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tas, it was thought by the committee that the books should be produced ad the subject was deferred at that session. At the 2d session of the 19th Congress a bill was reported, accompanied by a report, to which the compittee refer, before the books were examined, predicated on the testimony of Mr. Naylor, principally as to the amount expended. The bill proposed to appropriate $ 39,039 85. Taking the testimony of Mr. Naylor as correct, the committee debited the United StatesTo amount of actual expenditures, under a contract for erecting fortifications-at Dauphin Island,

$ 311,839 00 To the value of 17 slaves lost, which were kept from the possession of the contractors under a deed of trust

10,200 00

$ 322,039 00

And credited the United StatesBy cash, at sundry times, for work put up and materials furnished

$ 162,251 37 By 80 slaves, at $ 600 each

48,000 00 By amount of award of commissioner

73, 747 78

-283,999 15

$ 39,039 85 The bill not having been acted on at that session, it was reported again at the first session of the Twentieth Congress, and at the last session it was passed by the House, after deducting the sum of $ 10,200, which was paid by the acting Secretary of War on the 2d of June, 1828.

With the most profound respect for the discrimination and accuracy of the distinguished gentleman, who, as the organ of the committee, reported the bills mentioned, and with the utmost deference for the decision of the House, this committee has come to the conclusion, that the principle on which the former reports were made, is erroneous, and that the reports are not sustained by the testimony. The rule adopted by the committee “is to repay to the contractors all their actual expenditures incident to the contract; in other words, to pay them all expenses for work and labor done, and materials furnished towards the execution of the contract.” Every person who enters into a contract, whether with the Government, or with an individual, hopes to derive some benefit or profit from it. Neither of these can ever be realized if the rule be correct. If the contract is one from which great profits may be made, the party for whom the labor is to be bestowed, under this rule would be tempted to put an end to the contract, and pay the “actual expenditures incident to it.” The rule is not reciprocal, and if the party performing the labor abandons the contract because it is a losing one, he would be held to refund to the party observant, the damages he might sustain by the breach. If a contract made by the Government was ruinous to the other party, and the Government should abandon it, justice would not require that this “ actual expenditure incident to the contract” should be paid. One man, by his prudence, economy, industry, and good judgment, would make a profit on a contract, on which a man destitute of these qualifications, but possessing their opposites, would lose, and still, by the rule, they are put on an equal footing; each to be refunded his “ expenditures.' If the rule is correct, the Government should go into an examination, not only of the expenditure, but of the prudence with which it was made: for it will not be contended that the Government is liable for the ex. penditure of money needlessly or wastefully made. The petitioners must make out their case, and the necessity of incurring the expense, in this view, devolves on them, otherwise the Government is bound to pay them all the money they have expended, whether necessary or unnecessary for the accomplishment of the work.

The committee will endeavor to show, that the money expended by the petitioners is far less than the amount assumed by the former committee in the report mentioned. As has been before noticed, the committee relied principally on the testimony of Mr. Naylor. A witness gains or loses credit, as the things to which he refers exist or not. Mr. Naylor was the assistant clerk of Farrow and Harris, at Dauphin Island, and he testifies “ that, from his situation as superintendent in the receipt and distribution of provisions, goods, implements, and materials, and as assistant clerk in keeping a book of disbursements, he had the most ample knowledge of the expense and cost which the contractors had been at, in the prosecution of said works up to the time that General Starke took the contract of them. This deponent says, he has carefully examined the books of said Farrow and Harris, and finds from entries made either in the hand writing of the other clerks or of this deponent, actual expenditures up to May, 1820, of at least $ 241,839, which sum does not include, in the opinion of this deponent, all the disbursements made by. the said Harris and Farrow; but what, in addition, might have been expended by them, which neither passed through his hands, nor was entered in their books, this deponent cannot undertake to say.” He relies upon his own recollection, and upon the books; the first may be inaccurate, the second cannot be, if they were faithfully kept; and whether they were or not, is of no importance in putting his testimony to the test: for he states he has examined them, and he gives the result as mentioned above. He says that they expended under General Starke $ 70,000, making the whole $ 311,839. And this is the sum taken by the committee as the amount they expended. On examining the hooks, it is found that they show an expenditure of no more than $ 100,849 82, to which add the $ 70,000 expended by General Starke, and $ 50,000 expended by Mr. Farrow, as testified to by Mr. Green, and the whole amount of the expenditures, appearing on the books, or by parol testimony, not referring to the books, is $ 220,849 82, making a difference between the sum taken by the committee of $90,989 16. The amount on the books as stated above is corroborated by the testimony of Dr. Sallie; he says, that, when General Starke took the management of the works, the contractors had expended about $ 100,000.

