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A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875
Journals of the Continental Congress --SATURDAY, SEPTEMBER 29, 1787.
Congress assembled. Present Massachusetts Connecticut New York New Jersey, Delaware Virginia South Carolina and Georgia and from New hampshire Mr [Nicholas] Gilman from Pensylvania Mr [Arthur] St Clair from Maryland Mr [David] Ross and from North Carolina Mr [John B.] Ashe.2
[Note 2: 2 At this point the proceeding regarding the memorial of General Putnam, which appears on October 1, 1787, was entered and then crossed off.]
[Report of Board of Treasury on letter of J.P. Jones and division of prize money 3]
[Note 3: 3 Papers of the Continental Congress, No. 138, I, pp. 649--680, read September 29, 1787. The enclosures of the report, A to G and No. 1, are on pp. 741--746, 705--710, 725--726, 727--736b, 737--739, 697--698, 699--700 and 681--683, respectively. There are also copies of a letter of Jefferson to the Board of Treasury, August 12, 1786, pp. 693--694; the bond of Jones, pp. 719--720; and a report of the Commissioner of Marine Accounts, July 5, 1787, pp. 715--717. The letter of Jones to the committee, October 4, 1787, replying to the criticism in the report, is on pp. 685--692. According to indorsement and the Committee Book, Papers of the Continental Congress, No. 190, p. 169, this report was referred to a committee consisting of Mr. Melancton Smith, Mr. Nathan Dane, Mr. William Samuel Johnson, Mr, Edward Carrington and Mr. Abraham Clark, which reported October 9 and the letter of Jones was referred to the Secretary for Foreign Affairs to report, which was made on October 8, 1789. See July 20, 1789.]
The Board of Treasury to whom was referred a Letter of the 18th. July last from Captain John Paul Jones, together with a Report of the Commissioner of Accounts for the Marine Department relative
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to the Division of the Prize Money due to the Bonhomme Richard and Alliance
Beg leave to Report
That by the Act1 of Congress of the 1st. day of November 1783 it was resolved "That Captain John Paul Jones be and he is hereby recommended to the Minister Plenipotentiary of the United States at the Court of Versailles as Agent to solicit, under the direction of the said Minister, for payment and satisfaction to the Officers and Crews, for all prizes taken in Europe under his command; and to which they may be in any wise entitled; and that the said Captain J. Paul Jones shall receive the Commission, usually allowed, in such cases, out of the money which he shall recover as Agent for the said Prizes, in full compensation for his Services and Expences; Provided always, That the said Captain J. Paul Jones, previous to his entering on the execution of the said trust, shall give to the Superintendant of Finance, for the Benefit of all concerned, sufficient Bonds with good Security for the faithfull discharge thereof, and for the just payment of the same to the Superintendent of Finance to be by him distributed to those persons who may be entitled thereto."
[Note 1: 1 Journals, vol. XXV, pp. 787--788.]
That in consequence of the above Act, Captain Jones embarked for Europe about the month of November 1783, and commenced his Operations in France for the recovery of the Prize Money above mentioned, which appears to have been received by Mr. Le Ray du Chaumont, in consequence of his appointment for such purpose, by the Honorable Mr. Franklin then Minister Plenipotentiary at the Court of France.
That this Gentleman, having become insolvent, and under the Protection of an Arret de Surcheanse (or Letter of License) Captain Jones applied to the Government of France to undertake the settlement of the Prize Money due to the American Captors, and to make Mr. Chaumont answerable to the Crown for the Reimbursement of the same, which proposition appears to have been acceded to on the part of the Government.
That the division of the Prizes which took place in consequence of it, is stated to have been made, agreeably to the Ordinance of his most Christian Majesty of the 28, March 1779; notwithstanding the express declaration of Captain Jones to the Marquis do Castries Minister of the Marine of France that ye. Force he Commanded was under the
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Commission Laws and Flag of the United States; that the Officers and Men were engaged under his Command as in the American Navy; and that he received his Orders as an American Officer solely from the Minister Plenipotentiary of the United States at the Court of France.
The Board find, that Captain Jones has deducted out of the Prize Money by him received the sum of Thirteen thousand two hundred and ninety one Livres five sous and six deniers which exceeds, by Six thousand and forty two livres eleven sous eight deniers, the sum to which he is entitled agreeably to the established Rules of the American Navy.
That this difference arises from his share of Prize Money being estimated on the Ship Bonhomme Richards apportionment (being 132.912. 5s. 8d. Livres) instead of the Mass of the Monies, appropriated to the two American Ships under his Command, as will appear by the following Statement.
By the Resolve1 of Congress of the 6th. of January 1776, it is declared, "that when two or more armed Ships are in Company at the time Prizes are made, two twentieths of their Value shall be divided equally amongst them."
[Note 1: 1 Journals, vol. IV, pp. 36--37.]
On this Principle the division would have been as follows,
of Course the moiety is Captain Jones true proportion ... 7.248. 10. 10
The difference betwixt the sum retained by Captain Jones, as his share of the Prize Money and what he is entitled to agreeably to the Ordinances of Congress, is one of the objections made by the Commissioner of Marine Accounts in his Report to this Board of the 5th. of July 1787, on the Division of the Prize Money made in France; it observable, however, that the excess is stated by that Officer to be
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only about 3.600. Livres; the difference betwixt the two Statements arises from the Commissioners estimating Captain Jones Share on the Net aggregate sum apportioned to the Ships Bonhomme Richard, and Alliance, without deducting from it the sum charged by Captain Jones on account of his expences, of which, as one of the Captors he ought, on equitable principles, to bear a share.
In Answer to the Commissioners objection it is observed by Captain Jones, in his Letter to the Board of the 21st. of August last (Copy of which is herewith transmitted) That he was not Vide Paper A permitted to make the division; that it was made by the Court of France; and that in consequence of it the sum of Livres 13.291. 5s. 6d. was assigned to him, as his share of the Prize money.
