mitted instead of specie; in others, private bills would be substituted; in others, mutual credits between the merchants, to be liquidated in the course of mutual dealings, would supply the call. Hence it is only true that Treasury bills sometimes answer the purpose of cash to the Bank, whence it does not follow that they ought always to be considered and credited definitively as cash. It is also true, though in a less degree, that notes deposited with the Bank by individuals for collection, sometimes answer to it the purposes of cash; but it will be readily perceived that it would be inadmissible, as a general rule, to receive and credit them as such. The effect in both cases would be, that the Bank would make an advance of a present sum without interest, for a sum to be received in future.

An arrangement, indeed, has been for some time depending between the Bank of the United States and the Treasury, for securing to the Government the advantage of an immediate absolute credit for the bills deposited, as so much cash, to be coupled with some collateral accommodations to the Bank. But it has not yet been carried into effect. The fact heretofore has been as stated, and the reasoning, to be just, must proceed on that basis. The last of the two positions which have been cited, has still less foundation than the first.

A sum received to-day, for a bill deposited two months past, can in no view be deemed a substitute for the amount of a bill deposited to-day, to be received two months hence. It is to be remembered, that the amount of the first bill was itself credited at the time of the deposite; and that the sum received to-day on that account, can only realize the antecedent credit. It cannot represent, or be an equivalent for the future receipt upon a different bill. To affirm that it could, is to make one sum the representative of two. The consequence of the reasoning would be, that the Government ought to receive the money paid in to-day as a satisfaction, as well for the bill deposited to-day, as for that which was deposited two months past.

Making the proper deductions on account of the bills, the amount of the effective cash in the banks at Philadelphia, New York, and Baltimore, was, on the 1st of June, $587,091 11; in other banks, there was then also the further sum of $9,591 89, making, together, $596,683. The amount of the effective cash on the 2d of July, in the banks at Philadelphia, New York, and Baltimore, was $217,234 76; there were then also in the other banks, $184,998 85; making, together, $402,233 61. The amount of the effective cash on the 1st of October, in the banks at Philadelphia, New York, and Baltimore, was $244,394 27; there were then also in the other banks, $145,420 24; making, together, $389,814 51.

The deductions for bills at the several periods were, June 1st, $157,508 33; July 2d, $220,900; October 1st, $31,100; so that, including the bills at that epoch, the whole sum in the banks at Philadelphia, New York, and Baltimore, amounted to no more than $275,494 27; the sums in the other banks, to $145,420 24.

On the 1st of June, there were paid on account of the Debt to France, $100,000; the day following, the first instalment of $100,000, on account of the Loan from the Bank, was received. On the 30th of June, the second instalment of $100,000 was received. These two instalments, amounting to $200,000, are included in the sum of $217,234 76, which, on the 2d of July, constituted the cash in all the banks at Philadelphia, New York, and Baltimore.

About the beginning of August, another instalment on account of the Loan of the Bank was received, and on the 29th of September, another, making, with the preceding ones, $400,000. This sum was involved in the balance in the Treasury on the 1st of October, which, it has been seen, did not exceed in the banks at and near the Seat of the Government, including even unsold and unpaid bills, $275,494 27; and comprehending the sums in all the other banks, amounted to no more than $420,914 51.

From the foregoing detail, it appears that, excluding the $200,000 received on Loan of the Bank of the United States in the month of June, there would have been, on the 2d of July, 1792, in the command of the Treasury at those places, from which immediate supplies may be derived, no greater sum than $17,234 76; that, excluding the $400,000 before that time received on Loan of the same Bank, there would have been on the 1st of October, 1792, an absolute deficiency within the scene described, of $124,505 73; that the whole balance then in the Treasury, wheresoever deposited, amounted only to $420,914 51, and, excluding the Loan of the Bank, would not have been more than $20,914 51.

There must be some very radical error in my conceptions of the proper condition of the Treasury, if it was not in a sufficiently low state during the whole period under consideration; and if it be not demonstrated that the moneys taken of the Bank on Loan were necessary for the public service, and were obtained with a due regard to economy.

There are circumstances which still further manifest the attention which has been paid to this point. The powers given to make Loans for domestic purposes at different times, up to the 8th of May, 1792, comprehend an aggregate of $1,053,355 74; the sums which have been actually obtained upon interest, amount to no more than $455,000.

The contract upon which the $400,000 were obtained, was made the 25th of May, 1792, extending to $523,500, and contemplating the payment of $400,000 of that sum by the Bank, in equal monthly instalments, beginning on the 1st of June, and ending the 1st of September; the residue on the 1st of January, 1793.

