The enquirer. [volume] (Richmond, Va.) 1804-1815, 1809-07-04

year 1885, at near six millions, aul the amount
OF interest at only four millions of dollars.
The papers and G refer to a loan of 2OO, 900
dollars obtained in December, 1873. from the
bank, for the purpose Of reimbursiny an install.
ment of the principal of the loan of two millions
of dollars, had of the bank pursuant to the 1lth
section ct the act of incorporation. TIE loan is
through some error Ut the transcriser stated To,
be by virtue of the 9th section of the act rd of
March, l795; which section does not confer any
authority to borrow money, And the loan was
evidently made under the tenth, and not under
the first section of the act tor it is intended for
the purpose ofreimbursing an instalment of rrin.
cipal, and not for paying the interest on the pub
lie debt {: and it was also made for term offnnr
years, (though reimbursable sooner at the plea
sure of the United States,) which could not have
been done under the power vested by the first
section, which directs an absolute reimburse
ment within ayear from the time Of each loan.
This loan was made because there was no sur
plus ofrevenue IN the treasury applicable to the
payment ofthe said instslment" by which it is not
meant that srrplusses of revenue were alone az.
proPriated for that object for SO much of the
duties on imports, and spirits distilled, and stills
as would be sufficient to pay the instruments of
that two millions loan, were appropriated by the
9th section of the act Of rd March, 1895; and
The commissioners were directed by the 1Ith sec
ton of the same act, reimburse the said install
ments as they became due. Nor was there i'm
the year 1898 any deficiency in the revenues ap
plopriated Tor the payment of interest and prin.
cipal which the commissioners of the sinking
fund were directed to make for the revenues
pledged exceeded bytbree millions of dollars,
the payments made on that account. pit
at that time, as at present, the necessity of
recurring to the authorityto borrow, vested by
the act IN the commissioners, resulted from a
deficiency in the general receipts, which du.
nSr xaaatsf. lIvIn <.Es
lures.
Under those Impressions, it was stated i'm the
report made on the LIST inst. that it might be
necessary to borrow a sum equal to the amount
of the principal OF the public debt reimbursed du.
ring the year 1909; and that provided the an.
tliority vested by the act of 3rd March, 1895,
should be expressly extended to the stock issu-
ed under the act ct llth February, 1907, no q.
Their provision seemed necessary for the public
service of this year. And as in the statement
| and estimates from which those conclusions were
drawn, the monies actually in the treasury at the
commencement Of the year are stated at near
ten millions sfdOllars /; and, the demands on nc
count ofthe public debt for this year, at less than
six millions and half, the report was evidently
founded on the supposed correctness of the con.
struction above mentioned. But if that construc-
ton shall be deemed incorrect, and it the now
ers vested intlte commissioners by the 10th sec
ton 1.-THE act of 3rd March, 1895, shall be con.
sldered by Congress, As applicable only to tho
case, when the monies in the treatury, together
with the probable receipts for the year, shall fall
short of eight millions of dollars the provision
suggested by the report (and which was intend
Ell only to remove doubt respecting the nature
OF the de5tto watch the powers were Applicability
will not be sufficient 1t will then be necessary
to pass law, giving express authority, to boi.-
row the money which may be wanted.
l must acknowledge that, so far as relates to
The eXtinguishment 6f the debt AMI independent
ofthe question respecting the true construction
ofthe law, perceive no material difference be-
tween the two modes. Whenever the expcnces
OF The nation shall exceed its revenues, loans
must, IN some shape or another, be obtained
and the important question, is, whether all the
eXpences incurred be really necessary, or even
useful. On the decision of that question the Sc
crctary OF the treasury has no control Ifhe had
there would certainly he no necessity to borrow
money in time peace.
Permit ME to add some observations, explana-
tory OF the letter written to the President of the
bank, on points not Immediately embraced by the
resolution Of the House.
There were two reasons, why it was thought
more eligible in this instance to negotiate Il loan
with the bank than with individuals 1t is still
uncertain when, and to what amount the money
may be wanted. A contract with individuals
requires previous notice and arrangements, and
IS absolute, so rs to compel government to re-
ceve the amount lent, according to the terms of
the contract. But with the bank it was suffici-
eat TO ascertain whether the loan could if wan.
ted, be obtained from that institution; the con-
tract might be delayed till it was ascertained
whether, and to what amount, the loan was ne
cessary; and it might he avoided altogether, if
not actually necessary. The reimbursement
would also be made with more convenience, g.
some, interest saved, because the re-payments
may be made TO the bank from time to time and
IN any sums whatever, according to the situation
of the Treasury.
In proposing to the bank that they should give
notice to the treasury of their wish TO be REIN
bursed the whole amount of their exchanged
SIX per cent. stock, my object was TO facilitate
the loan, since by that operation there would
have been no real payment, but only commu-
tation of debt and also to accommodate, so far
as was consistent with the public interest, those
individuals who, by accepting the terms of the
act OF February, 1907, had become owners of
exchanged six per cent. stock, and who, that
stock being above par, could not desire to be re-
lmbursed. As it related to the bank, that consi
Iteration was immateria, as it was not presum-
ed that they wanted to sell their stock.
have the honor to be,
With great respect, sir,
Your most ob't serv't
ALBERT GALLATIN
TIE Honordbie the