However justifiable the Government of France might be, in making a division of the Prizes, which were captured under the Flag, and Commission of the United States; and in subtracting the sum said to be due to the French Volunteers, serving on board the Bonhomme Richard; there could not, in the opinion of this Board, be any possible pretence for entering into a Subdivision of the Proportion which was assigned to that part of the Crew who were either Americans, or Foreigners not subjects of France.
On this part of the Prize Money a division appears to have been made in France; in which the share assigned to Captn. Jones is (as before stated) taken from the whole proportion assigned to the Bonhomme Richard, whilst that of the American Captors on board that Ship is estimated on the balance assigned to the American part of the Crew, after making the deduction above stated on account of the French Volunteers.
For what purpose this Subdivision of the Prize Money was made in France, the Board do not take upon themselves to determine. The Government of France had no right to enter into this detail, or interest in doing it; none of the Captors were entitled to receive the money in France; neither could it facilitate the subdivision of the Shares which the American Captors were entitled to; since the distribution of them was, by the Resolves of Congress, to be made in this Country; A new
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apportionment must necessarily take place, in which the sums assigned to the Bonhomme Richard, and Alliance will form one mass; and the Shares of the Officers and Men of both Ships be ascertained, agreeably to the Rules of the American Navy. The Plea made by Captain Jones, that the Share, which he has deducted from the Prize Money was made by the Government of France, without his Agency, does not appear to have sufficient weight; he was certainly not bound to abide by it, or to deduct the amount from the Prize Monies received by him; but on the contrary, as well from the Rules of the American Navy, as from the Obligation he was under to pay the whole of the Monies he received into the Treasury of the United States, he ought not to have done it.
In addition to what we have before observed, it is to be remarked, that, though the division of the Prize Money, to the American Captors is stated at the head of the Roll of the Bonhomme Richard to have been made, conformably to the Ordinance of his most Christian Majesty of the 28th. of March last; this circumstance (on an examination of that Ordinance) will be found not to be the case, as will appear by a Report to this Board, from the Commr. of Marine Accounts of the 27th. of August last; copy of which, together with a translation of such parts of the Ordinance aforesaid, as relate to the matter in question, is hereunto annexed. Instead of an adherence either to the Rules of the French, or American Navy in dividing this Prize Money; an Arbitrary mode of division adapted to the present occasion appears to have taken place, partaking in some respects of the American, and in others, of the French Rules for regulating the division of Prizes. (Vide Letter of Commissioner of Marine Accounts marked B.)
The consequences resulting from this mode of division are: That the Shares allotted to the French Captors (by having respect to the number of men and weight of Artillery) are greater than they would have been if in consequence of their serving under the American Flag, a division had been made by the mass, agreeably to the rules of the American Navy; and that, the Share deducted by Captain Jones exceeds, in the proportion above stated what, agreeably to the regulations abovementioned, he was entitled to.
Amongst many instances, which might be pointed out in proof of the first observation, we shall confine ourselves to a single, but remarkable case; that of Mr. de Chamiliad who is stiled Commandant of the
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Volunteers on board the Bonhomme Richard, whose share (as rated in France) is fixed at the sum of
whilst that of the Captain of the Frigate Alliance (who is entitled to an equal share with Captain Jones) estimated on the mass assigned to the American Ships
making a difference in favor of the former of no less than one quarter part.
The Board, being directed by the Resolve1 of the 7th. June 1786 to cause a division of the Prize Monies, received by Captain Jones, to be made amongst the Captors, agreeably to the Ordinances of Congress, it becomes their special duty to state, in a particular manner, the first deviation relative to this Object, in order that, as far as circumstances will admit, Justice may be done to the American Captors in general; and that the errors of the first division may be guarded against, in that of the Prize Money due to Captain Jones's Squadron from the Court of Denmark. By the letter of that Officer to Congress of the 18th. July last; he supposes it will be the intention of that honorable Body, that this division should be made on the same principles, as were adopted in France; but as the operation of those principles, if extended to the Denmark Prize Monies, will augment the injury already sustained by the American Captors, it is not to be presumed that the United States in Congress would dispense with the established rules of the American Navy, under which the American Captors derive their right; supposing such an exercise of Authority to be proper on the part of Congress.
[Note 1: 1 Journals, vol. XXX, p. 333.]
The amount of the Claim on the Court of Denmark, by the papers laid before Congress by Captain Jones, and referred to this Board, appears to be about £40,000 Sterling; so that in the same proportion, as the Division on the Prizes carried into France was
that on the Prize Money claimed from Denmark would be
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making a difference in favor of the Bonhomme Richard of no less than £2.719. Sterling, more than the Alliance; being near ⅕th. part more to the former Vessell than to the latter; and so in proportion to the Crew of that Ship, should the division be made on the same principles as Captain Jones share has been rated in France, as Commander of the Bonhomme Richard.
The Board beg leave further to observe, that the Injury sustained by the mode of division above stated is not merely confined to the Captors; by the Act1 of Congress of the 30th. Octr. 1776, the United States are entitled to one half of all the Merchantmen, Transports and Storeships, which are taken by any Ships of War, or Armed Vessells in their Service; of course, should the monies due from the Court of Denmark be recovered, and a division take place in the mode which has hitherto been adopted, the United States would surrender a rightful claim on account of their Interest, in the above Prize Money of no less than Twenty thousand Pounds Sterling Money of Great Britain.
[Note 1: 1 Journals, vol. VI, p. 913.]
