharged his trust; although it is irritating to any Legislature to prosecute such an offender as the present defendant.
If zeal in the counsel who have appeared for the [Page 417] Comptroller-General, had been an evidence of innocence, the defendant ought to be acquitted; never had any defendant more brilliant display of rhetoric, or apparition of reason, to prevent his being found guilty, than the Comptroller has had on this present trial.
In my arguments I will consider two things, to wit, the law and the testimony; in the way that I have divied the subject, the different constructions of the Acts of Assembly as they seem to favour or make against the the defendant shall be attended to. The construction of the Act of 1786 relative the the issuing of New-Loans is perhaps doubtful, and unimportant; if the defendant's construction is the true one, what will be the issue? But it will be very material if our construction is the right one, as guilt is charged home and fixt on him; if his construction is right, it by no means acquits him; and it will not ultimately determine the case.
Previously to my entering further into this business, I will consider the causes and motives which produced the Acts. I will not read them, they have been already repeated, no person can be better acquainted with them than the Speaker; it will not be controverted that the Act of 1785 was enacted as a temporary provision for the payment of interests, the Act of 1786 was passed on the failure of the Act of 1785 for the same persons and had the same general object in view, and brought the Act of 1785 into execution.
I can see no reason why the Legislature in 1786 should make that perpetual, which in 1785 was temporary. There is neither reason nor equity for it; if equity did not require it, there was no reason to grant it. This is prostrating the principles of justice; the Legislature would not unnecessarily encrease its own burthen.
The Gentleman's reasoning, who opened the defence is somewhat singular; he says it became "an equitable claim," so far I agree with the Gentleman. But, Sir, will the gentleman go on, and say, that the contract was not as great to the inhabitants of all the other States who have been creditors of the Union, more equity [Page 418] was not due to the creditors citizens of Pennsylvania, than to the creditor citizens of other States; if the premises are admitted, the consequences can't be avoided.
Equity is not partial and would embrace the whole, this is clear reasoning, he cannot deny it.
The Act of March 1786 did not, at all events, pledge the public faith for the redemption of those certificates in money; if then it is viewed in this light, why did the State receive the Continental certificates and give their own certificates in lieu of them? The object of the Legislature was to make a substitute. If Pennsylvania did not take the certificates, and was to pay, she might do it at her loss, as she could have no claim on Congress. This is confirmed from general opinion, and their subsequent views.
If the Treasurer had paid off the Continental certificates they could not issue the New-Loans; and for this purpose Pennsylvania chose to take in the old Continental certificates and issue new ones, so that the commonwealth might at her option be the creditor of the Union, or debtor to her own citizens, by returning them to the original holders; in the mean time to settle and pay the interest was the intention of the Legislature: It is manifest, and confirmed by the opinion of every persen conversant in the transactions of the Assembly, and by the public Acts.
One circumstance of great importance is to be attended to; that is, the margin of the New-Loans and the reference to the Continental certificates; this provides how the debts were to be secured, and the memorandums made in the same.—(Here he read a New-Loan certificate.)
This margin was of no consequence unless they wished to return the New-Loans. We here look for the intention of the Legislature, and not for the negligence of the executive officer. Was it of consequence to pay in cash at all events, full interest on depreciated principal? this was not sufficient for it might have been settled at the issuing, why not at the time reduce the [Page 419] certificate and give the whole amount when reduced by the scale. If a purchase, it was worth just as much as the value of the certificate's nominal amount of principal and interest.
Another reason and a better one than the construction of the law, is the intention of the Legislature,
The preamble of the Act of March 27 1789, calls it a temporary provision, look into the preamble of that Act, is a Legislative construction important, relying on the margin and memorandum in it, does all this weigh nothing?
Was it maneuvre in the Legislature? it is too disrespectful, too indelicate to suppose, out of the whole I find that the Act of 86 took the certificates into the custody of the state and that they were only to pay the interest; if otherwise they would have found a fund to provide for the payment of the principal, they knew at that time the funds were precariously in their hands, if so, it would perhaps be wrong to contend that nothing more was intended than a re-exchange by the Act of 1786. Therefore the law of 1789 repealed nothing; but carried the Act of 1786 into effect.
The construction of the law of 1786 is much more certain and important. If we chuse to take back our certificate at any time, we shall have a right so to do, to do away these they enacted the repealing law of 1789. The question now is not whether the law is right or wrong, but what was the intention of the Legislature. If the law was right, it does away most of the difficulty, the Act of 89 is an Act of much importance, of clear and certain construction, let us enquire what was the intention of the Legislature, not whether it was constitutional or not, the law is right or wrong only as the Legislature intended. After we shall discover the intention we'll enquire if open under the Constitution, and whether obligatory as a law is another question.
