Mr. Williams to Mr. Seward
Sir: Your dispatch No. 214, of September 13, 1867, relating to the indemnity fund, was received by Mr. Burlingame at Shanghai, but owing to the difficulty of postal communication I did not receive it till the 24th of January. I soon after wrote to the depositary at Kong Kong to inquire when the remainder of the fund could be moved without loss of accruing interest, but have not received an answer; for I wished so to time the orders on the bank that the interest payable on the fixed deposit should not be lost, which would be the case if presented before the time had expired. It seemed to me undesirable to lose some $2,500 in this way; and, moreover, it may be that, by the month of July, when I expect to receive the final account, the rate of exchange will be more favorable [Page 511] than at present. The portion used for building purposes will also be sent at the same time, and as your dispatch mentions no particular time to do so, and specifies no purpose for which the money is wanted, I hope that no inconvenience will be suffered by the short delay. I trust that you have duly received the account and advices from Messrs. Olyphant & Co., accompanying the remission of the bills for the $220,000 at various dates up to December 1, 1867.
In the dispatch now acknowledged, when speaking of the application of part of this fund to building purposes, you refer to my explanations given in the letter sent last spring, and I fully appreciate the favorable terms in which you mention them. Yet, in view of your remarks, a reperusal of my letter of March 12 leads me to think that I failed to state my reasons fully. You say that you “cannot find any warrant in law for the appropriation of the interest or principal” to erect these buildings, and I did not suppose there was. No law existed, that I knew of, applicable to the case. The chief diplomatic agent of the United States had been left in charge of the fund from the first; he had some years ago removed it from the Commercial Bank to the Oriental for greater security, and when I decided to apply a part for building, one motive was the still greater security of what was so used. The Commercial Bank had failed, the Agra Bank was tottering, several large English houses had gone down, and it was known that the Oriental Bank had suffered heavy losses in India.
In this state of things, such an investment seemed to be one of the safest modes of placing the money, which I supposed at the time was not likely ever to be removed from China. It seems to be due to myself to bring this again to your notice to show that I had the best interests of the fund in view, as well as to provide a residence for the representative of the United States. I still cherish the hope that this surplus fund will be set apart by Congress for the promotion of learning among this people, by founding an institution in this city, as has been, already set forth in former dispatches.
I have the honor to be, sir, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.