1. Sections 13, 14, 15, 16, and 17 of “An Act making provision for the (payment of the) Debt of the United States” outlined the program for assumption by the Federal Government of state debts incurred during the American Revolution. These sections read as follows:

“Sec. 13. Be it therefore further enacted, That a loan be proposed to the amount of twenty-one million and five hundred thousand dollars, and that subscriptions to the said loan be received at the same times and places, and by the same persons, as in respect to the loan herein before proposed concerning the domestic debt of the United States. And that the sums which shall be subscribed to the said loan, shall be payable in the principal and interest of the certificates or notes, which prior to the first day of January last, were issued by the respective states, as acknowledgements or evidences of debts by them respectively owing, except certificates issued by the commissioners of army accounts in the state of North Carolina, in the year one thousand seven hundred and eighty six.

“Provided, That no greater sum shall be received in the certificates of any state than as follows; that is to say:

“In those of New Hampshire, three hundred thousand dollars.

“In those of Massachusetts, four million dollars.

“In those of Rhode Island and Providence Plantations, two hundred thousand dollars.

“In those of Connecticut, one million six hundred thousand dollars.

“In those of New York, one million two hundred thousand dollars.

“In those of New Jersey, eight hundred thousand dollars.

“In those of Pennsylvania, two million two hundred thousand dollars.

“In those of Delaware, two hundred thousand dollars.

“In those of Maryland, eight hundred thousand dollars.

“In those of Virginia, three million five hundred thousand dollars.

“In those of North Carolina, two million four hundred thousand dollars.

“In those of South Carolina, four million dollars.

“In those of Georgia, three hundred thousand dollars.

“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.

“Sec. 14. Provided also, and be it further enacted, 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 within the same. And every subscriber to the said loan shall, at the time of subscribing, deposit with the commissioner the certificates or notes to be loaned by him.

“Sec. 15. And be it further enacted, That for two thirds of any sum subscribed to the said loan, by any person or persons, or body politic, which shall be paid in the principal and interest of the certificates or notes issued as aforesaid by the respective states, the subscriber or subscribers shall be entitled to a certificate, purporting that the United States owe to the holder or holders thereof, or his, her or their assigns, a sum to be expressed therein, equal to two thirds of the aforesaid two thirds, bearing an interest of six per centum per annum, payable quarter yearly, and subject to redemption by payments, not exceeding in one year, on account both of principal and interest, the proportion of eight dollars upon a hundred of the sum mentioned in such certificate; and to another certificate, purporting that the United States owe to the holder or holders thereof, his, her or their assigns, a sum to be expressed therein, equal to the proportion of thirty-three dollars and one third of a dollar upon a hundred of the said two thirds of such sum so subscribed, which after the year one thousand eight hundred shall bear an interest of six per centum per annum, payable quarter yearly, and subject to redemption by payments, not exceeding in one year, on account both of principal and interest, the proportion of eight dollars upon a hundred of the sum mentioned in such certificate; and that for the remaining third of any sum so subscribed, the subscriber or subscribers shall be entitled to a certificate, purporting that the United States owe to the holder or holders thereof, his, her or their assigns, a sum to be expressed therein, equal to the said remaining third, bearing an interest of three per cent. per annum, payable quarter yearly, and subject to redemption by payment of the sum specified therein whenever provision shall be made by law for that purpose.

“Sec. 16. And be it further enacted, That the interest upon the certificates which shall be received in payment of the sums subscribed towards the said loan, shall be computed to the last day of the year one thousand seven hundred and ninety-one, inclusively; and the interest upon the stock which shall be created by virtue of the said loan, shall commence or begin to accrue on the first day of the year one thousand seven hundred and ninety-two, and shall be payable quarter yearly, at the same time, and in like manner as the interest on the stock to be created by virtue of the loan above proposed in the domestic debt of the United States.

“Sec. 17. And be it further enacted, That if the whole sum allowed to be subscribed in the debt or certificates of any state as aforesaid, shall not be subscribed within the time for that purpose limited, such state shall be entitled to receive, and shall receive from the United States, an interest per centum per annum, upon so much of the said sum as shall not have been so subscribed, equal to that which would have accrued on the deficiency, had the same been subscribed in trust for the non-subscribing creditors of such state, who are holders of certificates or notes issued on account of services or supplies towards the prosecution of the late war, and the defence of the United States or of some part thereof, to be paid in like manner as the interest on the stock which may be created by virtue of the said loan, and to continue until there shall be a settlement of accounts between the United States and the individual states; and in case a balance shall then appear in favour of such state, until provision shall be made for the said balance.” (1 Stat. description begins The Public Statutes at Large of the United States of America (Boston, 1845). description ends 142–44 [August 4, 1790].)

2. Smith is referring to Section 13 of “An Act making provision for the (payment of the) Debt of the United States.” See note 1. See also “Report on Certificates of Debt Issued After January 1, 1790,” February 25, 1791, note 1.

3. Section III of “An Act Granting Relief to Certain Creditors of the State and for Repealing Part of an Act, Entituled ‘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’” provided in part that interest to January 1, 1792, be marked on the back of the certificates of state debt and paid to the holder before the certificates should be subscribed to the Federal loan (Pennsylvania Statutes description begins James T. Mitchell and Henry Flanders, eds., The Statutes at Large of Pennsylvania from 1682 to 1801 (Harrisburg, 1896–1908). description ends , XIV, 77–78 [April 9, 1791]).

4. John Nicholson was comptroller general of Pennsylvania.

5. “An Act for the Further Relief of the Public Creditors who are Citizens of This State by Receiving on Loan Certain Debts of the United States of America and for Funding the Same and for Paying the Annual Interest of Such Loans and the Interest of Certain Debts of This State Every Six Months” (Pennsylvania Statutes description begins James T. Mitchell and Henry Flanders, eds., The Statutes at Large of Pennsylvania from 1682 to 1801 (Harrisburg, 1896–1908). description ends , XII, 158–64 [March 1, 1786]). For the provision concerning the return of “new loan” certificates to which Smith is referring, see Smith to H, February 14, 1791, note 1.

6. Letter not found.

7. In a resolution of September 9, 1777, Congress had provided that interest on loan office certificates issued after the date of the resolution should be paid in bills of exchange (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , VIII, 725). This offer expired on March 1, 1778. Certificates issued under the resolution, however, continued to receive preferential treatment. On June 28, 1790, Congress resolved that interest on these certificates be paid on the nominal value and the depreciated value be used only for purposes of redemption (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XVII, 568).

8. Francis was cashier of the Bank of North America from November 26, 1781, until January 12, 1792.