The construction of the defendant is so contradictory, so distorted, the English language can hardly find a definitive idea to correspond with it, he hardly knows [Page 420] what answer to make, every thing he advances is directly opposite to what is mentioned in the Act, so obstinate is every part of it in favour of the prosecution; and he is obliged to run counter to every expression in the law; if the Act of 1789 designed only to unfund the debt, it is equally unjust with destroying it, it is different not in principle but in degree. If it is so, for what reason: It is alledged they could not destroy the claim, is it not equally a breach of contract to unfund as to destroy it, truly equal; why unfund the principal that was never funded if the reasoning of the Gentlemen be right, they should have followed wherever it led them; was it not equally so to subtract the fund? What did the law of 89 do? They say it had no effect, it neither destroyed nor annihilated the operations of the former Acts, yet the defendant must admit that the state committed a fraud in unfunding the debt, the provision was repealed, yet they say it was altogether compatible with the law of 1786.
If the alienation of the funds to the General Government had been the reason, was not that surrender to be perpetual? Did they expect a return of the funds? If they were to pay the interest, why not the principal? Where were the funds? Where was the debt? It either proves too much, or it proves nothing at all; it embraces both principal and interest, or only principal, and excludes the interest. If this is not broad enough for them, consider only for a moment the intention of the Legislature in passing the Act.
The declaration in the Act of 1789, proves they intended in 1786 to make a temporary provision.
Could the Legislature labour a preamble declaring their intention, if they did not mean to carry that intention into effect?
The Legislature expresly says, the payment of the said debts ought to be from the Treasury of the United States, and not from Pennsylvania. A construction in the Act of 1786, to abolish the same Act, if there is no reason for doing away the Act of 1786, why labour [Page 421] three or four pages; to do what they did not intend to do.
Yet if the preamble is read, no man will doubt that they did intend to repeal the law, and possessed the right to do so; look further into it, you'll find the the words "certificates" "reasonable," &c. there.
In fine, that the debts, not interest, is to be paid by Congress; there is another construction of the Act of 1789, almost too ingenuous to be admitted and not easily understood, operating not on what is done under the Act.
In the case of the North-Carolina certificates there was no Act to repeal, as the certificates had issued fraudulently.
It is a contradiction in reasoning and almost in terms, do they provide that the principal shall be paid by the State of Pennsylvania? Perhaps the Gentlemen would have found no Act to destroy, when they were not issued by any Act. This long Act of 1789 was not made for nothing, the Act of 1786 was completed in 1788. Therefore the Legislature in repealing the Act, meant to knock away the foundation on which they stood.
Here the construction is too artificial to be credible, the defence is at war with itself. First, that it did operate on the certificates, 2dly, It did not operate. This is an invariable rule of all laws, that all parts should be construed so as to stand and no part perish.
The defendant's construction is too fine spun to be strong, it breaks asunder, by another it is held different still, it is so various that there arise three contradictory modes, but truth is simple and uniform, there are various accounts, all simple and consistent, if these are true, they are all the creatures of fancy; they could not repeal the first and second sections of that Act, and therefore could not provide for the payment▪ these are invisible entities of reasoning, we need a microscope to aid our intellectual optics to see them. The Assembly could not intend what they could not understand, where is the law which directs payment? It proves the reverse [Page 422] of what was intended, this is the reasoning the defendant is driven to, if the law proves it, they will avail themselves of it, for my part I can't think it was the intention of the Legislature, the majority never spun thus finely this creature of metaphysics by the Act of 1789.
Can a man have an intention to do what he does not understand? the exchange being optional does not serve the defendant, it conforms to our statement. The option to re-exchange is no objection to our construction, "Many may be desirous," it is therefore true, that it is optional with the holders, it is therefore consistent with my explanation, and perfectly consistent in itself. Take the whole amount together, it is equity, it is justice. We make our option, which is no more than this; come and take your original certificates, we were never bound to pay you in cash, you may come and take them if you please; it was not necessary to make a law to compel them to take their certificates: It was only this, that if they did not come the obligation on the part of the commonwealth was done away, we are not obliged to pay cash, we will not pay cash, we will perform our contract, you may have your certificates, they were never demandable in cash, they were never a claim for cash, they were a claim for the original certificates for which they were exchanged, they are no claim against the government.
That subsequent laws called them a claim it is true. They were a claim for certificates, the defendant's object was to shew a law to justify him; but this reasoning proves there is none, the first section did not provide or payment, and the subsequent ones were repealed. That these New-Loans were contemplated as claims or receipts is undoubtedly true, if we would deny this, we should commit an outrage against common sense; this is corroborated by the maxim, that we are not to create a being to be destroyed, they knew such positions were not supportable: Much reasoning and paper might have been spared: If our construction is the right one, they were a claim for the original certificates; one of the [Page 423] Gentlemen says, that the providing to pay in certificates is a confession that they were a claim for cash; they were a claim, that claim was merely for re-exchange; but not for cash.
The provision for exchange is no acknowledgment of debt. Another reason must meet us very forcibly, that the law of 1789 is void, as being against the constitution of the United States, and impairing the validity of contracts; it is not so, if our construction of the law of 1786 is right.
But let us suppose for a moment (being willing to put it in every possible point of view) that we are wrong, that it was an engagement at all events to pay cash, this is taking the highest possible ground contended for.