It becomes our duty to insist particularly on this right of the United States, as Captain Jones in his Letter2 to this Board of the 13th. of August 1786, observes "that his most Christian Majesty has generously renounced in favor of the Captors the proportion of the Money arising from the Merchant Prizes, which by the laws of the American Flag, he might have retained." On what principles, such right could be founded the Board are at a Loss to discover; Captain Jones (as before stated in this Report) expressly declares, that the Squadron under his Command was under Commission, Laws and Flag of the United States; that the Officers and Men were engaged under his Command, as in the American Navy; and that he received his orders as an American Officer from the Minister of Congress. If this is the case (which the documents hereafter mentioned confirm incontestably) no other Sovereign power than that of the United States can claim a right, which has no other foundation than the Act of Congress, expressly reserving a Moiety of prizes of certain descriptions to the United States.
[Note 2: 2 Copy in Papers of the Continental Congress, No. 168, II, pp. 375--378.]
The Documents we refer to are marked, C. D. E; and accompany this Report. The two first are copies of a Letter from the Board of Admiralty to the Hon'ble. Doctor Franklin dated at Philadelphia Jany 2d. 1781, proposing certain Queries relative to Cap Jones Squadron;
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and the Answer to them; the latter a Copy of an Instrument stiled a Concordat, or an Agreement entered into betwixt the Commanders of the several Ships, relative to the division of Prize Money &ca.
In answer to one of the above Queries, relative to the Prize Monies, Dr. Franklin writes, "that no Agreement was made by him or any person in his behalf relative to the division of Prizes which should be made by it; that he supposed however the division of the Prizes (if any should be made) would be agreeably to the Laws of France, or of America as should be most equitable; but that the Captains before they sailed entered into an Agreement called a Concordat, by which they agreed to divide according to the Rules of America, as they acted under American Commissions and Colours."
The purport of the Articles in the Concordat, relative [email protected] the Division of Prizes are,
"That in ascertaining the Aggregate of the Prize Money, due to the Officers and Crews of the several Ships, the Laws of the American Flag should prevail."
"That the proportion of the different Ships should be regulated by the Minister of the Marine of France, and the Minister Plenipotentiary of the United States at that Court; and"
"That the Shares of the Several Captors should be afterwards determined agreeably to the Laws of the respective Nations."
If the circumstances attending the outfit of this Squadron are considered perhaps no better principles for the division of the Prize Money, could have been agreed on than, what this Instrument prescribes. It is most probable that this Agreement was known, as well to the then Minister of France, as to Doctor Franklin; it certainly was to the latter; because he mentions it, in his Letter to the Board of Admiralty above referred to. Although therefore he may never have directly exprest his approbation, his acquiescence must be considered as a Sanction to it.
No notice however appears to have been taken of this Instrument in the correspondence, betwixt Captain Jones, and the Minister of the Marine of France; relative to the Prizes carried into the Ports of that Kingdom, neither has any attention been paid to it, in the division, which has taken place of those Prizes.
How far the Advances stated to have been made by the Government of France, for the outfits of the Squadron may induce the United States to relinquish any part of their right to a Moiety of the Merchant
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Prizes, Congress, on an investigation of the circumstances, attending this expedition, can best determine. One of the principal objects intended by it on the part of Doctor Franklin, and Captain Jones, is declared to have been the prospect of relieving a number of American Seamen, who were Prisoners in England, by the Exchange of such British Seamen, as might be Captured during the Cruize. This will appear from Captain Jones Letter to the Marquis de Castries of the 26th. March 1784, and from Doctor Franklin, to Captain Jones of the 25th. of the same month, Extracts of which (marked F. G.), accompany this Report.
When it is considered therefore, that this object was not answered by it; but that the American Captors are already charged with their proportion of the maintenance of the Prisoners in Holland, although they were all exchanged for French Seamen; And further that whilst the United States (by permitting the Alliance to join the Squadron) experienced great loss and Dissapointment through the want of Clothing, and other Stores expected in her, and her Convoy, the powerful diversion of the British Naval Force, occasioned by the operation of this Squadron, proved highly beneficial to France; the advances, stated to have made by the French Government will scarcely be considered, as an equivalent for the circumstances above stated. It is necessary, however, to observe on the subject of these advances, that this Board have no other Documents, than the information given to Captain Jones in France, that Five hundred thousand Livres, had been advanced to Monsr. le Ray de Chaumont for that object. Certain however it is, that Messrs. Gourlade and Moylan (who acted as Mr. Chaumonts' Agents, in fitting out the Squadron) have received from Mr. Grand Banker to the United States in Paris, no less a sum that One hundred and sixty one thousand Livres; for what purpose the Accounts of Mr. Grand do not shew; neither has Mr. Barclay, the Commissioner for settling the Foreign Accounts, in Europe, made any settlement with that house (who were lately his Partners, and are now said to be insolvent) on account of these advances; The presumption is, that the whole or part of these Monies, wherewith they are debited, may have been made for Captain Jones' Squadron; in which case, admitting Captain Jones' information to be well founded Mr. Chaumont must have had double advances for the same object.
As to the Charge made by Captain Jones for his expences amounting to 47.972:11: Livres; instead of a Commission of 5 per Cent on the sum
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he received, (which would amount only to 9.647:3:) Livres, The Board beg leave to observe; that the Act1 of Congress of the 3d. Novr. 1783; under which Captain Jones derives his Authority, declares "That he shall receive the Commission usually allowed in such Cases, out of the Money which he shall recover as Agent for said Prizes, in full compensation for his services and Expences." The evident intention of this clause of the Act appears to be, to ascertain by some rule the compensation, which Captain Jones was to receive for undertaking this Business; and not to leave it altogether Indefinite; which would be the case, if Captain Jones was allowed his expences and afterwards to exhibit a Claim for his Services, and if once the Principle of a Commission is departed from, the latter is certainly as reasonable a Claim, as the former.
[Note 1: 1 The date for this Act should be November 1, 1783. See note 1 on p. 556.]
