« AnteriorContinua »
ust, withepressions of t1
opposite contingency, which actually did happen, it was apparent that there would be a tendency to decline in the government stocks, which would bring ruin upon the contractors, without such a condition as that which was actually adopted. It is well known that, upon such occasions, contractors for government loans, to be paid in instalments, usually rely upon the sale or pledge of the stocks received for one instalment, in order to meet the next. It is apparent, therefore, that in the present case the contractors who took the loan above its market price must, without the condition, have suffered immense losses from the continued depression of the market, owing to the prolongation of the war. The terms of the contract were perfectly legitimate, and afforded only a fair security to the parties who, in that dark period of our history, patriotically stepped forward and risked their fortunes for the support of the government.
In July following (1814) the government advertised for another sum of six millions, part of the twenty-five million loan, to be closed on the 22d August next thereafter. This loan entirely failed. The British forces entered the city of Washington on the 24th of that month. The banks of New York, and all south of that city, suspended specie payments. The banks of Baltimore and Washington sent off all their valuable effects upon the approach of the enemy, and the members of the government dispersed, and did not again reassemble in Washington until after the evacuation of the city by the British army, which took place on the night of the 26th. On the 30th the Secretary of the Treasury opened new negotiations for six of the twenty-five millions authorized to be borrowed as above stated. On the following day, the 31st August, 1814, a contract was made with the officers of the Baltimore and District banks, and sundry other persons, for something like two and a half millions of dollars, at eighty per cent., payable in the depreciated paper of the banks aforesaid.
Upon the negotiation of this second part of the twenty-five million loan, the holders of the stock in the first part of the loan claimed the performance of the condition incorporated in the original contract. Upon this demand various difficulties were started, of which the most important were these:
First. The Secretary of the Treasury insisted that the parties entitled to the benefit of the condition were not the parties holding the first stock at the time of the second loan, but the parties who held at the time of paying the difference due on account of the condition. It is apparent that this was a very material point, and the position of the Secretary was in direct conflict with the express terms of the contract. This point, however, becomes less important, as it is understood that the parties claiming the supplemental stock have settled this question among themselves. The committee, nevertheless, refer to the correspondence of the department, and especially to the opinion of Mr. Pinckney hereto appended, in which the full discussion of this question will be found.
Second. The Secretary of the Treasury insisted, that upon the negotiation of the second loan under the law of 1814, and upon the issuance of the supplemental stock for the difference, in conformity with the terms of the contract, the condition was exhausted, and the
statetary of thich was thditional ortions of the
and closedstock in existence, nga relating to that per
government might thereafter negotiate portions of that loan upon any terms, without incurring any additional obligations to the holders of the original stock. Such was the decision of the Attorney General, and the Secretary of the Treasury acted upon it, for the express purpose-as stated in the letter of the acting Comptroller of the 24th November, 1814-of giving notice to the subsequent purchasers of the stock that the stipulations contained in the contract had been fulfilled; "or, in other words, that everything relating to that contract, so far as respected the stock in existence, was deemed at the treasury to be settled and closed.” The effect of these proceedings must have been at once to reduce the value of the original stock in the market; for it is plain that the condition attached was an important element in the estimate of its value. Indeed, the published letters of the department avow the purpose of notifying subsequent purchasers to prevent their paying the additional value given to the stock by the continuance of the condition. The committee cannot concur in the decision of this point, and they believe that nothing but the great embarrassments of the treasury would ever have induced any public officer to place such a construction upon the original contract. It is well said by the memorialists, that if this construction be correct, the treasury might have equally exhausted the condition, and put an end to the rights of the parties, by negotiating any inconsiderable part of the loan at one-eighth of one per cent. below the original contract price, and then proceeded to sell the whole balance at a greatlyreduced rate. Such a construction would have placed it in the power of the department to effect the complete ruin of those who had generously aided the government in its extremity.
It is true, however, that in adopting these harsh and unjust measures, to the injury of the holders of stock, the Comptroller of the Treasury, in his letter above quoted, says: "No exaction is made from them of any release whatever of their rights and claims in this respect. Their rights will still remain with themselves, and their remedies with Congress.” But the officers of the treasury do not seem to have had entire confidence in the legality of their proceedings and the soundness of their construction of the original contract; for, in a short time afterwards, before the twenty-five million loan had been half exhausted, the Secretary of the Treasury applied to Congress for power to make a new loan, which was granted by the act of 15th November, 1814. The 8th section of this act expressly authorized the banks in the District of Columbia to take any part of this new loan. They accordingly did subscribe for it, paying the amount in their own depreciated paper. The effect of this stratagem, if not its very object, was to rid the government entirely of the condition attached to the loan authorized by the act of 24th March preceding. But while the government was thus relieved from a troublesome condition, the rights and interests of the former contractors were wholly sacrificed. Reasons of State, arising from the emergencies of the time, may have justified this evasion of a fair and valid contract; but it is doubtful whether the strict maintenance of good faith, on the part of the government, would not have tended more to sustain its credit in the market, and its strength in the confidence of the people. However this may be, there can be no question as to the propriety of doing complete justice at the present time.
The memorialists do not claim any remuneration for the injury done to the value of their stock by notifying the parties that the condition was exhausted; or by the subsequent act of setting aside the loan of March and resorting to that of November. That these proceedings did result in great injury, must be admitted from the very nature of things, though it might be difficult to determine the extent of loss incurred. But leaving these particulars entirely out of the case, the memorialists place themselves upon the ground of a single well-established fact, upon which they claim what they believe to be an unquestionable legal right. This fact is, that the loans negotiated on the 31st of August, 1814, were taken at the rate of eighty dollars in the hundred, payable; and actually paid, in depreciated bank paper. In settling with the holders of the original stock upon the basis of this second loan, the Secretary paid only the difference between eighty and eighty-eight, estimating the depreciated bank paper, paid under the second contract, as equivalent to so much specie. The memorialists now claim the difference between the value of money and the currency in which the payments were stipulated and received.