I do not mean what is contended for on the other side, for it appears a little singular, that the constitution of the United States should herein impair the obligation of contracts. If the Act of 1786 had made an absolute debt, it's repeal would not be contrary to the constitution, the section only means that a state should not establish iniquity by law.
It was a mere act of favour by the State, or else it might be understood that the state made laws, for carrying into effect the breach of contracts. Take your New-Loans for the Continental certificates. If it means more than this, it must be that the very letter and terms of the contract should be carried into effect; if so, a State could not establish a chancery jurisdiction, which says, penalties shall not always be exacted.
Nor statutes of limitations, a thousand pounds payable on demand, is as justly due after four years as before; the four years expire, and the contract is not performed; yet it is a bar pleadable and no injustice.
Let us advert to the statutes against usury, giving damages instead of compelling a specific performance, and a contract to pay 12 per cent. if it were not for the law would be a contract; the law says it shall be no contract. Is this impairing the obligation of contract? [Page 424] this compels a person to receive what he did not contract for; are these against the constitution of the United States? where justice is done the contract is answered.
If the construction of the law must be literal, giving damages for specific articles, such as to deliver lands instead of cash, must also be a breach of contract: the specific article should be given, the Act of 1789 now under consideration, says take your certificates instead of cash; these observations are all unnecessary, because they go on the foundation that all New-Loans are payable in cash.
But to give the Gentlemen every thing they want, admit for a moment that we're wrong, this contract is unfair, suppose it is impaired, another question arises, who is to say it is impairing the contract, where is the proper judicature? Who is to be the arbiter between the State and her own citizens? This is a serious consideration; Montesque, Locke and other writers will oppose them here, the power of making laws is the supreme power of the State, is there a power superior to the supreme power? If the judges have this power, it follows that the supreme power is controlled by an inferior power. If courts cannot, the Senate cannot, both as a court and a part only of the Legislature.
This is a very important question, there should be some important judiciary, it is a complex question, the constitution is silent on the subject. We must arrive at some period, let us proceed to the end of the chain, another Legislature to judge the former, another to rejudge the latter, and so on to infinity.
Can the Senate rejudge it, being only one branch? the Legislature of the State has the supreme power, can any individual enjoy it? shall we leave it to a jury to determine? they judge of facts, this is uncertainty, and contradiction, shall every petty officer arraign his master? shall any man vainly imagine that he is wiser than his representatives? language of this kind hath been held, [Page 425] nay, hath been pratised. This is rising against the organization of society.
If he decided wrong, he decided at his peril; here it is contended is the check, the judiciary are to judge; but this brings us back again, the judiciary in that instance would sit above the Legislature, the people only are superior to the Legislature, the Legislature is amenable in their representative capacity to the people, but shall a jury judge? Do juries represent the commonwealth? They are not the Representatives of the people, their office is to judge of facts and evidence, not to judge of the constitutionality of laws. If they are to be the ultimate criterion, it is void to day, because a jury said so, it will be in force to-morrow, if a jury shall say so.
There is a sufficient check on the Representatives, it is this, they are amenable to their constituents, their sessions being only temporary, their doings may be repealed until then it is a law; they may repeal a law orderly by subsequent representations—No power on earth can exist superior to the Legislature of the State, except what exists in the People, it does not exist in the Judiciary, not in the Senate, nor in Juries. They will, if they disapprove, choose others who will repeal obnoxious laws. If they mis-judge, they are corrupt; they will again choose others; the power is less dangerous here, if they refuse, the People may recur to their original state, dissolve the social compact, untie the knot, and redress every mistake. Here is an evil but a less one; this free agency in man, this torpid debility, this "vis inertiae;" the former is the fever, the latter the death of patriotism.
I have been the more particular in this instance, as there are two important points to be considered, that if these certificates were not subscribable, they were not redeemable, although the reverse of the position is not true; if the servant is to judge of what his master does, then the defendant is to adjudicate between the State and the holders, there is no situation so unfit at his to [Page 426] decide; the Comptroller assumes a right to adjudicate, he buys up all the New-Loans, places himself in the shoes of one of the parties, and then determines he is to be paid; this is the ground on which this judge stood on this question between the State and the People.
But still disposed to suppose every thing credible; let them suppose us still wrong; there are yet ample grounds for the conviction of the defendant, if they still existed in the form of debts, they were not subscribable debts and payable in cash, it was said that these were, by virtue of the Act of Congress, subscribable; situated as these certificates were, it was out of the power of Congress to take them, and to charge Pennsylvania with their amount in adjusting the settlement between the United and Individual States: The provision was only for such as the State acknowledged to be debts payable in cash.
They were only acknowledgments of debt. The Secretary of the Treasury so understood them, we will go on broader ground than this, and say, if they intended to pay such, it would be completely out of their power. The State held the Continental certificates; Congress could not say, we will not pay the State, but pay the holders of New-Loans. The Act of 1789 declares the dissent of the State.