The point which, in the opinion of this Board, appears necessary to be ascertained, is; What is the usual Commission allowed to Agents for the Recovery of Prize Money, in cases where there is a Probability of Controversy; for such was the situation of the Prize Money, which Captain Jones was appointed to recover. From the best Judgement we can form, a Commission of 5 Per Cent, on the Sum recovered, would (we presume) be estimated an adequate Commission; this is the Commission usually allowed to Factors or Agents, who sollicit and prosecute the recovery of Debts either in this Country or Europe; and exceeds considerably what a Prize Agent would receive who had no further trouble than to receive, and pay monies, arising from the Sales of Prizes, put into his hands.
It is observed by Captain Jones in answer to the Objection made against his charge for expences by the Commissioner of Marine Accounts, that such a case as that of the Prize Money he was appointed to recover, never existed; and, therefore, that the Commission above stated ought not to be applied to him; to support this opinion, a stress is laid by that Officer on the circumstances attending the outfit of that Squadron under his Command, and on his own Character and Situation as Agent; but this Objection if admitted, would involve an absurdity in the Act of Congress, because these Circumstances were known to that honorable Body, at the time the Act respecting Captain Jones' appointment was past, and it cannot be presumed, that the Commission intended by it had in Contemplation, a case which never existed. This construction therefore ought not to be admitted, if a
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more reasonable one can be given to the Act above stated; which can easily be effected, if we suppose (what we presume was the case) that by the expression of, "the Commission usual in such Cases", Congress had only in View the Commission, usually given for the recovery of a Claim in Controversy; which was the case in question. No two cases, in which the recovery of property is concerned, can scarcely ever be similar, either as to the origin of the Claim, or the Character of the party employed to sollicit it; if therefore, Captain Jones objection to the Commission allowed to him by the Commissioner of Marine Accounts has any weight, it will equally apply to every Agent, who is employed to recover a Claim where the Compensation (instead of being precisely fixed) is declared to be the usual Commission.
In fixing Captain Jones Commission, Congress could not have considered his Character, in any other point of view than that of an Agent, appointed to recover Prize Money. By the Act for his Appointment, he is authorised to receive the Commission usual in such Cases, as Agent for the Prizes; and is directed to give Bonds for the faithful discharge of his Trust, for the benefit of all concerned; and, although the United States in Congress may have conceived themselves authorised, from the peculiar Situation of the Prize Money, due to Captain Jones' Squadron, to appoint an Agent for its Recovery, without the concurrence of the Claimants, it does not appear reasonable, to suppose that they meant to subject the Captors to a greater Charge for solliciting this Claim, than is usually given for the recovery of contested demands. The present charge of Captain Jones for his mere expences exceeds a Commission of Twenty five per Cent, and it appears from his Letter to the Board of the 13th August 1786, that he conceives himself entitled to a still further compensation on account of his Services.
Whether or not a Commission of five per Cent on the Prize Money recovered by Captain Jones in France, is an adequate compensation for his time and services is not, in the opinion of the Board, the point in question. Captain Jones' engagement must be considered in the nature of a Contract, with the United States, in behalf of the Captors; and although, in the execution of it, he may not have derived the advantages, which were expected at the time it was entered into, (whatever Claim he may have, on the generosity of Congress) he certainly has no further just demands, against the United States or the Captors, than the Commission of five per Cent, as allowed to him by the Report of the Commissioner of Marine Accounts.
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Captain Jones in his Letter of 13th. August 1786, says, "that at the time his appointment was made it was not expected it would employ a space of more than Six, or at the utmost, of Eight Months;" if this had been the Case, the Amount of his Compensation, agreeably to his Contract (supposing the usual Commission to entitle him to five per Cent) would have been no less than £2000 sterling Money of Great Britain, estimating the amount of the Prizes carried into Denmark and France at no more than £40.000 sterling, whereas the former alone is computed at that sum. This would have exceeded prodigiously any reasonable claim, which Captain Jones, could have exhibited against the United States or the Captors for his time and expences, attending the Business. Would Captain Jones however, in this case, have conceived himself bound to have been content with less than the usual commission as stipulated? he certainly would not, but have pleaded his Contract in justification of the Charge; and the validity of such plea could not have been denied; he might have said, (and with Justice,) that the surplus of the Commission was not more, than an adequate compensation for the risque he ran of having no compensation at all for his time and expences in this Negociation; which must have been the case (agreeably to the Act1 of Congress of the 3d. of November 1783,) had he not succeeded in the recovery of any part of the Prize Money.
[Note 1: 1 The date of this Act should be November 1, 1783. See note 1 on p. 556.]
It is further to be considered, that Captain Jones' Interest as well as Reputation, was materially concerned in obtaining Justice for himself and the Officers and Crews of his Squadron; particularly, as by his own Act he agreed that the Prize Money should go into the hands of Monsieur Le Ray de Chaumont, through whose conduct in withholding the Monies received from the Sale of the Prizes, all the delay and injury sustained by the Captors, has certainly been owing. It is true, that Captain Jones declares in his letter to this Board above referred to, that; "By his Obedience to Doctor Franklins orders the Prizes had got under the graplings of Monsieur Le Ray de Chaumont, who had become a Bankrupt; and that, if that Minister who knew the circumstances of this affair, would have acted in it, there is no reason to doubt but that he could have brought it to a conclusion, with less trouble and expence than any other person." But though the latter part of Captain Jones' remark is probably well founded the former is certainly questionable: It appears by one of the Articles in
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the Agreement entered into and subscribed by the Commanders of the different Ships which composed Captain Jones' Squadron (which paper we have before referred to) that Captain Jones agreed "that the Prizes which might be made should be delivered to Monsieur Le Ray de Chaumont; and that he should be desired not to part with the Share of Prizes to come to the whole Crews, or any one in particular, belonging to the said Squadron, but in their favor or behalf; and to be answerable therefore in his own name." The Authority of Doctor Franklin as Minister of the United States at the Court of France, could go no further than to appoint Mr. Chaumont Agent for that proportion of Prize Money, which might accrue to the United States. It is by the agreement abovementioned only, that he was properly constituted the Agent for the Crews; and it must be presumed that Captain Jones' influence as Commander of the Squadron must have had considerable weight in determining this Agency. Can it therefore be reasonable, that he should not only be personally exempted from all expence whatsoever attending the recovery of this Money; but that he should subject the Claimants in general to the extraordinary expences, attending an Act, in which he must be necessarily considered as one of the principal Agents? That Doctor Franklin does not consider himself in the light which Captain Jones remarks (so far as it regards Mr. Chaumont's appointment) appears clearly from his letter to the Board of Admiralty above referred to, in which he says "that the Captains having made Mr. Chaumont their Trustee and Agent, they must apply to him for their proportions of the Captures."
