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due at the times of such payments, and the residue, if any, in reduction, pro tanto, of the principal.
2. That the State of Maryland having paid her debt, January 1, 1817, by an assignment of interest-bearing stocks, and having thus failed to receive the interest after that day, should now be allowed to recover interest up to the day when the claim, as now made, shall be finally discharged, instead of being stopped on the day when she paid her debt; and that, at any rate, by virtue of the third rule prescribed by the act, as already quoted, interest should have been allowed up to the time of the payment, to the State, of the first instalment in October, 1818. These rules of computation, if adopted, would, it is estimated, as applied by the State in her account presented, make due to Maryland, on ihe 4th of March next, the sum of $261,932 71, or thereabouts.
The committee have examined this application with the serious consideration due to the fact that it is preferred by a State of this Union; though we are not aware that, for this cause, it should be determined by a rule varying, in any respect, from that which would govern a like application from an individual citizen. We are deeply sensible of the meritorious nature of the original claim of Maryland, as well as of the patriotic and highly honorable action of that State upon the occasions out of which the demand arose. But we are of opinion that the grounds on which it rests are untenable. We think that the mode of adjustment adopted by the accounting officers of the treasury, under the act of 1826, was required by the spirit and by the terms of the law, as weli as in accordance, in its most material features, with the general and proper usage of the government.
Upon the sums advanced by Maryland, she had actually paid interest up 10 January 1, 1817, when she discharged both principal and interest. The United States had already refunded to her the principal debt. The interest alone was left unsettled. It was to provide for the settlement of this interest that the act of 1826 was passed. This purpose was clearly expressed by the title of the act and by all its terms. The form of the proceedings under it shows that its object was so understood by both parties. It authorized the refundment of the money which the State had paid as interest, and nothing more. The rule of computation followed by the Third Auditor was in accordance not only with the law, but with the custom of the government at that time in other similar cases. The intention of Congress and of the department seems to have been, not to recognise the liability of the government for interest as such, but to reimburse creditors for moneys actually espended for the government's use and benefit. To have adopted the method proposed by the claimants would have been in derogation of this rule. By treating a portion of the principal as still unpaid, and assuming the payment of that residue with interest thereon, it would have involved an infraction of the law which authorized the repayment of interest only. It is true that the government has, at a later period, varied the rule in cases of debts against the government, which had been paid by instalments, so far as to apply the payments, first, to the extinguishment of the interest accrued, and the balance, if any, to the principal, as is proposed by the bill. But this fact is not deemed a
sufficient reason for disturbing the settlements made in this and in so many similar instances before the new rule was adopted.
The committee think the accounting officers did right in stopping the interest at the time Maryland paid her debt, January 1, 1817. The law provided, in so many words, that “no interest should be paid the State on any sum on which she had not paid interest.” We have no doubt but this clause must be construed to mean that no interest should be paid to the State except what she had actually paid. This was the construction given by Attorney General Wirt to a precisely similar provision in the act for the settlement of the claim of the State of Virginia for interest, heretofore referred to, passed March 3, 1825, of which the act of 1826 was literally a transcript, except as to the necessary chai.ge of names. That construction was adopted by the government in the settlement with Virginia, and was acquiesced in by all the parties concerned. The clause upon its face seems to admit of no other reasonable explanation. To have interpreted it as Maryland now proposes, would have imposed the liability to pay the State interest to the time of final satisfaction upon sums on which she might have paid interesi but for a single day. Maryland, in fact, paid no interest after January 1, 1817, when she discharged both principal and interest in full. It follows, if our understanding of the law be correct, that she could receive none after that day. The claim, as made, was warranted neither by the first nor by the second of the directory clauses of the act of 1826, but was excluded by both. The amount charged for interest was neither “expended for the use and benefit of the United States," nor was it a “sum on which the State had paid interest.” The mode of calculation adopted seems to us to have been required also by the clear and necessary construction of the third of said clauses. The settlement by the department, then, was strictly in accordance with the law by which it was instituted and controlled Nor do the committee per. ceive
any difference in principle arising from the fact that the indebtedness was paid by a transfer of interest-bearing stocks. The interest on the stocks was, of course, computed and allowed to the time of the transfer. The State parted with them at their par value. She inade over to her creditors so much stock as, on that day, amounted, with interest, to the sum of her own debt and interest. Not only did she not pay interest after that time, but the committee are unable to see that she “lost” interest in any proper acceptation of the word. The most that can be said of it is, that having parted with her stocks at par value for their full amount, she, as a matter of course, failed to receive interest on them after that time. She owed a debt carrying interest. She owned stocks drawing interest. She cancelled the debt and interest she owed by a sale and transfer of an equal amount of the debt and interest due to her. Her failure to realize interest on her stocks, is compensated by her ceasing to pay interest on her debt. Had she retained her stocks, and left her debt unsettled, she would indeed, as is alleged, have received interest on the former, but she would have had to pay it on the latter. Nor is the case, in our view, different from what it would have been had she retained her stocks, and paid the debt with money from her treasury. In that event, she would have disposed of a fund she might otherwise have so invested that it would
have produced interest. Occasion would have arisen for increased taxation 10 supply the place of the money paid away. Alike in both cases, the Staie is deprived of the use of the means so appropriated. She can be said to have 6 lost" interest as well in one case as in the other. As the payment of the debt by Maryland in the mode adopted, rather than by money from her treasury, caused no damage to the State, so it occasioned no additional advantage to the United States. No special benefit having been conferred by the choice of methods, the committee see no ground for any extraordinary claim for compensation. li has been stated that the stocks transferred by Maryland were securities issued by the general goverument. They continued to draw interest, into whose hands soever they might go. If the claimant's ground be sustained, the United States will, in effect, be charged with interest a second time, because the State preferred 10 sell those stocks at their full value, instead of retaining them and paying her debt with some other funds. The United States would be subjected to the payment of interest up to the time of final settlement under this bill, though the interest on the stocks transferred by Maryland ceased many years ago, when those securities were taken up and cancelled.
