Report on the Petition of William Smith, [28 March 1792]
Report on the Petition of William Smith
[Philadelphia, March 28, 1792
Communicated on March 29, 1792]1
The Secretary of the Treasury, to whom was referred the petition of William Smith of Baltimore Town in the State of Maryland,2 respectfully submits the following Report:
The resolutions of the United States in Congress assembled, which respect the issuing of the Certificates commonly called Loan Office Certificates, make it necessary, that they should be previously countersigned by certain officers, denominated Commissioners of Loans, who were to be appointed under the authority of the particular States.3
After diligent inquiry within the State of Georgia, no evidence has been obtained, either of the appointment of E. Davies,4 (the person by whom the certificates in question were countersigned) to the office of Commissioner of Loans for that State, or that he was ever known or reputed to have acted in that capacity. The reverse of this, indeed, appears, from various communications to the Treasury, copies of which are contained in the Schedule herewith submitted.5
It is to be remarked, that E. Davies does not even stile himself, Commissioner of Loans, but, instead of this, adds to his signature, the words “by order of J. A. Frutler,6 Governor of Georgia.”
The Certificates, however, are signed, by the proper officer, and all such as have appeared are genuine; and interest, as alleged in the petition, has been paid upon them by the late Treasurer of the United States,7 as in other cases.
A number of those Certificates have been offered to the present Commissioner of Loans for the State of Georgia, to be subscribed. pursuant to the Act making provision for the debt of the United States,8 and upon a reference to the Treasury by that officer, have been directed to be refused.
The reasons for this direction are substantially, as follow.
The certificates in question having been irregularly issued, and without the requisites prescribed by the Acts of Congress, were of course, in the first instance, not obligatory upon the United States.
The subsequent payment of interest upon them, by an executive officer, without the sanction of any order or resolution of Congress, could not confer validity upon a claim, originally destitute of it; it might occasion hardship to individuals who, upon the credit of that payment, may have been induced to become possessors of those certificates for valuable consideration.
There are examples of the payment of interest, by the mistakes of public officers upon counterfeit and forged Certificates. It seems to be clear, that such payments cannot render valid, or obligatory, certificates of that description. And yet a similar hardship to that which has been mentioned, would attend those, who may have afterwards become possessed of them for valuable consideration. Nor does there occur any distinction between the effect of such payment in the one and in the other case.
Between individuals, the payment of interest by an Agent, upon the presumed, but not real obligation of his principal, either through mistake or otherwise, without special authority of the principal, could certainly give no new validity to such an obligation. And the same rules of right, which govern cases between individuals, appear to be proper guides in cases between the public and individuals.
These considerations were deemed conclusive against the admission of these certificates under the powers vested in the officers of the Treasury. It remains for the Legislature to decide, how far there are considerations strong enough to induce a special interposition in their favor.
In making this decision, the following circumstances will, it is presumed, appear to deserve attention.
The present is not a case of mere informality. There is no evidence that the certificates were issued for any purpose of the United States. The contrary, indeed, is stated to be the fact.9
Their amount is not positively ascertained, no account of issues having ever been rendered, though there is no appearance of any considerable sums being afloat.10
All which is respectfully submitted.
Alexander Hamilton,
Secy. of the Treasy.
March 28th: 1792.
Copy, RG 233, Reports of the Treasury Department, 1792–1793, Vol. III, National Archives.
1. , 554. The communicating letter, dated March 28, 1792, may be found in RG 233, Reports of the Treasury Department, 1792–1793, Vol. III, National Archives.
2. On December 26, 1791, “A petition of William Smith, of the town of Baltimore, was presented to the House and read, praying that he may be allowed to fund certain Continental Loan Office Certificates, which were issued in the State of Georgia, some difficulty in receiving them having arisen with the Comptroller of the Treasury.
“Ordered, That the said petition be referred to the Secretary of the Treasury, with instruction to examine the same, and report his opinion thereupon to the House.” (, 481.)
Smith, who was a merchant, had been a member of the Continental Congress during the American Revolution. He served as a Federalist member of the House of Representatives from Maryland during the First Congress.
3. A resolution of Congress of October 3, 1776, for establishing the loan offices reads in part as follows: “That for the convenience of the lenders, a loan office be established in each of the United States, and a commissioner, to superintend such office, be appointed by the said states respectively, which are to be responsible for the faithful discharge of their duty in the said offices …” (, V, 845).
On January 17, 1778, Congress “Resolved, That ten millions of dollars be borrowed on the credit of the United States, at an annual interest of six per cent. and that loan office certificates of the following denominations be forth-with struck, under the direction of the Treasury Board, (signed by Michael Hillegas, Esqr. treasurer, or Samuel Hillegas, and countersigned by the respective commissioners who shall borrow the money) …” (, X, 59).
4. Edward Davies had served as deputy postmaster in Savannah. See Jonathan Burrall to H, March 26, 1791.
5. For the enclosures to this report, see Richard Wylly to H, May 17, June 13, 1791. The third enclosure was an extract of a letter from Wylly, who was commissioner of loans for Georgia, to William Simmons, principal clerk in the auditor’s office, dated August 31, 1791 (copy, RG 233, Reports of the Treasury Department, 1792–1793, Vol. III, National Archives).
6. John Adam Treutlen was governor of Georgia during the year 1777. In May, 1780, a fire destroyed the official records of the executive and treasury departments of Georgia for the period from May, 1777, to January, 1778.
7. Michael Hillegas had served as treasurer of the United States from 1776 until the new Treasury Department was organized in 1789 (, Claims, I, 465).
8. “An Act making provision for the (payment of the) Debt of the United States” (1 Stat. 138–44 [August 4, 1790]).
9. According to one contemporary, Davies was a temporary agent of Georgia for the purchase of Indian goods (, Claims, I, 174).
10. On May 10, 1792, at a meeting of the agents of the Ohio Company in Philadelphia, it was resolved: “… that it be intirely in the Direction of the Treasurer to sell or retain the Loan Office Certificates Countersigned E. Davis as he shall think most condusive to the Interest of the Company—Provided always that the Sale of the said Certificates, Shall be made on such conditions as not to subject the Company to refund the proceeds of such Sale if the Certificates shall not prove obligatory on the U. States.” The question of the certificates signed by Edward Davies was finally settled in 1870, when the Supreme Court decided against the treasurer of the Ohio Company in a case he had brought for the Ohio Company against the United States (Archer Butler Hulbert, The Records of the Original Proceedings of the Ohio Company [Marietta, 1917], I, cxxxvi; II, 133–34.)