The Circumstances above stated, and inferences obviously resulting from them will, we presume prove that Captain Jones has no actual Claim against the United States or the Captors for any further Compensation, on account of his Services in the Recovery of the Prize Money, than a Commission of five per Cent, whatever title he may have to the generosity of Congress; and on this last point, it becomes our duty to submit an observation (which has been frequently suggested by this Board) that, whilst heavy and just demands against the Union remain, from the embarrassed State of their Finances, altogether unsatisfied, it would be improper for the United States in Congress, to make any grant of Money, under such circumstances as attend the case in question. If the sum charged by Captain Jones, on account of his Expences whilst in France is allowed (being, as stated by the Commissioner of Marine Accounts no less than thirty Eight thousand three hundred and twenty five Livres of France
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beyond what he is properly entitled to) this sum must be considered as a Grant from the United States; as we conceive the Captors cannot with propriety be charged with more than a Commission of five per Cent, on the monies recovered, agreeably to the Contract made in their behalf with Captain Jones. It may further not be improper to observe, that if in this instance, the nature of Captain Jones' Contract and a regard to the Interest of the United States, as well as that of the Captors will not admit any further allowance; that in other respects of a pecuniary nature, Captain Jones has experienced the favorable disposition of Congress, by a distinguishing preference, over the other Officers of the American Navy, in the settlement of his Accounts and the payment of the balance found due thereon; the whole of which, instead of being paid in Certificates, as the other Officers of the Navy, has been long since discharged in actual Specie; as will appear by the annexed Report of the Commissioner of Marine Accounts, marked No. 1.
As to the charge made against that Officer by Captain Jones, "that his former Report was altogether partial, and drawn up without any regard to circumstances, or previous examination of the documents which accompanied his Accounts ", the board are bound, in justice to the Character of the Commissioner to observe, that, in this instance, as in others, which have come under their cognisance he has conducted himself with that impartiality, as well as firmness, which it is the duty of every Public Officer to manifest in all his transactions; and especially on applications of a pecuniary nature.
On the whole the Board are of Opinion,
That Captain Jones should pay into the Treasury of the United States the sum of Thirty eight thousand three hundred and twenty eight Livres of France; being the excess of monies deducted by him out of the Prize Money received in France beyond the Commission of five per Cent on the said Monies; in order that the Commissioner for Marine Accounts may proceed to a division of the same, agreeably to the Ordinances of the American Navy.
That he should adjust with the Commissioner of Marine Accounts the Share of the Prize Money to which he is entitled as Commander of the Bonhomme Richard, agreeably to the said Ordinances and reimburse whatever sum he shall appear to have deducted from the Prize Monies received by him beyond the Share to which he is properly entitled.
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That if when the Prize Monies received by Captain Jones in France shall have been distributed amongst such of the Claimants as shall apply for the same, within a reasonable period of time, a residue should remain unclaimed; it may then be proper to consider, whether Captain Jones should receive the whole or part of this residue, on account of any extraordinary expences he may have been at in prosecuting this Claim.
The Board are further of opinion, that, if it should be judged proper that Captain Jones should proceed to Denmark, in order to recover the Prize Money, due from the Government of that Country, the Public Interest renders it necessary, (from Circumstances which have happened since Captain Jones first Bonds were executed) that new Securities should be given for the performance of the Trust reposed in him. It may be further adviseable,
That a determinate Commission should be fixed on as a full compensation for his Service and Expences in this Business; and that the whole of the Monies which may be received from the Court of Denmark, after deducting the stipulated Commission, should without any further deduction whatsoever, be paid into the Treasury of the United States; in order that a division may be made of the same to the legal Claimants, agreeably to the Ordinances of the American Navy.
All of which is humbly Submitted.
Samuel Osgood
Walter Livingston
Arthur Lee
Board of Treasury
September 28th. 1787.
[Report of Board of Treasury on the requisition for 17871]
[Note 1: 1 Papers of the Continental Congress, No. 139, pp. 549--583, including annexes A, 2 and C, read September 29, 1787. A printed copy of the report is on pp. 587--598. The covering letter of the Board, also read, is in Papers of the Continental Congress, No. 140, II, p. 453. The report was made order of the day for Wednesday next. See July 14, October 5, 8, and 11, 1787.]
"The Board of Treasury, to whom it was referred to Report a Requisition for the current Year, including one Years Interest on the Foreign Debt, and such part of the Principal as may become due in the ensuing Year; and providing for the Payment of one Years Interest
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on the Domestic Debt, in a mode most convenient to the States, and advantageous to the Union",
Beg leave with great Deference to represent to Congress,
That on an attentive Investigation of the modes, which have been hitherto proposed for the Payment of the Interest of the domestic Debt, it appears altogether impracticable, in the present state of the Foederal Government to make the Interest, or Honor of the Union coincide with what the several States appear to judge for their convenience in this respect. The propriety of this remark will, we presume, appear from a statement of the subsequent facts, and the inferences obviously resulting from them.