Independently of the provisions of the particular law in question, the committee are of opinion the true rule is, and ought to be, that the government will pay such interest only as it has contracted to pay, or as its creditors have actually paid, for its use and benefit. The instances, not numerous, in which a different principle has, to some extent, obtained, are regarded as exceptions which we do not propose to justify, and whose number we do not think it desirable to increase. The government is presumed to be always able and willing to meet all just demands. For this reason the original rule was, as before stated, that it would pay no interest except where the same had been previously contracted for. It has been extended to warrant the refundment of such interest as its creditors have actually paid. As thus modified, it was laid dowr. and enforced by Attorney General Wirt in his opinion upon the claim of Virginia, heretofore adverted to—a claim which was settled upon principles strictly analogous, in all their leading features, with those applied to that of Maryland. To carry the rule further, the committee think would be neither sound in theory nor expedient in practice. To enlarge it in the manner and to the extent now proposed, might involve not only a re-opening of the claim of Maryland, but also of that of Virginia, and many others. It would, in effect, prepare the way for a re-adjustment of a large proportion of all the claims, in whole or in part, for interest, which have been settled since the organization of the government. It would open the door for the abstraction from the treasury, under the name of interest, of sums the large amount of which could not readily be foresern.
The foregoing considerations seem to dispose also of the objection, which the committee understand to be made, that interest should have been allowed, at least, up to the time of the first payment by the government in October, 1818, by virtue of the third regulation prescribed by the act of 1826, which has been already cited, and was as follows: " That where the principal, or any part of it, has been paid or refunded by the United States, or money placed in the hands of Mary
ACCOUNT BETWEEN THE U. S. AND STATE OF MARYLAND.
land for that purpose, the interest on the sum or sums so paid or refunded shall cease, and not be considered as chargeable to the United States any longer than up to the time of the repayment as aforesaid.” The effect of this clause is conceived to be, not that it shall be paid up to that time, but that it shall not be paid afierwards. It fixes a limit beyond which the payment shall not go—not one to which it must extend. It should be construed in connexion with the previous requirement, that “interest shall not be paid on any sum on which the State has not paid interest.” This provision was properly considered to terminate the interest on the day when the State paid her debt.
The committee are confirmed in the conclusions before expressed, by the fact that this whole matter has been already adjudicated, both by the executive and legislative authorities; that the principal debt has been allowed and paid, in a mode ever since acquiesced in; that the claim for interest was afterwards preferred, investigated, and determined, by a rule, consistent, as the committee think, not only with the law enacted for the adjustment of this particular case, but with the established usage of the government; that the sum adjudged due was paid and received; that Congress, when applied to immediately thereafier, upon full examination, with an understanding of all the facts, more than once declined to enlarge the allowance; and that a period of almost thirty years has since elapsed. Adjudications thus ancient, deliberate, and repeated, ought, ordinarily, in our judgment, in the absence of fraud or mistake shown, to be of themselves final and conclusive.
The committee are, therefore, of opinion that the bill ought not to become a law.
PHILIP R. RICE-HEIRS OF.
[To accompany bill H. R. No. 696.]
JANUARY 30, 1855.
Mr. J. C. ALLEN, from the Committee on Revolutionary Claims, made
The Committee on Revolutionary Claims, to whom was referred the pe
tition of the heirs of Philip R. Rice, deceased, formerly of King William county, Virginia, and late of Bracken county, Kentucky, praying compensation for a vessel lost in the service of the United States in the war of the Revolution, have had the same under consideration, and beg leave to report :
That Philip R. Rice, in his petition, filed before his decease, states: that he, while a resident of King William county, Virginia, in the year 1781, was the owner of a small trading vessel, the cost of which was $2,200 ; that shortly before Lord Cornwallis took possession of Yorktown, (otherwise called Little York,) he, with two of his servants, who composed the crew of the vessel, was trading in the York, Potomac, and James rivers, and that while thus engaged, he, together with his two servants and vessel, was pressed into the service of the United States by the press-masters, Robert Radford and Micajah Crews, for the purpose of transporting munitions of war, military and quartermaster's stores, from the town of Cumberland to Taylor's ferry, which duty was performed under the direction of said pressmasters, they being with him, and superintending the loading and unloading of the cargo; that he was then directed by them to go to Newcastle and load with four from Colonel Simms's mill, and with cannon and shells, and pork, and transport the same to York; that, in accordance with their direction, he repaired to Newcastle and loaded, and on his return, before he reached Goodman's island, he was attacked by the British, who, since he had left Taylor's ferry, had taken possession of Yorktown ; that the enemy's force was so well provided with field artillery, that to effect his own escape, and that of his crew, he was compelled to scuttle the vessel to prevent the cargo from falling into the hands of the enemy, and escape (himself and crew) in a skiff; that the vessel went down shortly after they left her, and was afterwards destroyed by the British, but that they (the British) got no part of the cargo, as he believes.
He further states, that the vessel was worth the sum of $2,200 ;