It is true Pennsylvania owes A. because he holds New-Loan certificates, and the Union owes Pennsylvania, because she holds original certificates. It will not be contended that Congress designed to pay both; then could Congress pay the holders of New-Loan certificates without the consent of Pennsylvania, and pay the State too?
The subscribing New-Loans implies they were not to be exchanged, and makes the State a creditor by virtue of having the Continental, without the consent of Pennsylvania, Congress could not assume the New-Loans and refuse the payment of the Continental.
Congress must previously authorise a power to determine the New-Loans to be a debt, before they could [Page 427] assume them. This would amount, to decide a case between a State and her own citizens.
The Supreme Court refused to decide it. The Secretary of the Treasury never would decide this, if it was to be decided by its nature, none are competent but the people, who might recur to original principles.
Congress could therefore make no such provision, if this is true, the New-Loan certificates were not subscribable to the loan of the United States.
Thus, I have been willing to descend, step by step, from that ground on which the prosecution rested, to prove the charge against the Comp. Gen. is well founded, and his defence not maintainable. I will descend one step lower, and admit that the New-Loans are assumable, yet the defendant is guilty in the true sense of the articles of impeachment, and upon every principle of justice, although no gentleman will agree that Congress, the Secretary of the Treasury, or any other person had a right to decide on their assumability.
It was the interest of Pennsylvania that the Act of 1789 should be complied with. They viewed themselves bound to pay 20s. in the pound. This business was committed to the Comptroller-General, and he had the care of making the bargain. Is it just in him to take measures to defeat this trust? It was his business to promote it; he opposed it.
Has he not taken every dollar from the Treasury, which he has put into his pocket, and this after the bargain was completed? She committed the management of this transaction to her agent, the holders of New-Loans were to apply to him for re-exchanges, he was the agent, nay, call it more, the commonwealth made the offer, and appointed Mr. Nicholson to compleat the re-exchange. Is this faithfulness in an agent? Did he fulfil his trust? Does not this look like perfidy? Did he take pains to procure exchanges? When persons offered to exchange and surrender, did he not prevent that exchange? Did he not after they were lodged in his hand as agent, and Comptroller-General, purchase [Page 428] and put them as Mr. Nicholson into his pocket? And if they had been so exchanged, could they have been redeemed? After the parties had agreed to take the offer of the State from this officer entrusted to make such bargain, and by which the State would gain the difference in the exchange; he clearly had no equity to put this difference into his own pocket. After the parties had consented to carry the exchange into effect, he refused to deliver the Continental certificates, he sent a line offering to take and buy them himself; nay, he actually purchased them, after which he subscribed them to the loan of the United States, and procured their redemption at the State-Treasury; so that all construction is out of the question.
I ask, if guilt is not irresistably proved on Mr. Nicholson? Perhaps much less than this would be criminal. Whenever a person was willing to sell a certificate, every such person willing to exchange his property, but was prevented by Mr. Nicholson, even in the streets, by which exchange it would be the property of the State, but had been not only put into the pocket of the Comptroller, but taken out of the Treasury of Pennsylvania.
It is a little singular that the ground on which the defendant rests his defence, is by doing equity in opposition to law, and being anxious to defeat the views of the Legislature, that equity should be done to the holders of New-Loans, by procuring for them 20ʃ. per pound; instead of this equity, we find Mr. Nicholson chose to make a bargain, and to take this equity from them, and the means of doing it in like manner is wrested from them, lest the State should take it. This is crushing equity to death; this aggravates the charges, to deprive them of 20ʃ. in the pound, law or no law. If Mr. Nicholson knew it, it was unjust, he defrauded the State or the party; where he took this equity from the State, he defrauded the public, when from the holders he defrauded the holders. Where then is this equity?
[Page 429]It hath been stated, but not much relied on, that the abstract of Mr. Nicholson was not certified, genuine and assumable. This is a mere quibble of words, this is the Pharisee in judgment. We are here to do justice, an offence is committed, he is guilty, if the evidence is sufficient to support the charges, the essence is not in writing a word, and adding I. N. at the bottom, a deceit had been practised, the crime was not in the certificate, but in the deceit, the State was defrauded, the deceit is proved if the evidence is sufficient to support it; his abstract was in his own hand writing, he deceived the officer who called for the certificate, he deprived the commonwealth of the money which he pocketed at her expence. The substance of the charge is literally true, and the same is proved and supported.
It is charged that he certified a number of New-Loan certificates to be subscribable, the same is literally true.
The charge is proved, because he certified others, and that is equal to certifying his own. I will dismiss this subject without any further animadversion on this aggravating species of criminality, trusting that when the Senate shall pronounce him guilty, they shall render that justice to their country which is their duty to do. Adjourned to 4 o'clock this afternoon.
In the minutes of the House of Representatives the following entry is recorded—
"In conformity to the resolutions of the 25th day of February last, the House resolved itself into a committee of the whole, in order to attend the trial of John Nicholson, Comptroller-General.
"The Speaker quitted the chair and Mr. Wynkoop was placed therein.
"The committee of the whole then proceeded to the Senate-chamber for that purpose.
