countersigned by the Comptroller, and registered by the Register, which is the course regularly observed.

Answer to question the second.

After moneys are deposited in banks to the credit of the Treasurer, they are in his control, though they may not legally be disbursed but upon warrants of the above description. If deposited without passing, in the first instance, to the credit of the Treasurer, the means used for placing them in his custody and disposal, are warrants of the like kind.

Answer to question the third.

In respect to any moneys of the United States deposited in banks, but not passed to the credit of the Treasurer, the banks are considered as directly responsible to the United States; in the case of deposits to the credit of the Treasurer, they are responsible, in the first instance, to him; ultimately, to the United States.

Answer to question the fourth.

Only two cases are recollected, in which moneys of the United States may be considered as having been deposited in bank, without passing, in the first instance, in the account of the Treasurer. These relate

1. To the proceeds of foreign bills sold for the Government, and received by the bank (all accounts of which are finally closed).

2. To the sum of two hundred thousand dollars, being the only sum now so deposited, which arises from the last loan had of the bank. It is left (subject to the eventual decision of the Legislature) as an offset against the second instalment of the two million loan from the bank. The effect of the operation will be this: An interest of six per cent., payable to the bank, upon the instalment, will be extinguished, from the 31st of December last, by an interest of five per cent., payable to the bank, upon the sum borrowed of itself, and left in deposit. And it has been endeavored, thereby, to preserve consistency and regularity in the arrangements of the treasury. The first instalment, by leaving in deposit an equal sum of the proceeds of foreign bills, was considered as effected on the 31st of December, 1792, though there was not power to consummate the payment till some months

after. Hence it becomes regular, that each succeeding instalment should be paid on the last of December of each year. The provisional measure thus adopted, was the only expedient in the power of the treasury, to reconcile, as far as practicable, considerations relative to the public interest and credit, with legality of procedure. Neither the sum in deposit, on the one hand, nor the instalment payable to the bank, on the other, is brought into the probable state of cash, lately presented to the House of Representatives, because they balance each other, and leave the result the same.

There are no existing sources from which moneys can come into bank, on account of the United States, except from the proceeds of the revenue, which, as far as known, are comprised in the statement before the House of Representatives. So that there is no resource, but a loan, which can supply the deficit of a receipt, in the course of the present and succeeding quarter, compared with the expenditure. Without one, a failure in the public payments is inevitable.

If what has been said should not give the committee all the light they desire, it is imagined that personal explanations would lead more fully to their object, than the course of written interrogatories and answers, which can only partially embrace the subject, and may procrastinate a right understanding of it.

I am, sir, &c.

THEODORE SEDGWICK, Esq.

Chairman of a Committee.

ALEXANDER HAMILTON.

LOAN.

Communicated to the House of Representatives, April 25, 1794.

TREASURY DEPARTMENT, April 25, 1794.

The Secretary of the Treasury, pursuant to the order of the House of Representatives of the 28th of February, 1794, respectfully makes the following report:

The paper A, herewith transmitted, is a copy of the contract

with the Bank of the United States, respecting the loan of two millions of dollars, had of that institution, in conformity with a provision for that purpose, in the act by which it is incorporated.

According to the intent of this contract, as understood by the Secretary of the Treasury, and the Bank, the first instal ment of 200,000 dollars, was payable on the 1st of January, 1793. The Secretary, in a report to the House of Representatives, of the 30th of November, 1792, submitted a provision for reimbursing the loan to the Bank. None was made till the time for reimbursing the first instalment, as understood between the treasury and the Bank, had elapsed. On the 1st of January, 1793, the Secretary, by letter, informed the Bank, that he would leave in deposit, as an offset against that instalment, a sum of 200,000 dollars, till legislative provision should be made concerning the matter. An act of Congress, of the 2d March, 1793, authorized the payment of this instalment, out of the proceeds of the foreign loans. But the then Attorney General being of opinion that, upon the legal construction of the contract, compared with the words of the act, the payment could not be made till the 25th of June, 1793, the completion of the business accordingly remained suspended till the 20th of July following, when a warrant issued to pay over the proceeds of the bills in deposit, to the treasurer, and another warrant, to pay an equal sum to the Bank. Interest upon the instalment ceased on the 31st of December, 1792, by virtue of the deposit.

