tained, 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, 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 this 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 dispositions 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 dollars and 40 cents, 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 dollars and 80 cents, 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 dollars and 23 cents.

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

For these Statements see State Papers, Vol. I. pp. 210, 211, 212.

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 dollars and ten cents.

The whole amount of the bills drawn is 2,305,769 dollars and 13 cents.

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 dollars and 65 cents.

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 dollars and 75 cents, of the above mentioned surplus, unapplied to purchases; and the whole of the foreign fund, except the sum of 726,000 dollars paid, and reserved to be paid, for the use of the colony of St. Domingo, and the sum of 191,316 dollars and 90 cents 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 dollars and 22 cents.

Since the 1st of January, 1793, there have been issued, on account of the foreign fund, for purchases, 284,901 dollars and 89 cents.

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 dollars and 65 cents, issued previous to the present year, and the sum of 284,901 dollars and 89 cents, issued during the present year, making, together, 1,242,672

dollars and 54 cents, are all the moneys which have been ever separated from the common mass of the treasury, for the purpose of the sinking fund; the whole of which, except 49,282 dollars and 74 cents, have been actually expended in purchases.

The unapplied sum remains deposited in the Bank of the United States, except a small balance of 61 dollars and 76 cents, in the hands of William Heth.

From the above rule, the part of the sinking fund arising from interest on the debt extinguished by purchases or otherwise, is to be excepted. The practice hitherto, has been to include this interest in the general dividend of each quarter, and the warrant issued to the cashier of the bank for paying it. The statement No. 3,* accompanying my last letter, shows the application of this fund hitherto.

The law directs that this fund shall be invested within thirty days after each quarter. This provision began to take effect on the 1st of July last.

But the investments were not made within the respective times prescribed. This proceeded partly from the state of the market, and partly from the regulations adopted by the commissioners, who were the Secretary of State, the Attorney General, and the Secretary of the Treasury.

Their regulations, applying to the two first quarters, limited the prices to certain rates, and prescribed the mode of sealed proposals. The Treasurer was appointed agent for the commissioners.

The proposals, with regard to the first quarter, were receivable till 28th of July inclusively; none were offered, as the Treasurer reported to me, and nothing was done.

The experiment of scaled proposals was again tried the second quarter, with somewhat more, though with but little success. The restriction to this mode of proceeding was rescinded, on the last day of the thirty allowed for purchasing, and some further purchases were made, but the whole sum invested was only 25,969 dollars and 96 cents.

* For statement III, see State Papers, Vol. I., Finance, p. 212.

The residue of this fund, except some small sums noted at foot of statement No. 3, was in January past.

The unapplied part of the surplus of 1790 having been expended in aid of the receipts of 1791, according to the provision which was made for that purpose, will remain suspended until the future receipts shall so far exceed the current disbursements as to produce a surplus for replacing it.

In computing the amount of the unapplied foreign fund, it is necessary to take into the account the payments made from it during the years 1791 and 1792, on account of the interest of the foreign debt.

Provision having been made for paying this interest out of the domestic revenues, the sums which have been paid on that account, from the foreign fund, are to be considered in the same light as if they had been transferred here by drafts.

The amount paid at Amsterdam is 1,633,189 guilders and two stivers, equal at 36, ninetieths per guilder, to 659,874 dollars and 34 cents.

There will be additions to be made, which are not at present ascertained.

Adding this sum to the proceeds of the bills, and deducting the sums paid and to be paid for St. Domingo, and the foreign officers, and those applied to purchases during the present year, there will remain a sum of 1,763,424 dollars and 68 cents, subject to a future application.

Of this sum 1,715,098 dollars and 11 cents will be properly applicable to the purchase of the debt. But circumstances may render it eligible to appropriate a part of it towards the discharge of the foreign debt.

From the plan which has been pursued, it is also liable to this application.

I have the honor to annex to the statements heretofore transmitted, those in the printed schedules marked A, B, and C.*

A exhibits the relative state of revenue and appropriations,

* For A, B, and C, see State Papers, Vol. I., Finance, pp. 219 to 222.

to the end of 1792. B the relative state of appropriations and expenditures to the same period; showing the balance unsatisfied of each head of appropriation. C, applies these statements to an explanation of the demands or charges upon the excess of income, beyond the disbursements, to the end of 1792.

In addition to these are two statements, marked D and E.

D, showing what proportion of the balances unsatisfied of the several appropriations are likely to be real expenditures, and what part are not likely to be so. In this, however, in several instances, probability must guide, the nature of the thing not admitting of certainty.

E, showing the cash on hand upon the first of January last, and likely to be received from that day to the first of April next, and the sums paid and payable during that period.

The result, founded upon facts, contradicts very essentially that statement, which aims at showing the ability of the treasury, besides defraying the current expenses of the quarter, to pay off two millions to the bank; still leaving a balance in favor of the treasury of 664,263 dollars aud 54 cents.

It shows that, after satisfying the demands for which the treasury is bound to be prepared, including a payment to the bank of only one tenth part of the 2,000,000, of which the statement alluded to supposes the complete payment; there would remain a balance in favor of the treasury of no more than 664,180 dollars and 89 cents.

It could answer no valuable purpose to delay the House with a particular examination of the various misapprehensions which have led to a result so different from the true one. It will be sufficient, as an example, to state a single instance. It is assumed as an item in the calculation, that a sum of a million of dollars will come into the treasury by the first of April, on account of the revenue of the current year; while the probability is, that the sum received may not exceed ten thousand dollars; this presumption of a million is evidently founded upon two mistakes. 1st. It proceeds on the basis of an annual revenue of four millions of dollars, and supposes this sum equally distributed between the different quarters of the year, a million to each