I have had the honor of your letter of the 29th of July last, which the press of business has prevented my sooner answering.

The Certificates to which you refer have not been admitted upon the Loan proposed by the Acts of Congress payable in evidences of State debt.

The following circumstances have attended the case.

Certificates of the description of those called New Loan Certificates of Pennsylvania, to the amount of 65,210 Dollars and 28 Cents, were offered for subscription under the Act entitled “An Act supplementary to the Act for making provision for the debt of the United States.”2

It appeared (a circumstance which had not come to my knowledge ’till after those certificates were so offered) that there was a law of the Commonwealth of Pennsylvania which rendered it questionable whether they could legally be considered as a subsisting debt of the Commonwealth, a quality necessary to their being assumeable; and an opinion of the Attorney General of Pennsylvania was communicated to me, shewing that he did not view them as a subsisting debt of the Commonwealth.3

This led me to state the case for the consideration of the Attorney General of the United States, who gave me an opinion that the Acts of the Pennsylvania Assembly of the 27th of March 1789, and of the 30th of March, and 1st of April 1790 abolished the Certificates in question as debts of the State, except for the purpose of being re-exchanged for continental Certificates; and therefore that the former, as wanting the due recognition from that State, could not be legally received upon loan.4

To this opinion I was about to conform and to direct the rejection of the Certificates offered to the Loan.

But having learnt that there was a probability of a judicial investigation of the point,5 I forebore to give a final instruction concerning it and left the matter suspended.

When the Commissioners were about to close the settlement of Accounts between the United and Individual States6 it became necessary to certify to them the amount of the debt of this Commonwealth which had been admitted upon Loan.7 The course pursued was to certify absolutely the sum which had been subscribed and finally admitted and to state in a note the amount and situation of the Certificates in question which had been offered to the Loan and not admitted. It is understood that this amount was not embraced in the statement of the Commissioners.

There has been no suspension of the Interest on so much of the debt of this Commonwealth as was subscribed and admitted upon the loan.

These circumstances amount to a virtual rejection of the Certificates to which your enquiry is understood to have reference.8

I state them particularly, that the precise course of the business may be accurately seen.

With the greatest respect,   I have the honor to be Your Excellency’s Most Obed’ and humble Servant.