Jared Ingersoll to Alexander J. Dallas5
Philadelphia July 28th 1792
Engagements at Court have prevented me from returning an earlier answer to your favor of the 23d instant.
I am of opinion that after the passing the act of Assembly of the twenty seventh of March 1789,6 and the other acts on the subject, the New Loan certificates ceased to be a State debt within the view of the Legislature, and could not consistently with those laws be recognized by the officers of the Federal or State government for any other purpose than re-exchanging them for Continental Certificates.
I am also clearly and decidedly of opinion that after the passing the above act, the New Loan certificates cannot be included within the description of the State debts directed to be redeemed and paid by the act of the tenth day of April 1792.7
The amount of Continental debt assumed by the State of Pennsylvania and for which New Loan certificates were given was about five millions of Dollars.
Part of this was redeemed by payments made at the Land office and other payments into the State Treasury in these New Loan certificates.
But the sum remaining of this class of certificates was much more than the amount of the sum 2,200,000 Dollars which the United States agreed to assume of State Debt for Pennsylvania.8
The State debt, what was originally and properly so called, and which the Legislature could only have had in contemplation when they made provision for such deficiency, as they considered to be left unprovided for the continental rule of assumption was about One Million or say 1,200,000 Dollars.
Suppose this sum to be, interest included, 1,200,000—the United States would give certificates as follows Vizt
|At 3 pCent per annum||400,000|
|At 6 prCent per annum||533,333—33|
So far as 6 per cents extend the State considered this as a full provision in satisfaction of the debt. But for the 400,000 Dollars three pr cent stock, the State considered it as only payment of one half, they therefore issued other three per cent stock payable by the State to an equal amount. And for deferred stock on which the United States pay no interest till the year 1801, the State agrees to pay interest annually at six per Cent per annum till that time.9
By the act of April last the State agree to redeem these assumptions from the holders of the debt, by paying ten shillings in the pound for the three per Cents, and thirty nine pounds per cent for the deferred part, being the estimated value of the annuity of six per cent per annum for the time limited.
This recapitulation of facts appears to me to suggest the solution of your second question.
If the New Loan certificates are brought in assumable by the United States, the sum may exceed the whole that Congress have agreed to assume, and our Assembly will have encouraged Measures for the exclusion of the whole of our State Debt from being assumed.10
Two motives may be supposed to have actuated our Legislature—First, To free the State from debt that in case of necessity they might anticipate their resources by Credit.
Secondly—Selling the three per Cent stock of the United States at twelve shillings and paying off their three per cent stock at ten shillings afords an obvious advantage in the deferred, no loss was suffered and therefore the balance in their favour remained.
On the New Loan certificates they were paying no interest, the Continental certificates furnished the means of redemption at any moment without expence, the reason of the law determines its extent, neither of these motives apply to the New Loan certificates, it is impossible that the State could have intended that they should be assumed by the United States or that they were in contemplation in the provision made by the act of April last.
To the third question11 I am not ready at present to give an answer—it requires some information which I do not possess but will endeavor to obtain.
I am Dr Sir &c
A. J. Dallas Esqr.
6. Ingersoll is referring to “An Act to Repeal So Much of Any Act or Acts of Assembly of This Commonwealth as Directs the Payment of the New Loan Debt or the Interest Thereof Beyond the First Day of April Next, and for Other Purposes Therein Mentioned” (Pennsylvania Statutes description begins James T. Mitchell and Henry Flanders, eds., The Statutes at Large of Pennsylvania from 1682 to 1801 (Harrisburg, 1896–1909). description ends , XIII, 263–67).
7. “An Act to Provide for Paying and Redeeming Certain Public Debts, and for Defraying the Expenses of Government” (Pennsylvania Statutes description begins James T. Mitchell and Henry Flanders, eds., The Statutes at Large of Pennsylvania from 1682 to 1801 (Harrisburg, 1896–1909). description ends , XIV, 305–12).
8. “An Act making provision for the (payment of the) Debt of the United States” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 138–44 [August 4, 1790]). See also Thomas Mifflin to H, December 27, 1791, note 1.
9. Ingersoll is referring to the provision made by “An Act Granting Relief to Certain Creditors of the State and for Repealing Part of an Act, Entitled ‘An Act for Furnishing the Quota of This State Toward Paying the Annual Interest of the Debts of the United States, and for Funding and Paying the Interest of the Public Debts of This State’” (Pennsylvania Statutes description begins James T. Mitchell and Henry Flanders, eds., The Statutes at Large of Pennsylvania from 1682 to 1801 (Harrisburg, 1896–1909). description ends , XIV, 76–79 [April 9, 1791]).
10. Section 14 of “An Act making provision for the (payment of the) Debt of the United States” reads in part as follows: “That if the total amount of the sums which shall be subscribed to the said loan in the debt of any state, within the time limited for receiving subscriptions thereto, shall exceed the sum by this act allowed to be subscribed within such state, the certificates and credits granted to the respective subscribers, shall bear such proportion to the sums by them respectively subscribed, as the total amount of the said sums shall bear to the whole sum so allowed to be subscribed in the debt of such state” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 143).
11. The third question which Dallas had asked at Mifflin’s request reads as follows: “Whether the New Loan Certificates being issued after the War and as the preamble of the Act of the first of March 1786, states for the relief of the patriotic Citizens of Pennsylvania, are excluded from the Loan proposed by Congress, by the words or spirit of the proviso, annexed to the 13th Section of the act of Congress of the 4th of August 1790?” (Pennsylvania Archives, 9th ser., I description begins Pennsylvania Archives, 9th ser., I (n.p., 1931). description ends , 429.) Section 13 of the act reads in part as follows: “And provided, That no such certificate shall be received, which from the tenor thereof, or from any public record, act, or document, shall appear or can be ascertained to have been issued for any purpose, other than compensations and expenditures for services or supplies towards the prosecution of the late war, and the defence of the United States, or of some part thereof during the same” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 143).