It does not appear, so far as the committee have been able to see, that the parties made the claim in this form at the time of these transactions. The only questions then discussed between the stockholders and the government were those already alluded to in this report: first, as to the parties entitled to receive the supplemental stock; and, secondly, as to the continuance of the condition after the second negotiation. But it will be readily seen that, under the circumstances then existing, with the certainty that other negotiations would be required for obtaining the balance of the twenty-five million loan, the question which is now so material was then of little importance; because, upon any subsequent negotiation, in which the terms might have been still more favorable to the lender, the original stockholders would have been entitled to a sum equal to the further depreciation of the stock, and it was not very material whether that advantage continued attached to the original stock or was added in the face of the supplemental stock. But the parties seem to have been at the mercy of the department, and were forced to receive whatever they could obtain. The power of the government was exerted with little regard to rights of the parties, and the occasion was altogether unfavorable to the assertion of the present demand, even if the first contractors then knew the terms of the second loan. But there is no evidence that they were apprized of the fact that depreciated paper was received, especially as the department even now asserts that there is nothing remaining on the books or records to show it.
If the loan of the 31st of August was actually stipulated to be paid, or in fact was paid, in a depreciated currency, the committee do not see how the claim of the memorialists can be denied. In order to ascertain the facts, application was made at the Treasury Department for such information as could be furnished from that quarter. But they received nothing satisfactory in reply, as will be seen "by the correspondence appended. In looking, however, at the history of the period, the testimony presented, and the admissions made from time to time in the various treasury reports, the committee cannot doubt that the facts are as averred by the memorialists, and that the 80 per cent. paid on the negotiation of the 31st of August was entirely illusive, being paid in the depreciated currency of the times. The deposition of Dennis A. Smith, one of the contractors, distinctly proves the fact. And it further appears, that during the period from the 20th of September to the 10th of December following, in which the monthly instalments were to be paid, the paper received varied from ten to twenty-four per cent. below par.
But, while the committee are satisfied of these general facts, they deem it inappropriate for them to attempt to determine, absolutely, either the fact of depreciation in the funds received at the treasury, or the amount to which it would entitle the claimants. In their judgment, however, it would be eminently just and proper that the accounting officers of the treasury should be authorized to hear testimony as to the fact and amount of depreciation, in order that the faith of the government may be redeemed, and the legal rights of the parties under their contract with the government secured, by paying the amount found to be due. Considering with what cheerful patriotism Mr. Jacob Barker gave his energies, his eminent financial talents, and his great pecuniary means, to sustain his country in the darkest and most perilous hour of the war of 1812, it can hardly be supposed that Congress will deny him the privilege of establishing, if he can, a clearly legal demand, arising out of a recorded contract, which, while it benefited the government, resulted in his own ruin. The committee, therefore, report a bill for the relief of the memorialists, and ask the favorable consideration of the House.
COMMITTEE ROOM OF THE JUDICIARY,
House of Representatives, Washington, July 12, 1854. SIR: The enclosed papers in relation to the claim of the assignees of Jacob Barker, arising out of the ten-million loan of 1814, have been referred to the Committee on the Judiciary for examination and report. That committee has instructed me to ask information from your department upon the following points:
Ist. Were any other contracts made for any part of the $25,000,000 authorized by the act of the 24th March, 1814, except those of the 2d May, 1814, for the ten millions; and of the 31st August of the same year, for six millions? If any other contracts were made, please state the terms, &c.
2d. What persons, according to the books of the treasury, were the actual holders of the stock in the ten-million loan of the 2d May, 1814, at the time the second loan, to wit: that of the 31st August, was made?
3d. Upon what precise terms the second or any subsequent loan, for part of said twenty-five millions, was made ? Whether the contractors agreed to pay in money or in bank paper or credits ; whether may be, there can be no question as to the propriety of des plete justice at the present time.
The memorialists do not claim any remuneration for done to the value of their stock by notifying the parties th dition was exhausted; or by the subsequent act of settin" loan of March and resorting to that of November. Thai ceedings did result in great injury, must be admitted fr nature of things, though it might be difficult to determi, of loss incurred. But leaving these particulars entire, case, the memorialists place themselves upon the groun , well-established fact, upon which they claim what they an unquestionable legal right. This fact is, that the lo on the 31st of August, 1814, were taken at the rate of in the hundred, payable; and actually paid, in de paper. In settling with the holders of the original basis of this second loan, the Secretary paid only t) tween eighty and eighty-eight, estimating the depr per, paid under the second contract, as equivalent cie. The memorialists now claim the difference bet money and the currency in which the payments we received.
It does not appear, so far as the committee hav that the parties made the claim in this form at transactions. The only questions then discussed holders and the government were those already a. port: first, as to the parties entitled to receive the and, secondly, as to the continuance of the condi: negotiation. But it will be readily seen that, uni then existing, with the certainty that other neg quired for obtaining the balance of the twentyquestion which is now so material was then of cause, upon any subsequent negotiation, in w have been still more favorable to the lender, th would have been entitled to a sum equal to t of the stock, and it was not very material w continued attached to the original stock or v the supplemental stock. But the parties se mercy of the department, and were forced t could obtain. The power of the government regard to rights of the parties, and the occavorable to the assertion of the present dem:. tractors then knew the terms of the secor evidence that they were apprized of the fa was received, especially as the department is nothing remaining on the books or recor
If the loan of the 31st of August was ac or in fact was paid, in a depreciated curi, see how the claim of the memorialists can certain the facts, application was made for such information as could be furnisl. they received nothing satisfactory in re