The first attempt made by the United States in Congress to induce the several States, to provide means for paying part of the Interest on the domestic Debt, was the Requisition1 of the 4th. and 10th. September 1782; by this, the States are required to furnish their several Quotas of One Million Two hundred Thousand Dollars to be applied for the purpose abovementioned; and license given to appropriate, in the first Instance, their respective Quotas towards the Payment of the Interest of such part of the Debt, as was due to their Citizens, previous to any part thereof being paid into the Public Treasury.
[Note 1: 1 Journals, vol. XXIII, pp. 545--546 and 564.]
Without entering into a discussion how far the license given to the several States, by the foregoing Requisition, is warranted by the Confederation (a point which is probably very Questionable) we shall only observe, that notwithstanding the completion of it was again urged on the States, by the Act2 of Congress of the 12th. of October 1785, not more than Four hundred and Thirty five Thousand, Five hundred and Forty one Dollars was paid on it, to the 31st. of March last; and that only by the States of Massachusets, Pennsylvania, Connecticut and Delaware.
[Note 2: 2 Journals, vol. XXIX, pp. 823--824.]
The second experiment for this purpose is the Requisition3 of the 27th. and 28th. April 1784; by which (although the Estimate on Account of Interest on the Domestic Debt to the end of the Year 1783 was 1,970,760 Dollars,) the Sum actually called for on that Account was Six hundred, and Seventy seven Thousand, Seven hundred, and Forty four Dollars, forty three ninetieths: This Sum the States had a right to pay in Indents of Interest on the Domestic Debt, certified to the end of the Year 1782.
[Note 3: 3 Journals, vol. XXVI, pp. 297--309.]
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The Requisition1 next in course is that of the 27th. of September 1785; by which the Sum required for Interest on the Domestic Debt was Two Million, eight hundred, and five Thousand Seventy one Dollars, and nine ninetieths. This Sum the States were admitted to pay in Indents of Interest, certified to the end of the Year 1784.
[Note 1: 1 Journals, vol. XXIX, pp. 765--771.]
By the last Requisition2 of the 2d. of August 1786 the Sum required for Interest on the Domestic Debt, was One Million, six hundred, and six Thousand, five hundred and sixty Dollars 65/90ths, which Sum, the States had a right to pay in Indents of Interest, certified to the end of the Year 1785; So that the Summary of the Requisitions on Account of Domestic Interest, from the 4th. of September 1782, to the 2d. of August 1786, is as follows,
[Note 2: 2 Journals, vol. XXXI, pp. 461--465.]
It is with regret, that we are constrained to observe, that to the 31st. of March last, the Aggregate Payments, on account of these Requisitions do not appear from any Documents in the Treasury Office to
If from this Balance is deducted the sum of Drs. 1,606,560. 65/90, (being the Sum required for Interest by the Requisition of the 2d. of August last; and for which no Indents of Interest, have as yet been issued) the remainder being 4,672.815.52/90 Dolls. is still in circulation, either in Indents of Interest issued by the United States, or by the several States, in pursuance of the license given to them by the Requisition of the 10th. of September 1782; of which last, no Returns have been made to this Office.
For this large Sum of Public paper there is no reason to presume, that Funds, in the least degree adequate, have been provided by the several States.
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Having compared the aggregate of the Indents which have been issued, with the receipt of them in the General Treasury, it may not be amiss to examine the particular States, by which Payments of Indents have been made; because, by this review, the disposition of the several States, to provide Taxes for the purpose of defraying the Interest of the domestic Debt, may with a considerable degree of Accuracy be ascertained.
On the Requisition of 1782 there has been paid to the 31st day of March last by
On the Requisition of 1784
On the Requisition of 1785.
On the Requisition of 1786.
Hence it appears that (exclusive of the extreme inequality in the Payments of Interest on the domestic Debt) there never has been at any one period a Majority of States disposed to collect Taxes for the Payment of this Interest (notwithstanding the advantageous Terms
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on which such Payments might have been made) and that this disposition, has been diminishing so fast, that on the Requisition of 1785, scarcely any Payments of Indents have been made to the General Treasury; and that no State whatsoever, has complied with the Requisition of the 2d. of August last, so as to provide adequate Funds for their respective Quotas.
The United States in Congress, having however judged it adviseable, to continue the Requisition for Interest on the domestic Debt, it becomes the duty of the Board, to suggest for this purpose, what appears most conducive to the Interest and Honor of the Union.
Two modes only can be devised for Payment of the Interest on the Domestic Debt, so that every Public Creditor may have his Interest ascertained, and regular documents preserved thereof at the General Treasury.
The first is, by an Issue of a Paper Medium for the Payment of the Interest so certified; and making the same receivable as Specie, in all the general Taxes.
The second; by requiring of the several States their respective Quotas for the purpose abovementioned in Gold, or Silver Coin.
The first mode (which is in fact the issuing of Indents) has been already put in practice; and the result has proved, that the several States do not judge it sufficiently convenient, to induce them to comply with it; at least, though some of them have past Acts in apparent conformity to the Requisitions, very few of them have taken measures to collect by Taxes, the Indents issued in pursuance thereof.
The State of Virginia indeed by the Returns in this Office, appears to have collected on the Requisition of 1785, by Taxes on the 1st of January last, more than all the other States in the Union (although the whole Sum collected, for want of a sufficient Accompanyment in Specie, is not yet paid into the General Treasury,) and the States of Pennsylvania and New York, have it is presumed, a sufficient number of Indents to discharge their several proportions of the Domestic Interest; But this (as to the two States last mentioned) arises from an Assumption, of a considerable part of the Capital of the Domestic Debt, and not by the ordinary mode of Taxation.