The whole amount of money paid, is $254,037 81, as follows, to wit: Money advanced and charged on the þooks of the Treasury, $170,090 03 Award of Mr. Swann,

73,747 78 Paid by order of the acting Secretary of War, ,

10,200 00

$254,037 82

Acccounted for as follows: By work done and materials delivered, as evidenced by the books,

$100,849 82 Furnished by Farrow, as testified by Green, 50,000 00 Expended by and under General Starke,

70,000 00

Amount to balance,

220,849 89 33,187 99

S254,037 81

There has been overpaid $33,187 99, after allowing the petitioners the full amount of all their expenditures.

The petitioners have presented a statement, wherein they claim that they espended $346,665. This, however, is unaccompanied with any legal evitence to support any part of the account, further than is admitted by the committee in the account stated above. As far as the committee can trace the Demorandums, &c. much of this account grew out of the purchase of slaves, which has been conceded by all not to be the proper subject of a charge against the United States.

In relation to the amount claimed to have been expended by the petitioners, two things are important to be noticed:

ist. The committee admits to their credit, $50,000, the value of a cargo shipped from Alexandria, as testified to by Mr. Green. Whether the whole or any part of this cargo was paid for, is not known; but, the presumption is, at least, equal, that a part of the account now claimed, arises from this shipment, for which they have been credited in the account as stated by the committee.

2d. The committee has credited them $70,000, expended under the direction of General Starke. It is not to be inferred from thence, that this amount of money was expended from the funds of General Starke.

Mr. Naylor says, “ that it cost the contractors about $70,000, under the management of their agunt, Starke, up to the suspension of said works by the Government." This excludes the idea that General Starke advanced his own funds; he was not bound to have done so. The committee, therefore, cannot know whether many, if not all of the items now presented for articles purchased and expenses incurred at the South, may not be included in the gross sum allowed on account of expenditures under Gen. Starke.

It is in the power of the petitioners to show what are the facts: for no one will pretend that they ought to be allowed the whole of their expenses in gross sums, and then the items composing them. The amount they claim to have expended, so far exceeds the value of the work done, and the materials delivered, that they should be held to something like strict proof. They say they have expended

$346,665 00 The value of the work and materials delivered, we have seen amounts to

53,305 35

Difference, $293,359 65 They say that Mr. Farrow was to keep separate books.

If he has such books, he is bound to produce them; and, if he withholds them, the usual presumption arises, that, if they were produced, they would operate against them. The petitioners say, they have been ruined by the contract. It is very easy to see that such may be the case. They had drawn from the Treasury large sums of money, and incurred heavy expenses, in the purchasing of negroes, in the purchasing of land, in the construction of brick yards, in the purchasing of implements for carrying on the works, and in the purchasing of materials, one-half of which they sold to General Starke on the 10th April, 1820, and put the other half under his absolute control; and in August following, sold the whole of the property to him; from the sale of which, or for the use of which, it does not appear that they had ever been paid one cent. The property sold on the 10th of April was to be appraised by three men, and the consideration mentioned in the deed of sale, of Aus gust, is $ 40,000. They have divested themselves of the whole of their property, by the conveyances made to General Starke.

Cubical yards. By this contract they were to construct of brick masonry 30,000 Of this was constructed

1,4468

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In every aspect in which the committee can view the case, whether as to the profits that might have been made, or as to the expenses incurred, this committee cannot see that the petitioners are entitled to any further relief.

The petitioners, by their conveyances made to General Starke, have, in the opinion of the committee; divested themselves of all their interest in the contract. The nature of their assignments was not known at the time the commissioner acted, nor until the evidence was taken by Captain Burch.

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