"After some time,
"The committee of the whole returned to their own chamber.
"The Chairman left the chair, and the Speaker resumed it.
[Page 430]"The Chairman then informed the House that the committee of the whole had attended the trial of John Nicholson, Comptroller-General.
"The committee appointed to manage the trial of the articles of impeachment against John Nicholson, Comptroller-General, reported further progress, and that the Senate would proceed in the further hearing of the counsel at four o'clock this afternoon."
Same day, 4 o'clock. P. M.
THE Senate met, having adjourned the Legislative business for the purpose of sitting in their judicial capacity. The House of Representatives also attending.
Mr. DEXTER,
Rose and said,
I endeavoured in the forenoon to prove my first position, that the Comptroller-General caused New-Loans to be subscribed, which were not subscribable by law.
The Act of March 1789 shews the Legislature did not mean to unfund the debt, as the principal never was provided for, therefore it was unnecessary to repeal what never was enacted.
It is contended by the counsel for the defendant that the interest only on the New-Loans was attended to, and considered. If the interest was only to be paid, why introduce the word principal, which was never funded at all? We will now attend to our second division, which is, That he caused New-Loans to be redeemed, when by law they were not redeemable, and thereby had broken and violated the Constitution of this commonwealth.
That he caused New-Loans to be redeemed, that he certified them to be so, and that that certificate was given, officially, will not be controverted. That this fiscal arrangement by his certifications, had the effect of [Page 431] drawing the money out of the Treasury of Pennsylvania, will not be denied.
The question is, Whether there was, or was not a law:
The Act of the 10th April 1792, is much relied on, to justify him. (Here Mr. Dexter read a part of that Act.
It is agreed that the second section is not extensive enough to cover New-Loans, and for the payment, redemption and discharge of all the certificates of that description.
It is agreed that interest is not payable on New-Loans, as it is conceded that this expression does not cover New-Loans, and as no interest was payable on them, it is contended that in a part of the 6th section they are included, assuming the New-Loans as subscribable, New-Loans are not mentioned, and yet they are subscribable, and if subscribable, they must be redeemable, because subscribable certificates are to be paid; but all the state and continental officers agree they are not subscribable, and consequently not redeemable. (He then read the 6th section). "The holder of a certificate or certificates, subscribable to the subscription," &c. If they are not subscribable, it cannot be within the purview of this act, it is well understood from the complexion of the law, that whatever is not subscribable cannot be redeemable, and whatever is not subscribable nor redeemable, cannot be included in this section. Whatever might have once been the opinion of the Comptroller-General, it is evident it never was the opinion of the law officers of the state of Pennsylvania, nor of the Attorney-General of the United States. (Here Mr. Dexter wanted to lay his hands on the letter of Mr. Randolph, page 81-2, but could not find it) and he added, We need not recur to the unanimous opinion of the officers, the laws are here, the Senate understand them, and will judge; that paper ought to have been here; if the certificates are not redeemable, then all the reasoning of the gentlemen will fall to the ground, because they are not subscribable to the loan opened by Congress.
Admit that the New-Loans were subscribable, still [Page 432] they are not redeemable. The gentleman who opened the defence, agreed that the fund had not been provided for the redemption of New-Loans by the 6th section, but by the 2d. (Mr. Tilghman observed, The gentleman did not attend to my statement. The sixth section is more extensive than the second. The fund by the sale of 3 per cent. stock, was not to cover New-Loans.)
Taking this to be true, the object of the defendant is not obtained, and it is clear no New-Loans are redeemable; but recourse must be had to another fund, nay, the fund for claims and improvements they say, covers it; the defendant's warrant and certificate, prove the contrary; these are raw troops pressed into his service; this is a strange departure of the Comptroller-General's plan of defence; his counsel shift their ground. The Comptroller-General committed the fact, and retained counsel to find other laws for it, but those laws are confessed to be of no use. It is said New-Loan certificates were a debt by the Act of 1786. Could the Act of 1792 make them more than a debt? But the Comptroller being determined to get a fund to draw his money from, and finding he could not succeed in drawing his cash by virtue of that law of 1792, changed his opinion, and his counsel procured him another fund. (Here Mr. Dexter said, If I am not right, they will put me right. Mr. Lewis said, You're wrong this long time, but go on.) The funds for claims and improvements should be made use of; this was done by the Act of 1791. This is too remote for discussion, fixed by its history raised per Act of 1789, and limited to £. 10,000 for claims and improvements. (Here Mr. Bradford interrupted Mr. Dexter, and said, The Act of April 7th, 1791, created the fund, and did not limit it.) This fund without any particular appropriation only to provide for claims and improvements, and without any provision for minute occasions or any occurrence which may happen during the recess of the Legislature; why is this called up? it is a confession of distrust, it is peeping out of the window.
[Page 433]Let us take the useless Act of 1792 out of the question; the Act of 1786 and 1791 are sufficient for the defendant.