If then it shall appear, that the continuation of the issue of Indents, is not beneficial, to the Domestic Creditors at large (for whose relief it was calculated,) and that it is injurious to the Public Interest, we presume that Congress will not judge it adviseable to continue it; in which case the Sum adequate to the discharge of the Domestic
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Interest, as well as what is requisite for the other Exigencies of Government for the Year 1787; must, necessarily, be called for, in Specie.
That it is not beneficial to the Domestic Creditors at large, will appear clearly from the following Circumstance.
In the Month of April 1784, the market price of the Domestic Debt (without computing Interest, for which the Purchasers make no allowance) was about Five shillings in the Pound; At present it is about half that Sum. On these principles, the following statement, will shew the Loss sustained by a Person then possest, of One hundred Pounds Capital of the Domestic Debt, and still continuing to hold it.
Which is about 12 Per Cent diminution on the Value of the Capital. This Estimate indeed is made on terms more favorable to the Creditors in Theory, than it would be found in Practice; for the Average Interest on the Domestic Debt, to the end of the Year 1785, would not be 4 Years: Neither could Indents be generally negociated at 8/- in the Pound; they fell much below that Price, soon after those of 1785 were issued, and at present they are from 2/9 to 3/-in the Pound.
This loss indeed might not be sustained by Persons who are skilful in their Speculations, on the Public Debt, since by a quick transfer of their Property on it, they might in a great degree avoid it; But this by the bona fide holder, or original possessor of the Debt, could not be done, and for the relief of such, more than of the former class, we presume the Public Arrangements, for the Payment of the Domestic Interest, ought to be calculated.
That the continuation of the system of issuing Indents is injurious to the Public Interest; will appear clearly from the following Considerations.
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depreciated Value, are sure of finding their way into the State Treasuries; whilst the Gold and Silver (though it may be actually paid by the People) lingers in the hands of the Collectors, for the purposes of Speculation.
It may be said, that the Sum of Specie which is necessary for the Interest of the Domestic Debt, cannot with any prospect of success, be expected from the States, in addition, to what is indispensibly requisite for the support of the Civil Establishment, and Foreign Debt; but this objection (as will appear from the great Balance, still due from the States) will equally apply against calling for it even in that mode; and of course operate against any Requisition whatsoever, on account of Domestic Interest.
For the reasons above stated, the Board have judged it adviseable, to submit to the consideration of Congress the annexed Requisition, in which the Sum necessary for the Domestic Interest, is required in Specie.
This Sum estimating the Domestic Debt, as it was computed by the Register of the Treasury, on the 31st. of March last, will amount to 1,700,407 Dollars.
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To facilitate the Payment of it, as far as practicable; the Board have judged it necessary, to take a review of the Amount in Specie, which has been required of the several States by the existing Requisitions, and to compare with it, the actual Payments, on the appropriations, specified in the Annual Estimates, and the Sums now judged necessary for their Completion; in order, that the Surplus, of the Specie appropriations, (if any should appear) should be applied in aid, of the Sum necessary, for the Payment of one Year's Interest on the Domestic Debt.
This Surplus will appear by the abstract (marked C) to be no less than One Million, two hundred, Thousand Dollars; the principal part of which, arises from the Sum of 1,000,000 Dollars, required in the Year 1784, to discharge Debts contracted, and supposed to be due, in the Years 1782 and 1783; and which it was originally meant to Pay in Specie.
We cannot from any Documents in the Treasury Office ascertain, on what details, this Estimate was grounded: No anticipation has however been made on it, excepting the one stated by the late Superintendent of Finance, at the time of his resignation
hundred, and thirty Thousand, six hundred, and eighty Dollars, which deducted from the 1,000,000 above stated: will leave a Surplus of ... 769,320.00[Note 1: 1 "Five" is evidently an error. Should be "Two."]
This Surplus may, in the judgment of the Board, be applied towards the discharge of the Domestic Interest, for the Year 1786; because, it is to be presumed, that the greatest part of the Debt it was meant to discharge, has entered into the Mass of the Liquidated Debt, and of course, should any Claims be now made under it, it would be proper to adjust the same on Uniform Principles.
The next Surplus of any considerable moment is an excess of Provision in the Monies required for the Payment of the Interest, and Installments, due on the Foreign Debt, owing to an error in former Estimates, as particularly explained in the Abstract abovementioned Amounting to333,111.
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The third Surplus, is an excess of Specie required by the Requisition of 1784, beyond, what the Aggregate of the Specie Appropriations, as specified in the Estimate on which that Requisition was founded, renders necessary.
By appropriating this Sum, to the Payment of one Year's Interest, on the Domestic Debt, the deficiency to be required of the States will be Five hundred, thousand four hundred and seven Dollars.
In the Estimate on which the proposed Requisition is founded, Congress will observe, that we have included a Sum adequate, to the discharge of the Debts, contracted in consequence of the Act1 of Congress of the 20th. October last, for augmenting the Troops, in Service, which by the Estimate of the Secretary at War marked No 4 Amounts to Forty eight Thousand five hundred, and Forty eight Dollars.
[Note 1: 1 Journals, vol. XXXI, pp. 892--893.]
The special Requisition, which was intended for defraying the Expences accruing from that Act, having been repealed, and the States permitted to pass any Monies, paid on Account of the same, to the Credit of the former Specie Requisitions, no appropriation has of course been made for it; the Requisition of the 2d. of August last, having only provided for the Expences of the Military Establishment, as it then stood. A question may perhaps arise, whether it might be proper to appropriate the whole Specie surplus, as above stated, for the Payment of the Interest on the Domestic Debt, to the end of the Year 1786; since by comparing the aggregate of the Sums required of the States, on Account of Domestic Interest, with the Estimates on which those Requisitions are founded; the Provision for compleating the Payment, of the Domestic Interest to the end of the Year 1786, will not appear adequate. But it is doubtful how far these Estimates
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can be relied on. In some cases (as in the Requisition of 1782) Congress left it to the States to ascertain and pay the Interest, for which that Requisition is made; and even where such license was not given, some States in the Union have undertaken such Payments.
