From Charles Pettit1
Philadelphia 30th. April 1791
Pursuant to a Resolution of the House of Representatives of the Commonwealth of Pennsylvania, concurred in by the Senate, and approved by the Governor,2 I do myself the honor to apply to you for the balance remaining unissued of that part of the Bills of Credit which were directed to be issued on the credit of this State by the Act of Congress of the 18th. of March 1780.3 By a statement which I have received from the Comptroller General of the State, the balance thus remaining unissued is supposed to be 78,642 dollars. In order to give you the more full information of the intention of the Legislature in directing this application to be made, and of the terms on which I am directed to receive, and to give a receipt for the money, I shall inclose herewith a copy of the Resolution on which the application is founded. I have the honor to be, sir
Your most obedt. & most humble servant
Charles Pettit Commissioner
for the State of Pennsylvania
The Honble. The Secretary of the Treasury of the United States.
Copy, Division of Public Records, Pennsylvania Historical and Museum Commission, Harrisburg.
1. On June 24, 1791, the Supreme Executive Council of Pennsylvania elected Pettit commissioner to settle the state’s claims against the Federal Government.
2. This resolution, which was approved by Mifflin on April 13, 1791, reads as follows:
“Resolved, That the commissioner to be appointed, for the purpose of superintending the settlement of the accounts of the commonwealth with the United States, shall be empowered to apply to the Secretary of the Treasury for the balance of the emission of bills of credit, commonly called Dollar Money, which were to be issued by virtue of an act of the Legislature of Pennsylvania, entituled ‘An Act for funding and redeeming the bills of credit of the United States of America, and for providing means to bring the present war to an happy conclusion,’ passed on the first day of June, one thousand seven hundred and eighty; that the respective claims of the United States and of this State on that head be left to be adjusted upon a final settlement of the accounts between the United States and this State; and that the aforesaid commissioner be empowered and directed to give a receipt accordingly to the Secretary of the Treasury of the United States, upon his receiving the aforesaid balance.” (Journal of the First Session of the House of Representatives of the Commonwealth of Pennsylvania, Which commenced at Philadelphia, on Tuesday, the Seventh Day of December, in the Year of our Lord One Thousand Seven Hundred and Ninety [Philadelphia: Printed by Hall and Sellers—No. 51 Market-Street, 1790], 373.)
3. This resolution, which provided for the issue of bills of credit called “new emissions,” reads in part as follows:
“Resolved, That the several states continue to bring into the continental treasury, by taxes or otherwise, their full quotas of fifteen million dollars monthly, as assigned them by the resolution of the 7th of October, 1779; a clause in the resolution of the 23d of February last, for relinquishing two-thirds of the said quotas, to the contrary notwithstanding; and that the states be further called on to make provision for continuing to bring into the said treasury their like quotas monthly, to the month of April, 1781, inclusive:
“That silver and gold be receivable in payment of the said quotas, at the rate of one Spanish milled dollar in lieu of 40 dollars of the bills now in circulation.
“That the said bills, as paid in, except for the months of January and February past, which may be necessary for the discharge of past contracts, be not re-issued, but destroyed.
“That as fast as the said bills shall be brought in to be destroyed, and funds shall be established, as hereafter mentioned, for other bills, other bills be issued, not to exceed, on any account, one-twentieth part of the nominal sum of the bills brought in to be destroyed.
“That the bills which shall be issued, be redeemable in specie, within six years after the present, and bear an interest at the rate of five per centum per annum, to be paid also in specie at the redemption of the bills, or, at the election of the holder, annually, at the respective continental loan offices, in sterling bills of exchange, drawn by the United States on their commissioners in Europe, at four shillings and six pence sterling per dollar.
“That the said new bills issue on the funds of individual states, for that purpose established, and be signed by persons appointed by them, and that the faith of the United States be also pledged for the payment of the said bills, in case any State on whose funds they shall be emitted, should, by the events of war, be rendered incapable to redeem them; which undertaking of the United States, and that of drawing bills of exchange, for payment of interest as aforesaid, shall be endorsed on the bills to be emitted, and signed by a commissioner to be appointed by Congress for that purpose.…
“That the said new bills shall be struck under the direction of the Board of Treasury, in due proportion for each State, according to their said monthly quotas, and lodged in the continental loan offices in the respective states, where the commissioner to be appointed by Congress, in conjunction with such persons as the respective states appoint, shall attend the signing of the said bills; which shall be compleated no faster than in the aforesaid proportion of one to twenty of the other bills brought in to be destroyed, and which shall be lodged for that purpose in the said loan offices.
“That as the said new bills are signed and compleated, the states respectively, on whose funds they issue, receive sixtenths of them, and that the remainder be subject to the orders of the United States, and credited to the states on whose funds they are issued, the accounts whereof shall be adjusted agreeably to the resolution of the 6th of October, 1779.
“That the said new bills be receivable in payment of the said monthly quotas, at the same rate as aforesaid of specie; the interest thereon to be computed to the respective states; to the day the payment becomes due.
“That the respective states be charged with such parts of the interest on their said bills, as shall be paid by the United States, in bills of exchange; and the accounts thereof shall be adjusted agreeably to the resolution aforesaid, of the 6th of October, 1779.
“That whenever interest on the bills to be emitted shall be paid prior to their redemption, such bills shall be thereupon exchanged for others of the like tenor, to bear date from the expiration of the year for which such interest is paid.
“That the several states be called on to provide funds for their quotas of the said new bills, to be so productive as to sink or redeem one sixth part of them annually, after the 1st. day of January next.” (JCC description begins Journals of the Continental Congress, 1774–1789 (Washington, 1904–1937). description ends , XVI, 263–66.)
“New emissions” were not considered a part of the debt of the United States under the funding system; on the other hand, they could not be considered a part of the assumable state debt, since the states had already been given credit when they were issued. If they had been assumed by the United States, the Federal Government would have been charged twice for the same debt.
Specie certificates of the Continental Congress were generally given preferential treatment under the Federal Government. Although “new emissions” had been underwritten by the Continental Congress as redeemable in specie equal to their face value, they had been issued by different states at different values. The Federal Government did not accept the claims made by holders of “new emissions” and relegated to the states the redemption of these certificates.
In this letter Pettit is requesting the “new emissions” of Pennsylvania remaining in the Treasury Department in order to give an estimate of the number of these certificates still in circulation. The redemption of the remaining certificates in Pennsylvania was carried out under Section II of “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, 1896–1908). description ends , XIV, 307 [April 10, 1792]).