The New-Loans are said to be a claim, therefore it is said to be within the act of 7th April 1791, are not unfunded depreciated debt equally within it? There are no debts but are claims, if they existed at the time of creating the fund, they are all included in the fund for claims and improvements. These were for objects too various and minute for legislation: this transaction must be unconstitutional; if thus general, why not a little zeal in the defendant? By the law of 1789 the defendant acquired wealth, and gained money.
It is argued that the act of 1789, stopped interest on New-Loans, notwithstanding, by this means the Comptroller-General got interest. The gentlemen will not contend, that New-Loans are one of the objects.
When any money was drawn out of the Treasury, the fund was particularly mentioned, that such a warrant or claim was payable out of such or such a fund; therefore it especially behoves the defendant to shew out of what fund, the money was to be drawn to satisfie his demand. This act goes to shew what shall be paid out of the claim found by the act of April 7th 1791. This general clause covers all warrants hereafter to be drawn by virtue of any law or laws, &c. Was this a claim provided for? It is clear there was no appropriation; consequently the Constitution was broken. This sweeping clause (6th section) cannot cover so important a demand: By the law of 1786, the New-Loans are a debt in some shape or other; by the law of 1789, they were made no longer payable in cash, it was agreed that the interest was not to be paid in cash; the principal was never funded. This is a blind general clause, altogether incapable of altering the conditions of the New-Loans.
That the principal and interest of the New-Loans should be paid, but still I misunderstand them▪ or they are mistaken, in saying that the Act of 1786 created a debt. The interest is not funded by the law of 1789. [Page 434] If an appropriation to pay by the law of 1789, why introduce it by the Act of 1792? If the Act of April 1791 provides for it, and a fund competent for its discharge, why is the Act of 1792 sought for to make it more than a debt? This is calling in a law, which gives it no additional strength, their own consciousness betrays their faithfulness to their client, they are convinced that their proof is not sufficient to support them; this is manifest, though not expressed by them, it would be prudent in them to close the door of secrecy on this distrust. Nothing can be done by the law of 1792 if they are right in their construction of the Acts of 1786 or 1789.
It will not be contended that the Act of 1792 made the New-Loans a debt. If the law of 1792 is useless, take it out of the question; having taken it out, you apply for payment by the law of 1791.
If right in this reasoning, it will be admitted there was no fund, and consequently no appropriation; and therefore the second charge is fully proved, and the Constitution of the commonwealth was broken by the Comptroller-General.
That there was an appropriation by the law of 1792, for the redemption of debts, is evident from the second section. What is the Comptroller-General's language? He says, although the Legislature say by the Act of 1789 that these certificates are no debts, yet he says, A. B. C. are creditors of the commonwealth by the Act of 1792. I know the state owes these people, I will determine, I will take the money, I will pay it to the holders of New-Loans, I will go further, I will purchase this equitable claim myself, having the power, although the agent of the government, I will purchase it from the holders by virtue of my official authority, and retain the money by virtue of the Act of 1792.
Is this the language of a faithful agent? On what principles of equity is this justified? Is this justice to the New-Loan holders? I will no longer detain you on this second division.
[Page 435]I am now come to the third general question, that is, Has he not appropriated to his own use, New-Loan certificates which had been surrendered to the commonwealth by the holders; and should have been cancelled?
That the Comptroller-General, as trustee of the commonwealth, had done this, will not be doubted; our evidence however on this point is not now as compleat as it may be, we expect the testimony of Hans Hamilton; but there are other evidences, Biddle and Oldden, by whose testimony the same imputation is fixed on the conduct of the Comptroller-General.
The testimony of both are similar, both applied to Mr. Nicholson to exchange, both brought the New-Loan certificates to be exchanged, one of them filled up a blank exchange, they manifested their consent to re-exchange, no expectation ever to receive back their New-Loans again, this is a strong evidence of their intention to re-exchange, these were by all principles of justice surrendered to the commonwealth, and ought to have been cancelled; the property was shifted from the holders to the State, for the express purpose of being destroyed, if he should have delivered the certificates to the original holders, it would be perfidy in the agent.
We are told with confidence, that "the charge is a mill-stone, the evidence as light as a feather." They are much mistaken in the merits of this controversy; the property was not in the original holders as soon as the proprietor reached it to the agent of the commonwealth, the same was completely shifted from the original holders, not a doubt can remain of their being liable for the holder's debts.
It will not be contended that if two parties agree to exchange commodities, and they agree on all the terms, the bargain is completed. One says, here, take my goods, I will call to-morrow and receive my articles. The property is shifted. If these general principles are established and admitted, if the case before the Senate be an exception to such general principles, it becomes their duty to shew it. This is not a bold assertion, [Page 436] but authority which is acquiesced in; the agent was ready, the holder was ready, the party brought the certificates to the agent, the exchange was proposed to the Comptroller, the agent had possession, it was in the custody of the commonwealth, an express agreement, "give me the original certificates"—nay, more, the exchange is made in writing. I will call to-morrow or when you can look up the original certificates. If this was not a contract for New-Loan certificates, the government had no original right to issue them.