No proper Documents of the Interest so paid, has been returned to this Office; notwithstanding the several States, were by the Requisition of the 27th. September 1785, required to make returns of all Interest paid by them respectively, to the first of January 1786; of course it is not yet practicable, to ascertain, with sufficient precision the commencement of the respective periods of Interest.
When the Returns are compleated of all the Indents issued on the Requisition of 1785 (with which almost every State in the Union complied) it is probable, that a pretty accurate Estimate, may be made of the provision necessary, for compleating the Payment of the Domestic Interest.
In the mean while the arrangements made by Congress, for the disposal of the Western Lands, by public Auction, or Contract, and by the Sale of the public copper, will not only absorb a Stun of Domestic Interest now due; but will lessen extremely, the Sum requisite, for that object in future; so that should there on a future Investigation, appear a deficiency, in the Provision made for Domestic Interest, to the end of the Year 1786; the States it is presumed (as they will become more able) will feel themselves better disposed to provide for it, than they appear to be at present.
All of which is humbly Submitted
Board of Treasury
September 28th. 1787.
A
Estimate of the Monies requisite for the Services of the Year 1787.
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[Note 1: 1 55/90 omitted.]
B.
By the United States in Congress Assembled.
September 1787.
Resolved, That for the services of the present Year One thousand seven hundred, and eighty seven, it will be necessary, that the several States should pay, into the common Treasury, on or before the first day ofnext, the Sum offor the following purposes Vizt.
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3,009,798.58[Note 1: 1 The correct sum is 64/90 and not 58/90.]
From which deduct the Sum of One Million, Two hundred Thousand Dollars, being the excess of Specie, called for by the several Requisitions, of 1784, 1785, and 1786, beyond what is at present found necessary; (agreeably to a Report of this date from the Board of Treasury) and the Balance to be raised in Virtue of the present Requisition will be One Million, eight hundred, and nine thousand, Seven hundred, and Ninety eight Drs. 58/90. That the Quotas, of the several States of the Sum above stated be as follows, Vizt.
That the excess in Specie, of the former Requisitions, as above stated be, and, it is hereby appropriated towards the Payment of one Years Interest, on the Domestic Debt, for the Year 1786, any thing in the said Requisitions to the contrary notwithstanding; and that whenever, one Moiety of the Sum required for the above purpose, shall be paid into the common Treasury, the Board of Treasury be, and they are hereby authorised, and directed to give public notice thereof in the several States, and to take such measures for the Payment of the
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said Interest, as they shall think best adapted, for the convenience of the Public Creditors, in the several States, and for preserving regular Documents, of the Interest so paid.
That the foregoing Requisition is made in virtue of the powers of the Confederation, and is obligatory on the States as such; and that the Payments under the same shall be past to the Credit of the States respectively, on the terms prescribed by the Resolve1 of Congress, of the 6th. day of October 1779; and be applied in conformity to the Statement, in the preceding part of this Requisition, giving preference, according to the Order, in which they are placed in the Estimate.
[Note 1: 1 Journals, vol. XV, p. 1147.]
And whereas, from the delinquency, in several States, in discharging their respective Quotas, of the general Requisitions, the Public Service, is not only greatly impeded, but the United States, have been precluded from the means, of discharging their Foreign Engagements, which are at present accumulated, to a very heavy Amount.
Resolved, That it be again required of the several States, as indispensibly necessary, to the Welfare and Honor of the Union, to pay without delay, into the General Treasury, their several Quotas, of the former Requisitions; and that the States, which continue particularly delinquent, must be considered, as responsible for all the Evils, which will inevitably flow, from a total disregard to the political obligations, by which they are Constitutionally bound, to the other Members, of the Confederacy.
Samuel Osgood
Walter Livingston
Arthur Lee
No. 2
Estimate of Money requisite for the War Department from 1st. January to 31st. December 1787.
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of Congress of the 20th. October 1786, per Estimate of the 13th. August 1787 ... 48,748.17[Note 1: 1 Journals, vol. XXXI, pp. 892--893.]
C.
Comparative Estimate of the Sums required in Specie of the several States, by the Requisitions of 1784, 1785, and 1786, with the Expenditures made under the several Appropriations; and the Sums now judged necessary to complete the same; shewing the Surplus, or short provision of the Specie Appropriations, for the Years abovementioned.
By the Requisition of 1784 was required of the States in Specie Vizt.
By that of the 27th. September 1785.
122,231.[Note 2: 2 In order to give the total under this requisition and balance this account with the recapitulation this amount should be 122,831.]
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By the Requisition of the 2d. of August 1786 the Sum required in Specie was,
In these Sums were included through error 4 Years Interest on the 18 Million, French Loan; whereas 2 Years only, ought to have been called for, to complete the Interest to 1787 inclusive; that for 1784, and 1785, having been included in the Estimates of these Years; making an excess (after rectifying an Error in the Estimate of the Year 1784, of computing the Interest on 24 Million of Livres at 220,000 instead of 220,222) of 333,111 Dollars.
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From the above Statement it appears
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On the other Articles mentioned in the Recapitulation, there does not on examination, appear any Surplus; the excess however of the Sums required in Specie of the several States, by the Requisition of 1784, beyond the Aggregate objects, for which Specie was necessary, may be applied as stated in the Report.
... 1,263,892.15[Note 1: 1 September 29, 1787. According to indorsement was read a petition of Henry Rogers, Richard Lush and Jacob John Lansing, August 20, 1787, requesting an explanation of a resolution respecting them. Papers of the Continental Congress, No. 42, VI, pp. 528--530. See October 3 and 4, 1787.]
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