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soon as it was formed. So long as the expectation should be entertained that a loan might be negotiated more unfavorable to the government than those which had been previously obtained, the price of the stock, to which the contingency was attached, would be affected by the possibility of its occurring:
Here we see the honorable and equitable intentions of Mr. Madison subverted in a material point. The suggestion that thus attempting to deface the stock certificates, and strip them of a material portion of their value, was called for to prevent mistake in issuing more supplemental stock than there was actually due, is preposterous, and too great an impeachment of the capacity of the clerks employed, to require any other notice than the declaration that no such check was necessary, any more than it is to have all the stock certificates of all the loans of government called in every time the payment of a quarter's interest is made, and new certificates issued with that fact stated on their face.
Not satisfied with the aforesaid scheme to defeat the manifest import of the original contract of the 2d May, 1814, Mr. Dallas applied to Congress for a new law authorizing another loan, which was granted; and he borrows, under the new law, the depreciated paper complained of, putting on the shelf the old law; and, when all these measures were adopted, let it always be borne in mind, that the law for the twenty-five million loan had not been exhausted, nor has it been to this day.
The injustice of this depreciated paper system cannot better be illustrated than by referring to Mr. Dallas's annual report to Congress of the 7th December, 1815, pages 26, 27, and 28. In page 26 he admits he could not pay off the loan in the paper received; and if the holders of the stock were not under obligation to take depreciated paper, where will be found the rule of law or standard of justice which should give to the Secretary the right to measure the more favorable terms allowed for any portion of the twenty-five million loan by depreciated paper? In that report, page 27, he mentions having made a profit of thirty-two thousand one hundred and seven dollars and sixty-four cents to the treasury by the sale of public securities above par, as he calls it. This was done by taking in payment the depreciated paper of the District of Columbia, and then requiring the poor soldier, who returned from the wars, to receive his scanty pittance in such paper, which would not purchase him a loaf of bread beyond the ten-miles square, without a discount or loss of 15 or 20 per cent., or wait until government had better funds.
Those who complained of the terms allowed by Mr. Campbell for the ten-million loan, pretended that he could have obtained the whole amount at eighty-five, without any condition.
The truth of the matter was, that there were only about seven millions offered, exclusive of that offered by Mr. Barker, at any fixed price, a portion of which was at 75, as will appear by reference to the catalogue of all the offers herewith. The honorable William Gray considered the stock to be worth only 75 per cent., the price required by him for two hundred thousand dollars. His acknowledged patriotism and sagacity forbid the supposition that he, in offering to loan largely at that price, was influenced by any other consideration than his opinion of the intrinsic value of the stock.
Mr. Gallatin borrowed, in March, 1813, about four millions of dollars, under an advertisement for the sixteen-million loan, dated February, 1813; he allowed for $100 money $100 six per cent. stock, with an annuity of 1 per cent. for thirteen years. On the 18th of the following month, he advertised for further subscriptions to that loan, and promised to all those who had subscribed, as well as to all those who migbt subscribe before a limited day, the option of the same terms. On the 5th of April, Girard & Parish offered him a further sum at 88, with a condition, that if any more favorable terms should be allowed for money borrowed by the United States, under the authority of any law that should pass before the last day of that year, they should have the option of the same terms. This offer he accepted on the 7th of April, 1813; he also accepted an offer from another person at par, with an annuity of 1} per cent. for thirteen years, when he wrote a circular letter to all the subscribers, offering the option of stock at par, with an annuity of 1} per cent. for thirteen years, or stock at 88, which was accepted, and he immediately gave the additional stock, bearing interest from the time the money was paid, or stock at 88, (interest from the same period,) as we preferred; thus those who subscribed under the advertisement of February got an equivalent to 6 per cent., or an annuity of a half per cent. for thirteen years more than they originally contracted for. No further benefit was derived either from the condition in his advertisement, or from that granted to Girard & Parish, because no money was borrowed on better terms for the lenders, under any law passed that year. The third volume of documents in the Treasury Department, for the second session of the thirteenth Congress, contains the Acting Secretary Jones's report to the Senate, dated 30th July, 1813, which is accompanied by all the documents in relation to this transaction.
When Mr. Gallatin contracted, in 1813, at 88, the market price was 94, although no considerable amount could have been sold at that price. When Mr. Campbell contracted at 88, the retail asking market price was only 88, and the condition he allowed was not so extensive as that allowed by Mr. Gallatin. At this time, peace was confidently expected to result from the Gottenburg mission, in which case the condition would have been a dead letter. But for Mr. Barker's contract the loan would have failed, and such an event the government supposed would have proved very prejudicial to that negotiation. Mr. Gallatin, one of the negotiators at Ghent, wrote a letter to the President, in which he gave it as his opinion that the British ministers relied upon our want of resources, and expressed great solicitude that ways and means should be provided to carry on the war in such a manner as to prove to them that they had nothing to hope on that score.
Large sums were soon to become due for the redemption of treasury notes, and the payment of the quarterly interest; the country was at war with a powerful and ferocious enemy; the campaign for the season then about to open; no money in the treasury for these objects; and Congress had adjourned without making any other adequate provision than that of authorizing the loan, for which the Secretary had advertised throughout the Union; and because he accepted of the
best, and, in fact, the only offers made, he has been subjected to very unwarrantable reflections by men who delighted to complain of the administration and their measures.
Much has also been said about the impolicy of contracting at 80. In justice to that honest and distinguished citizen, whose sagacity has so unreasonably been called in question for making that contract, it is proper to remark, that it was made while the ruins of our Capitol were yet smoking, the army of the enemy in full march for Baltimore, and her fleet in the very act of sacking Alexandria; while our armies, from the thinness of their ranks, were bleeding at every pore, although men were presenting themselves at every rendezvous in the Union, and turned away because there was no money to advance for the enlisting-bounty, (the treasury being entirely empty.) Under such circumstances, is it possible that a patriot could be found in the nation who for a moment would cavil about the terms required to relieve such pressing necessities?
It has been said by ignorant persons that Mr. Barker had a motive to cry down the price of the stock, when the fact was the reverse; he had to sell and to borrow on its security, to enable him to perform; and this he could not do if the stock was depreciated. Again: peace was expected daily, which would terminate all hope from the condition, and leave him to suffer by the depreciation ; and, although he might succeed in crying down the stock, he must also have had the wonderful capacity of raising the price in the market, to have benefited by the fall. This no one will award to Mr. Barker, who knew the state of the money market during that dark and gloomy period of
Subjoined list A contains a statement of all the proposals made to government for the ten-million loan, which were accepted on the 2d of May; and list B of those that were rejected; by which it will be seen that Mr. Campbell could not have procured more than about one million and a half, in addition to what he accepted, had he originally allowed 85, and only about three millions had he originally allowed 75; and of those sums rejected, he subsequently obtained a considerable proportion through Mr. Whann.
50,000 80,000 42,000 500,000
257, 300 5,000,000
$6, 129, 300