Previous to the making of that contract, there had been stipulated to be paid, on account of the French Debt, for the supplies to St. Domingo, $400,000, of which one-fourth was paid in March, another fourth was payable on the 1st of June, another fourth on the 1st of September, another fourth on the 1st of December.

There remain to be noticed two circumstances, which will serve to throw additional light upon the conduct which has been observed with regard to the sums from time to time kept on hand. A comparison of the sums in the Treasury, during the years 1791 and 1792, will contradict the idea of any disposition to suffer the public moneys to accumulate for the benefit of the Bank of the United States and its subdivisions, and will at the same time indicate the general rule which has governed. In this comparison, it is necessary to recollect that larger operations were to be performed in 1792.

It may be objected, that the rule laid down has been on several occasions exceeded. How this has happened at certain periods, has been explained. But there is a view of the subject which will throw further light upon it.

The sums which appear on hand at the end of any quarter, are always larger on a retrospective, than on a previous view. This proceeds from the following cause:

The judgment to be formed beforehand of the sums which will be received within any future period, must of necessity be regulated by the returns in the possession of the Treasury, at the time the examination is made. As these come forward with more or less punctuality, that judgment will be more or less accurate; but the appearance on the returns will always be short of the fact, because a certain number of returns, at any period of examination, will necessarily be deficient. What does not appear, must of course be essentially excluded from the calculation of the receipts to be expected within any near period; because the extent of the sums which may have accrued beyond those shown by the returns in hand, is unknown, and it is still more uncertain in what months the payments of them may fall; and the combinations of the Treasury, as to the means of fulfilling the demands upon it, ought to proceed as little as possible upon conjectures and uncertainties. Monthly abstracts of the bonds taken at each port, are the documents which serve to inform the Treasury of the progress of the receipts upon the duties of imports. From these a general abstract is made up once a month at the Treasury, for the information of the Head of the Department, showing the amount payable in each month. But very considerable differences appear from one month to another. The statement CZ will serve as an illustration. It contains a comparison of the sums shown by two successive abstracts, one of the 7th of November, the other of the 7th of December last, for a term of ten months,

with December, it is $151,789 40; upon a quarter beginning with January, and ending with March, it is $174,471 66; upon a subsequent quarter, it is $81,055 81; upon a still subsequent quarter, it is $87,991 86. Hence it is evident that an arrangement founded upon the abstract of the 7th of November, would suppose a receipt during any part of the time embraced by it, even the most proximate, considerably less than would appear by the abstract only one month later; and it must always happen, from this circumstance, that the actual receipts, while punctuality is preserved, will exceed the anticipations of them, and that greater balances will be found to exist at any given period, than could have been beforehand safely calculated or acted upon. This circumstance, duly considered, will be a further and powerful justification of the conduct pursued generally, in relation to the moneys from time to time kept on hand, and particularly with regard to the Loans of the Bank. Low as the state of the Treasury appears to have been on a retrospective view, when the moneys upon those Loans were called for, the prospect, at each time, must have presented the appearance of a less competent supply, or a greater deficiency, than was afterwards realized.

I am not sure but that I owe an apology to the House for taking up so much of its time in obviating the imputation of partiality or favoritism towards the banks. The aspect under which I view it, admonishes me that I may have annexed to it greater importance than was intended to be given to it by its authors.

That a disposition friendly to the accommodation of those institutions, as far as might be consistent with official duty and the public interest, bas characterized the conduct of the Department, will not be denied. No man, placed in the office of the Secretary of the Treasury, whatever theoretic doubts he may have brought into it, would be a single month without surrendering those doubts to a full conviction, that banks are essential to the pecuniary operations of the Government. No man, having a practical knowledge of the probable resources of the country in the article of specie, (which he would with caution rate beyond the actual revenues of the Government,) would rely upon the annual collection of $4,500,000, without the instrumentality of institutions that give a continual impulse to circulation, and prevent the stagnation to be otherwise expected from locking up from time to time large sums for periodical disbursements, to say nothing of the accommodations which facilitate to the merchant the payment of the considerable demands made upon him by the Treasury. No man, practically acquainted with the pecuniary ability of individuals in this country, would count upon finding the means of those anticipations of the current revenue for the current service, which have been, and will be necessary, from any other source than that of the

banks. No prudent administrator of the finances of the country, therefore, but would yield to the disposition which has been acknowledged as alike essential to the interest of the Government, and to the satisfactory discharge of his trust-a disposition which would naturally lead to good offices, within the proper and justifiable bounds.

