1st Session No. 52 EXPENDITURES MADE BY THE STATE OF CONNECTICUT FOR MILITARY PURPOSES DURING THE WAR OF 1812-1815 LETTER FROM THE COMPTROLLER GENERAL OF THE UNITED STATES, TRANSMITTING, IN RESPONSE TO SENATE RESOLUTION 67, A STATEMENT OF THE ACCOUNT BETWEEN THE UNITED STATES AND THE STATE OF CONNECTICUT WITH RESPECT TO ADVANCES AND EXPENDITURES MADE FOR MILITARY PURPOSES DURING THE WAR OF 1812-1815 FEBRUARY 8, 1928.-Referred to the Committee on Claims, and ordered to be printed COMPTROLLER GENERAL OF THE UNITED STATES, The PRESIDENT OF THE SENATE. SIR: There has been received Senate Resolution 67, Seventieth Congress, first session, authorizing and directing the investigation and reexamination of * * the account between the United States and the State of Connecticut with respect to advances and expenditures made by such State for military purposes during the War of 1812-1815 with Great Britain, and, after applying to such account the rules applied to the settlement of a similar account between the United States and the State of Maryland under the act entitled "An act authorizing the payment of interest due to the State of Maryland," approved May 13, 1826, as amended by section 12 of the civil appropriations act, approved March 3, 1827, to submit to the Senate a report containing a restatement of such account with interest computed according to such rules. Complying therewith I have the honor to report as follows: The account of the State of Connecticut to be reexamined and restated in accordance with Senate Resolution 67 is of loans obtained by the State for the use and benefit of the United States for war purposes during the War of 1812-1815, on which the State paid interest at the rate of 6 per cent, and of payments made on account thereof by the United States. With respect to the loans, documentary evidence has been submitted by the State treasurer's office showing dates and amounts of loans and the banks from which obtained during the period Novem ber 25, 1813, to April 14, 1815. Such evidence shows loans made to the State by three different banks as follows: The records show that the Government has made payments to the State as follows: Sept. 20, 1813 (warrant not shown) - Total... $3,000. 00 50, 000. 00 55, 923. 79 9, 145. 50 118, 069. 29 The $3,000 appears to have been a cash advance to the State to make expenditures for the United States, and thus is not involved in any claim of the State based on advances to be made from its moneys by reason of loans obtained from banks. Accordingly, such payment will not be taken into consideration in the computation of interest and stating of the account of the State for expenditures for war purposes for the use and benefit of the United States. The first payment by the United States on account of advances made by the State for war purposes was that for $50,000 made on March 11, 1817. The total of payments made by the United States to be taken into consideration in the statement of the account is therefore $115,069.29. Section 12 of the act of March 3, 1857 (11 Stat. 229), referred to in the resolution, is as follows: That the proper accounting officers of the Treasury be, and they are hereby, authorized and directed to reexamine the account between the United States and the State of Maryland, as the same was, from time to time, adjusted under the act passed on May 13, 1826, entitled "An act authorizing the payment of interest due to the State of Maryland," and on such reexamination to assume the sums expended by the State of Maryland for the use and benefit of the United States, and the sums refunded and repaid by the United States to the said State, and the times of such payments as being correctly stated in the account as the same has heretofore been passed at the Treasury Department; but in the calculation of interests due under the act aforesaid, the following rules shall be observed, to wit, interest shall be calculated up to the time of any payment made. To this interest the payment shall be first applied, and if it exceed the interest due, the balance shall be applied to diminish the principal; if the payment fall short of the interest, the balance of interest shall not be added to the principal so as to produce interest. Second, interest shall be allowed the State of Maryland on such sums only on which the said State either paid interest or lost interest by the transfer of an interest-bearing fund. The so-called Maryland rule stated in this section has been applied in the statement of accounts of various other States, such as New York and North Carolina, as to which attention is invited to my reports of February 16, 1923, under Senate resolution 378 of Decem ber 6, 1922, and of February 27, 1923, under Senate resolution 324 of July 22, 1922, respectively. The computation of interest in accordance with the requirements of said rule is as follows: $6,000 at 6 per cent from date of loan, Nov. 25, 1813, to date of first payment by the United States, Mar. 11, 1817; 3 years 3 months 14 days.. $50,000 at 6 per cent from date of loan, Sept. 27, 1814, to date of $7,000 at 6 per cent from date of loan, Oct. 11, 1814, to date of first $20,000 at 6 per cent from date of loan, Dec. 5, 1814, to date of $27,069.29 at 6 per cent from date of loan, Jan. 6, 1815, to date of first payment by the United States, Mar. 11, 1817; 2 years 2 months 5 days... Total interest_ Principal due... Principal and interest. Deduct first payment... New principal. - Second and third payments by the United States, being less than interest due, are not applied until interest is computed to Feb. 10, 1928, the date adopted for the purpose of this report. $81,573.18 at 6 per cent from Mar. 11, 1817, to Feb. 10, 1928; 110 years 11 months Total... Deduct total of second and third payments__ $1, 184. 00 7, 350. 00 1, 015. 00 693. 33 2,720. 00 3, 541. 56 16, 503. 89 115, 069. 29 131, 573. 18 50, 000. 00 81, 573. 18 542, 869. 51 624, 442. 69 65, 069. 29 Balance due the State of Connecticut, Feb. 10, 1928------ 559, 373. 40 It should be explained in connection with the above computation of interest, particularly the item of $27,069.29 upon which interest is computed from January 6, 1815, that the practice adopted under the Maryland rule, where the amount borrowed by the State is greater than the amount recognized as having been expended for the use and benefit of the United States by prior settlements of the accounting officers, loans are taken in order beginning with the earliest date, giving the State the benefit of interest from the date of the earliest loan. In the present case the first five loans total $88,000 and therefore there was taken $27,069.29 of the sixth loan, being the difference between $88,000 and $115,069.29, the total amount recognized by prior settlements of the accounting officers. In this connection attention is invited to the fact that the State of Connecticut is shown on the books of the Treasury Department as indebted to the United States in the sum of $764,670.60, representing the share awarded to that State of the total sum of $28,101,644.91 withdrawn from the Treasury of the United States and deposited with the several States under authority contained in the act of June 23, 1836 (5 Stat. 55) as amended by the act of October 2, 1837 (5 Stat. 201). The act of June 25, 1910 (36 Stat. 776), authorized credit to be given the Treasurer of the United States for the amounts for which he had been charged on account of moneys advanced to various States under the act of 1836, but the act also provided that the credit authorized should in no wise affect or discharge the indebtedness of the States, and that such credit should be given in such manner as to debit the respective States chargeable therewith upon the books of the Treasury Department until otherwise directed by Congress. No further direction has been given by Congress in this respect and the amount of deposits with the State of Connecticut is therefore carried on the books of the Treasury Department as an outstanding indebtedness of said State in accordance with the act of 1910. This matter is mentioned so that there may be taken whatever action may be deemed appropriate in connection with the account of the State of Connecticut. |