The holder had a claim on the State for the amount of his certificates, and no dealer in the market would doubt, but he had parted with his property.
What right, then, had the Comptroller General to make proposals for certificates thus deposited and disposed of; and to appropriate them to his own use? The fact is, there was delay. The Senate will judge of the intention of the officer by the application: The certificates being thus deposited, the bargain was completed; he purchased them from men who held the property, not the property of Mr. Nicholson, but the property of the state of Pennsylvania; and to give a reason why he did so, he produces neither reason nor authority for his acting in this manner.
But there is another case still stronger than that of Oldden's or Biddle's; and that is the certificate of Blair M'Clenachan.
It is true the matter is not perspicuous enough, but it is true enough to satisfy certain facts, to wit:
It appears Blair M'Clenachan held such a certificate, he never sold to Mr. John Nicholson it is true, he sold to others; 'tis also true, and possible, Mr. Nicholson might have bought from others; if a fact, it is capable of proof—and the weight of that proof rests on the Comptroller-General.
It is incumbent on him to shew how he came by it; he has subscribed it, it is his duty to point out how he became possessed of it, we have paid it, it is similar to stolen goods found on a person, he must account how [Page 437] he came by them; this may be said to be less hard on Mr. Nicholson than on a felon, or on a common vagabond, who knows nothing of accounts; this is not the case with Mr. Nicholson, he is a person of information, of books, and of accounts, knows with whom he deals, and keeps a diary to assist his memory. (Mr. Lewis gave him here a loud hoarse laugh, for talkin [...] ▪ of diaries, when none of them would be admitted as testimony.) Why! he says so—he began to keep a diary in March 1792.
It is a fact that he had this certificate, the amount of which is £.3275:19:4, he can trace a transaction of so much importance, the name cannot be lost in the mere hurry of business, if the person exists upon earth, Mr. Nicholson can and ought to produce him; in some instances it is usual to give a bill of sale of such certificates.
And further, Mr. Nicholson is in possession of books and official documents, if it is not exchanged, where are the Continental certificates for which this was issued.
Can the defendant shew them? Let him turn to his books and shew them; will not the books be sufficient to clear up this point? and to shew the amount on hand and not delivered out, or how he has accounted for them, if the books are kept as they ought to have been, it must appear from some of those official documents in the possession of the defendant, if no other answer can be procured, but that he is not bound to prove it, it is in vain to make any enquiry into the conduct of a public officer.
If the certificate had been consolidated *, still it is in his power to shew this by his books †. Finally, if we are to prove the charge, what other evidence can we produce, or can be expected of us? We have proved the facts, the defendant must prove his mistake. It is his duty to shew, when and where he purchased it, and what became of the counter parts: But if he does not, the charge is proved upon him, and the evidence is strong and irresistible.
[Page 438]I am now come to the fourth general question, to wit: Has not the Comptroller-General done all this, knowingly and corruptly, to make unjust gain, betraying the trust reposed in him, and traded on the public confidence?
Having proved the facts which were breaches of laws, it is incumbent on the defendant to prove he is innocent, that it was done through mistake and innocently, that he acted with an honest intention, and that this killing was not maliciously done; if the Comptroller will not prove this, there is no doubt of his knowledge and criminal intentions. Can any doubts exist of what a man tells us in the public records, after the labour of many days, should he say that he did not know it?
In these records he has explicitly shewn the true construction of those laws, his statement in 1790 is conclusive, (here Mr. Dexter read the minutes of 1790, page 389) that the New-Loans amounted to a certain sum, which were claims against the State, but by the Act of 1789 were excluded from redemption. (The whole being taken, it reads, "redemption" by the Land-office.)
These claims were only claims for certificates (page 395, same date) by the Act of March 178 they were excluded from the Land-office, in the same page are most material passages, but for what purpose? They were claims not for money at as early a date as December 1790. I have urged this confession as a reason, and a number of circumstances strongly apply to confirm that this was the true construction, that the Comptroller-General and the other officers of government concurred in the same opinion, that New-Loan certificates were not subscribable to the loan of the United States.
It is said the Secretary of the Treasury was of that opinion, when he was better informed, he renounced his former opinion. The consideration of the two Acts of 1786 and 1789, together with the consideration of the Constitution of the United States, never came before him for decision in a "prominent point of view."
The Comptroller-General was not mistaken in his [Page 439] views. Is he to shelter himself under the opinion of the Secretary of the Treasury? After his partial information to that officer, the Act of 1786 had been submitted by him to Hamilton, the Act of 1789 had been retained, he knew it, and stated in his reports the debt as a claim against Pennsylvania as they operated in the way.
Here is an important question, the Comptroller secrets the Act of 1789, is this opinion a proof of innocent intentions? it proves the reverse.
The Register-General never knew that any New-Loans were subscribed, until Mr. Nicholson had got his money; he went to Mr. Smith's office in a surprise, a circumstance so singular, to know whether it was true or not.