The foregoing transaction confirmed the principle of paying each instalment on the last day of the year. The Secretary, in a report to the House of Representatives, of the 21st December, 1793, submitted a proposition for making provision for the second instalment. None having been made, he, by a letter to the Bank, of the 31st of December, 1793, informed that the Legislature, not having yet had leisure to provide for the second instalment of the two million loan, he had concluded to suspend calling into the treasury the last instalment of a loan of 800,000 dollars, which had been contracted with the Bank; and that that sum would remain in deposit, as an offset against the first mentioned instalment, till provision should be made by law. This business

still remains in the same situation, no provision having yet been made by law; but the effect is to arrest interest, at the rate of six per cent. upon the sum payable to the Bank, by a fund obtained from the Bank itself, bearing an interest of only 5 per

cent.

All which is humbly submitted.

ALEXANDER HAMILTON,

Secretary of the Treasury.

A.

Agreement between Alexander Hamilton, Secretary of the Treasury of the United States, by virtue of authority from the President of the United States, on behalf of the United States, of the one part, and the President, Directors, and Company, of the Bank of the United States, of the other part.

Whereas, in and by the act, entitled "An act to incorporate the subscribers to the Bank of the United States," it is, among other things, enacted, in the words following: "That it shall be lawful for the President of the United States, at any time or times, within eighteen months after the first day of April next, to cause a subscription to be made to the stock of the said corporation, as part of the aforesaid capital stock of ten millions of dollars, on behalf of the United States, to an amount not exceeding two millions of dollars, to be paid out of the moneys which shall be borrowed by virtue of either of the acts, the one entitled 'An act making provision for the debt of the United States,' and the other entitled 'An act making provision for the reduction of the public debt;' borrowing of the bank an equal sum to be applied to the purposes for which the said moneys shall have been procured, reimbursable in ten years, by equal annual instalments, or at any time sooner, or in any greater proportions, that the Government may think fit:"

And whereas, for carrying into execution the said provision,

the President by writing under his hand, bearing date the ninth day of May last past, did authorize the said Secretary to subscribe by one or more subscriptions, on behalf, and in the name, of the United States, for such number of shares of and in the capital stock of the said corporation, as, together, should amount to two millions of dollars; and the same to pay for, out of any moneys which have been, or shall be, borrowed, by virtue of either of the acts, the one entitled "An act making provision for the debt of the United States," and the other entitled "An act making provision for the reduction of the public debt;" and did further authorize the said Secretary to borrow of the said corporation, for, and on account of, the United States, an equal sum, namely, two millions of dollars, to be applied to the same purposes for which the said moneys shall have been procured, and to be reimbursable in ten years, by equal annual instalments, or at any time sooner, or in any greater proportions that the Government may think fit: Provided, That the interest thereof should not exceed the rate of six per centum per annum; and did also empower the said Secretary to enter into, and conclude with, the said corporation, such contracts and agreements as should be necessary for fulfilling the purposes aforesaid, promising to ratify whatever he should lawfully do in the premises:

Now, therefore, these presents witness, That it hath been agreed, and it is hereby agreed, by and between the parties aforesaid, as follows, to wit:

First. The said Secretary of the Treasury, forthwith, after the execution of these presents, shall, pursuant to the authority to him given, as aforesaid, subscribe, in some proper book, at the said bank, in the name, and on behalf of, the United States, for five thousand shares of, and in the capital stock of, the said corporation.

Secondly. The subscription, so to be made, shall be deemed to have been made on the 20th day of December last past, and the said United States shall be deemed to have become, on the said day, and shall be, proprietors of the said five thousand shares of and in the said capital stock, subject to the conditions and agreements hereinafter specified.