From Thomas Mifflin
[Philadelphia, December 27, 1791]
In order to enable me to answer your letter of the 21st instant, I directed the Comptroller general to furnish me with the necessary information upon the subject of your inquiry; and you will now receive an extract from his report.1 But as this may not be deemed satisfactory, I have given that Officer instructions to confer with you upon the subject;2 and, I hope, that after a full and candid communication,the inconveniency that you suggest, may be prevented, without claiming the interposition of the Legislature. Should you still think, however, that this step is requisite, it shall be pursued.
I am, with due consideration Sir Your most obed Hble Servt
To Alexr Hamilton Esqr
Secretary of the Treasury &c.
DfS, in the writing of Alexander J. Dallas, Division of Public Records, Pennsylvania Historical and Museum Commission, Harrisburg; LC, Division of Public Records, Pennsylvania Historical and Museum Commission.
1. John Nicholson’s letter to Mifflin, governor of Pennsylvania, dated December 24, 1791, reads as follows:
“In compliance with your Excellencys desire communicated by letter from the secretary of The Commonwealth of yesterday evening covering a letter addressed to your Excellency by The secretary of The Treasury of the United states dated the 21st Instant I report
|That The whole of The Certificates of
this state granted for a like sum of Certificates
of debt of the United states amounts to
|Of Which there was redeemed||£118.470.6.6.|
“By an act passed in March 1789. The holders of this balance are intitled on presenting their Certificates of this state and liquidating the interest recd thereon to receive back their former ones or an equivalent. This hath taken place to a great amount insomuch that there does not at present remain much unexchanged on a comparison of the whole. The exact amount at present unexchanged I cannot tell, a number of exchanges to the Amount of 40 or 50 presented are pending for want of the partys paying the indents due, the remainder I estimate from 40. to 50 thousand pounds if absolute precision be necessary, I will have the additions and selections made so as to give the sum exactly.
“When I read the letter of The secretary of the Treasury refered to aforesd. I was doubtful until I consulted it again whether it really imported that the interest payable quarterly on the Certificates granted on the assumed debt of this state, would be suspended until the Certificates of the Federal debt not yet exchanged for the new Loans as aforesaid should be surrendered or an equivalent in stock under the funding system, as such a case would prostrate the faith of the united states to the will of the Legislature of this state. If they should refuse to surrender them, then the united states (without any fault on the part of the original subscribers or the present holders) would not pay the interest they had issued their obligation for in which they promised payment. It appeared to me that if such were the law the public credit of the united states might be shaken by it and rendered precarious; but on turning to the law it will appear that the provision for returning the Certificates of The united states was to prevent the united states from paying the interest twice on the same debt and that in conformity thereto if any of the Certificates of this state commonly called new Loan debt had been be⟨fore⟩ the 1st of October last, when the Loan closed, subscribed to the sd Loan, it w⟨ould⟩ have been requisite before the stock had issued therefor that an equal ⟨sum⟩ should have been surrendered by the state as aforesaid. The state wo⟨uld⟩ thus have redeemed her Certificates thro the united states in the same manner at present practised for individuals. But no such certifi⟨cates⟩ of this state were subscribed—consequently the united states are intitled to none Of the Continental Certificates, which are demandable by the persons holding the new Loan. If they should be delivered to ⟨the⟩ united states this state might have to pay the new Loan Certificates without having this resource to do it with. I think too highly of the faith of the public to suppose, that the holders of new Loans are compellable either to subscribe them to the United states to re-exchange them for the Continental Certificates, or that to such as do not, the state are absolved from payment both of principal and interest, but the market value and the irredeemable quality of the Continental stock and the present funds of the United states are generally sufficient to induce the change as is evinced from the great quantity already so exchanged of the remainder some part is exchanged almost every day and if the Loan should be opened by Congress the exchanges would be encreased thereby.” (ALS, Division of Public Records, Pennsylvania Historical and Museum Commission.)
2. On December 27, 1791, Alexander J. Dallas, secretary of the Commonwealth of Pennsylvania, wrote to Nicholson: “The Governor has written to the Secretary of the Treasury of the U. S. upon the subject of his letter of the 21st inst. which was communicated to you; and having enclosed that part of your report, which states the amount of the New-Loan certificates issued, and redeemed, and the probable balance of the unexchanged certificates, he mentions, that he has given you instructions to confer with the Secretary of the Treasury in hopes that the difficulty suggested may be removed, without claiming the interposition of the Legislature. I am directed, therefore, to request your attention to the subject, and that you will communicate to the Governor, the result of the proposed conference” (Hogan, Pennsylvania State Trials description begins [Edmund Hogan], The Pennsylvania State Trials: Containing the Impeachment, Trial, and Acquittal of Francis Hopkinson, and John Nicholson, Esquires … (Philadelphia, 1794). description ends , 227).