It is also true, that the Comptroller-General did not know what was the opinion of the Register-General; a conversation took place, same time went to Smith's office. The Register gives his reasons, namely, because he thought it would be to the interest of the State. Therefore he gave it in the integrity of his heart.
Mr. Addison and some other respectable gentlemen are named, as having subscribed New-Loans. I doubt this to be evidence in the present case. Was not the opinion of Mr. Addison founded on the opinion of the Comptroller-General? Did not the Comptroller broach it? Mr. Nicholson suffered others to act to keep himself in countenance. Is that opinion sufficient excuse? Had it ever been the same before? No, until the Comptroller rendered it fashionable, there is no evidence of any person entertaining such an opinion before the Comptroller-General, who should have saved to the State the wealth that he is now possessed of. This opinion would never have been thought of if the Comptroller had not broached it. All the holders would have re-exchanged their certificates if he had not defeated the views of the Legislature.
It is said, others determined to purchase New-Loans before Mr. Nicholson. The opinion of Mr. Nicholson formed [Page 440] them; some determined before, others determined after. Where is the public officer who has not determined the reverse? They ought to be convinced, as they had been when they had the same opportunity.
It is said the defendant had long before the Act of 1792 the same opinion; it is a mistake, his report made in 1790 clearly proves the contrary, he conceived the design that the New-Loans were a claim, not a claim for certificates, but a claim for cash.
His opposition to the law of 1792 has been much relied on, much credit hath been taken for the secret sources of wealth contained in his plan of finance from pure and disinterested motives. Why did he oppose it? Does it prove his innocence? The Comptroller opposed it; because it would subject the State to the payment of some debts, which the commonwealth ought not to pay. Does not this shew a consciousness? Does not this prove that he knew New-Loans were not redeemable either legally or equitably.
It shews covetousness; to suffer them to be re-exchanged might include an imprudent proceeding. Was he not bound to take no advantage of their imprudence? And he was not bound to uncover their nakedness. This he thought right, and puts the difference into his own pocket; all this under the colour of law. By these principles he took the advantage of the holders with an ill grace. All this is a plan proof of conviction, converting every thing to his private gain. It is possible, nay, it is probable that he conceived the design of opposing the Act of 10th April 1792, from pure motives, for what reason? We say they were afterwards corrupt. There are other parts of the evidence which demonstrate the guilt of the defendant.
The statement of the Comptroller, that New-Loans were excluded in the provisions for claims and improvement, is a proof in point; it cannot be pretended that they are in the law of 1792, it is confessed not to be in the second section, it is said to be in the sixth. Pure motives these! When this officer wanted an engine because [Page 441] the word "subscribable" can be found in that section.
The complete secrecy is a strong proof of his guilt, bound to communicate with the other officers, which he declined until he actually obtained possession of the money. If the opinion of the Comptroller was known for so many years, why secrecy so many years? He did not receive money to pay it back again, he carried his plan into execution before the Governor, a faithful officer took measures to stop it, the Register was checked in the progress. This is the conduct of Mr. Nicholson. This is the meaning of the articles. On all that came before the House, I do not see a clause by which I can be able to find those signs of innocency, he was the officer of the public, he was paid for his services, he was not to sacrifice their interest to his own private gain; his whole course is a sacrifice of duty to gain: he pursued it with a step as steady as time. We have seen the conduct, we have traced the motives of the Comptroller-General; let us take an extensive view, let us compare them with the general principles of faithfulness and honour. As an Executive officer, he was an hand to fulfil the volitions of the public, the Legislature's will was his duty. If we find him going forward in other principles of gain, they are base. Is this faithfulness, fairness and honour, in a country like ours, where the government lives on public confidence? They are shaken by every breath, if they are not equipoised, the nice balance is easily displaced. By this means the corruptions of European politics will destroy our constitution, and false constructions will overwhelm our own politics, and sacrifice the principles on which we built our Republic.
Of all the parts the public revenue ought to be most closely watched; revenue is food which in a diseased state is humour and disease, and becomes the food of corruption. No jealousy is too great to check unbounded power; no jealousy too great to watch unlimited [Page 442] confidence, in equal systems purity and severity are necessary,
We have been told that great patriots have been sacrificed to popular fury, through clamour and prejudice. Is this an argument against convicting the defendant! Where is the clamour, where is the public resentment? The influence of the respondent is great, more danger of impunity, he has many friends. No comparison between the Republics of antient times and our own, the representation here is judicious, their laws were indefinite; no more similarity between America and Greece, than there is between their patriots and the respondent. They knew nothing of representations, they knew nothing of the divisions of power, they did not decide by fixed laws, passion was their only principle.
Hence an unjust acquittal is perfidy to the public. I know the Senate have too much understanding to leave their post; the proof is competent to authorise a plenary conviction; if the opinion of the Senate should be different, the Comptroller will not be punished for mal-conduct, the community will be defrauded, the day of acquittal will be forgotten, it will be establishing a reward for crimes, in future no responsibility will be expected, this will be opening the flood-gates of corruption; but consider, they ought to know that you are above them; they will then do justice, as it is expected the Senate will in this case do justice to the commonw