After the explanation which has been offered, to manifest the necessity and propriety of the Loans made of the Bank, it can scarcely be requisite to enter into a refutation of the process by which it has been endeavored to establish that the Government pays 17 per cent. upon those Loans. The state of the Treasury rendered it expedient to borrow the sums which were borrowed; they have been duly received, and the rate of interest stipulated upon them is 5 per cent. The Government, then, pays upon them 5 per cent., and no more. The history which was given in my last Letter, of the course and situation of the Foreign fund, proves that the supposition from which the inference, of paying 17 per cent. upon the Domestic Loan, has been drawn, is erroneous. The balances on hand at the respective periods in question, are the residues of the moneys which had been received from every source, including the Loans, foreign and domestic.

But, if the supposition which appears to have been made had been true, it was still impossible that 17 per cent. could have been paid. By no construction can the rate be extended beyond 10. The mean interest of the money borrowed abroad, including charges, is 5 per cent.; the interest stipulated to be paid on the Loan from the Bank is also 5; the sum of the two is 10. It is immaterial for what purpose the Foreign fund was obtained, whether to pay to France or to purchase the Debt; the worst consequence that can result is double, not treble interest. The interest payable to France is payable for moneys borrowed and spent during the war. It can never be truly said, that that interest is now payable on any existing fund, whether borrowed in Holland or borrowed in the United States, or borrowed there and re-borrowed here. It can never serve to make an addition to the cost or charges of any such fund. It is payable upon one long since procured and used.

But it is not obvious how the supposition came to be entertained, that all the moneys drawn here from the Foreign fund, had been borrowed for the payment of the Debt to France. The presumption would seem to have been more natural, that they had been principally, if not wholly, introduced with a view to purchases of the Debt, and consequently had a more special reference to the act authorizing a Loan for that purpose. And the fact is, that this was the destination of far the greatest proportion of the sums drawn for. It has been stated that a part had an eye to the supplies to St. Domingo, and that another part was introduced with a view to the payment of the foreign officers. The additional observations to which I shall request the attention of the House will apply to the course and state of the Sinking Fund, concerning which I transmitted with my last communication three statements, numbered I, II, and III.

To give a more collected view of this part of the subject, it may be of use to include here a recapitulation of some ideas which have been stated in other places.

It is the course and practice of the Department, for all public moneys, from whatever source proceeding, to pass into the Treasury, and there form a common mass, subject, under the responsibility of the officers of the Department, to the disposítions which have been prescribed by law.

The surplus at the end of the year 1790, appropriated to the Sinking Fund, amounting to $1,374,656 40, went, as it was received, into the Treasury.

All the proceeds of the bills drawn upon the Foreign fund, prior to April, 1792, except the sum of $177,998 80, left in deposite with the Bank of North America, for reasons which have been explained, passed from time to time into the Treasury. The whole amount of the sums paid in is $907,294 23.

The proceeds of the bills drawn for, in, and subsequent to, April, 1792, have not yet passed into the Treasury, for reasons which have been likewise assigned. It would have been done before this time, as far as the receipts had gone, but for the present inquiry, which temporarily suspended it. I thought it best to make no alteration in the state of things as they stood when it began, at least till all the information desired had been given. Measures will now be taken for a settlement of the accounts, and for a transfer of the proceeds. The whole amount of those bills, paid and unpaid, including an estimated sum of interest, will be, as heretofore stated, $1,220,476 10.

The whole amount of the bills drawn is $2,305,769 13.

Out of the Sinking Fund composed of the surplus of the revenue, to the end of 1790, and the proceeds of the Foreign bills, there were issued from the Treasury, and expended in purchases, to the end of 1792, $957,770 65.

For reasons which have been stated, it was finally deemed advisable to place those purchases wholly to the account of the surplus of 1790.

Consequently, there remained on the 1st of January, of the present year, $416,885 75, of the above mentioned surplus, unapplied to purchases; and the whole of the Foreign Fund, except the sum of $726,000, paid, and reserved to be paid, for the use of the Colony of St. Domingo, and the sum of $191,316 90 paid, and reserved to be paid, to the foreign officers, became free for future application. The balance of the proceeds of the bills, after deducting for those reservations, is $1,388,452 22.

Since the 1st of January, 1793, there have been issued, on account of the Foreign Fund, for purchases, $284,901 89.

The practice has uniformly been, not to separate any of the moneys belonging to the Sinking Fund, from the common mass of the moneys in the Treasury, but in proportion to the occasions of investing them in purchases.

Hence the sum of $957,770 65, issued previous to the present year, and the sum of $284,901 89 including the present year,making, together, $1,242,