Daily Richmond times. [volume] (Richmond, Va.) 1849-1850, 1849-08-11
RICH M o N Ds V A.
Saturday Morning, August II, 1S49.
THE sUB-TREASURY LAW-ITS OPEN
VIOLATION

THE SUB-TREASURY LAW-IT'S OPEN
VIOLATION
There is one aspect in which the disclosure of
Mr. Denby's enormous defalcation is of much great
er importance to the public, than regards the
mere degree of improperly which is to be attached
to his conduct or to that of his security and agent
Mr.. Osborne through whose failure he became I'M
able to meet his obligations to the government
We refer to the undeniable proof which the case
brings to light that the provisions of the Sub-Trea
sury law were openly and knowingly violated by the
late Administration The leading principle of that
law was, that all the rece pts and disbursements of
public money were TO be in gold or silver. 1t was
proposed and carried through Congress, and trump
eted forth to the country, hard money measure
So strict was its requirement that nothing but spe
Gle should be paid received, that an effort of
Mr.. Secretary Walker himself to an amend
ment, by which treasury drafts might in certain
cases be paid to public creditors instead Of CON- was
met with stern refusal by a Democratic Senate
The explicit words of the law (Sec. l9) are these:
EVERY officer OF agent engaged in making disbuse
Of the United States, tthe General
Post Office shall make all payments IN gold siLuer coin
treasury notes. if the creditor agree to receive said
notes in payment
by SeCuOil ~, II ~ PROVIDED
"That no exchange of funds shall be made By any dis
bursting officers or agents of the government Of any grade
denomination lohatsoeUey connected Nth any
branch Of the public SERVICE other than an exchange tor
gold syer and every such disbursng officer when the
means for his disbursements furnished to him iii gold
and silver shall make his payment in the money fur
nsDed; when those means are furnished to him IN
drafts shall those drafts to be presented at their
place Of payment and properly paid according to the law
and shall make his payments in the money SO received tor
the drafts furnished unless 10 either case he can exchange
the means in his hands for gold and silver at par
The plain import OF these provisions is, that the
dsbursing officers and agents, Of every description,
are to consider ali funds deposited with them in gold
and silver, as especial deposites, and must pay out
only those identical funds, other gold and silver for
which they may exchange them; and in case they
have treasury drafts placed in their fIarss they
forbidden in any case TO pay the public creditor in
those drafts, and are required to get them cashed at
tbs depository upon which they are drawn and to
nav out the specie thus procured unless they can
themselves actually exchange the drafts for gold and
silver at par When the bill was before the Senate,
Mr., Dixon H Lewis, then chairman of the commit
tee Of Finance, exerted himself to procure an
amendment of this 18th section, so that when the
drafts "co2t2d not be dasbarse5 at par the disburs-
ing officer might nevertheless pay them out, IT the
creditor willing to accept them in satisfaction OF
his duties. Mr.. Lewis declared that without this
amendment, the wheels Of the Independent Trea-
sury aoc,d be locked, the law would introduce ga
miserable system Of speculation on The government
funds" but strict hard money prevailed and the Sc
nate rejected the amendment by vote of 40 to IL.
We recur 10 this historical fact for the purpose of
showing how distinct and unquestionabe was the
meaning of the SubTreasury law, that officer
entrusted with specie must pay out that very specie
or other equiv alent specie, and, if entrusted with
drafts, must actually exchange them for specie and
pay out the specie only.
But what was the practice of both the government
and its agents as developed in Mr. Denby's case
Let the Washington Union tell us in its defence of
that gentleman
"The defalcation, whatever be its amount, was
casioned by robbery but by the commercial embarass
nent of house in Richmond, which transmit the
Government funds Mr. DENLY in France, and that house
ruined because Of the run in which the revolution in
France had brought down the house there to which
the Richmond house had made its consgnments 9he
drafts loeTe returned protested from France, and Mr.
Oenbys drafts shareda similar tate"
What drafts are these, of which the organ of the
late administration speaks SO glibly in its ustfca-
ton OF Ir Denby2 Treasury drafts? No, indeed.
They were drafts drawn by Mr.. Osborne the
houses in Europe to which he had consigned the pro-
duce which he purchased in this country with the
specie or Treasury drafts that were placed in his
hands. The government may not have known that
the funds We're thus applied to speculation {; but it
knew this perfectly well, that its navy agent, Mr.
DENLY, would never see either the money the
drafts which home agent received, and that his
disbursements at Marseilles would never be made
either in that Identical money, or in gold and silver
for which the drafts might be directly exchanged.
The whole arrangement, even if il had been carried
out without loss or danger OF loss was in direct
conlravention OF the Sub-treasury law, which al
lowed only one step in the way OF exchange, and
that was from Treasury drafts into gold and silver
at Marselles, and therefore distinctly forbade any
such thing as the use OF commercial drafts in ac-
counts between American and European houses
1t is idle to say that the disregard of the law to
which we now refer was unavoidable, for otherwise
the disbursements at foreign stations could not have
been made. That may be true but if the law is
nully from necessity, the friends of the late ad-
ministraton should at least have the grace to saw So
especially when they know that the penalty for lis
violation IS By its own terms, the penisntiaru and
members Of the Cabinet, no less than the NAVY
agents, come within its meaning. Let ii be known,
at all events to the people, that in all the foreign
transactions of the government the Sub-reasury
was no more regarded during -dr. Folks term than
if it never had existence; and this, Notwithstanding