and dispose of every question suggested by the condition of our public affairs, in a manner satisfactory to all parties interested.

In estimating the extent of the obligations of the people of Maryland for which provision is now to be made, we must include a portion of the public debt of the city of Baltimore; because, to the extent of the contributions of the people of that city to pay the interest on their own internal improvement debt, their means to meet the necessities of the State government are necessarily diminished. Of the whole debt of that city, $4,830,000 were borrowed by authority of the Legislature, to prosecute the system of internal improvement. This large sum being invested in stocks, yielding little or no dividend, the corporate authorities of Baltimore are compelled annually to levy $270,000 to pay interest. In addition to this, an annual tax is paid for municipal purposes, analagous to the contributions of the people of the several counties for local objects. To decide rightly then, as to the capacity of the people of the whole State to endure the taxation necessary to maintain the public credit inviolate, we are to form an aggregate of this internal improvement debt of our commercial emporium, and of the unproductive investments in road and canal stocks, made by those who have acted directly under State authority.

The public debt of the State is $15,211,393.94;-deducting from this sum $3,200,000 for the bonds issued to the Baltimore and Ohio Rail Road Company, and $1,000,000 for the subscriptions of the State in the stock of the Baltimore and Ohio and Baltimore and Washington Rail Road Companies, and certain other amounts, considered by the Treasurer as not now chargeable upon the Treasury, and we have $10,000,000, of the State's debt, bearing an annual interest of $600,000 for which we are to make provision. To this is to be added, $4,870,000 for the internal improvement debt of Baltimore, and there is then ascertained, a public debt of $14,830,000 with an interest of $870,000, annually chargeable on the whole property of the State, assessed at $196,751,148.98, requiring a permanent tax of 71 cents in the hundred dollars for the city of Baltimore, and of 31 cents on the hundred dollars for the residue of the State.

Besides this amount of permanent debt, there is due to the Banks of the State $128,203,—to Messrs. Baring of London $104,864, and to holders of the State bonds $626,589, making $859,656 payable on the first day of December 1842, for interest in arrear.

The Legislature at an extra session holden in April 1841, authorised the levy of a direct annual tax of 20 cents in the hundred dollars, and, at Dec. session of the same year, authorised an additional tax of five cents in the hundred dollars, the whole for the years 1841-'42, amounting to $885,380, and made payable by instalments into the Treasury by the first day of March 1843. Of this amount the Treasurer has received the sum of $262,994.52; the city of Baltimore and each of the counties in the State, except Worcester, Somerset and Calvert having paid a portion of it. The Treasurer has paid this sum to the Banks of the State on account of advances made by

them to the Treasury, thus reducing their claims to $128,203, as before mentioned, and leaving a balance of $622,386 due, and payable to the Treasury on or before the first day of March 1843, and applicable to the payment of the $859,656 for interest in ar

rear.

In this aspect of the condition of the public finances, all reference to the income of the State other than that to be derived from the direct tax, is purposely omitted, the Treasurer being satisfied that, the revenue from other sources will not exceed the amount required to defray the ordinary expenses.

Taking this view of the debt and resources of the State, the Senate and House have the opportunity to determine, whether the existing assessment laws require any modification; and, whether an increase of the direct tax can be looked to as a means to maintain the public credit. It is presumed, that it cannot be the purpose of the Legislature to compel, by the policy of its enactments, the destruction or conversion of the capital of the tax payers, as that would inevitably, and soon exhaust the sources of revenue. Assuming then, that the taxes are to be paid out of incomes and profits, it may be well to consider, whether instead of adding to the direct tax, at this time, it would not be proper to extend indulgence, by prolonging the time, within which, taxes now due, are made payable.

The payment into the Treasury, as is now by law required, of $622,389, between the first day of December, 1842, and the first day of March, 1843, a period of three months, is equivalent to a tax made payable in twelve months, of one hundred and twentyfour cents in the hundred dollars. If, in the exercise of a benignant indulgence that seems to be called for by the character of the times, the Legislature should extend the period within which these large exactions for public purposes are to be raised, to the end of the present fiscal year, still, the incomes and profits of the people of the State would be so much reduced as to make the strictest economy with all, and serious privation with many, necessary and unavoidable. For it must be remembered that, in addition to the large sum due and payable on the first of March next, existing laws and the wants of the Treasury demand, that a further sum of $491,877, shall be collected by the first of December 1843. By adding this last amount, being the tax of twenty-five cents in the hundred dollars, payable annually under acts of April and December sessions of the year 1841, to the $622,389 due on the first of March next, in pursuance of the same laws, and the $270,000 annual internal improvement tax of Baltimore city, we discover $1,384,266 is to be paid within the year, equivalent to a levy of ninety-seven cents in the hundred dollars for Baltimore, and of fifty-seven cents for the State at large.

From what has been said, it is apparent, that it was the design of the Legislature to provide for the payment of the whole interest in arrear on or before the first of next March; and it is equally

manifest, this object will not be accomplished. The interest in arrear is, as already stated, $859,656, and the revenue intended for its payment being only $622,386, there will be a balance of $237,270 chargeable on the assessment of 1843. To this we are to add $600,000, the anticipated deficit in the Treasury for the year 1843, making $837,270, and from that sum to deduct $491,877 the revenue to be expected from the direct tax for the same year, and there will be a balance of $345,393 to be provided for.

As the sinking fund may be looked to by some, as a source of supply to the Treasury, it is proper to state, that of this fund $1,158,476 is invested in the bonds of the State, and that the balance of $20,856 alone could be made available.

The general stagnation in business, the depression of prices, and diminution in the amount of the currency, naturally lead us to inquire as to the policy of providing a medium, that would facilitate the payment of the very large amount of taxes to come into the Treasury within the present fiscal year. Neither inconvertible paper, nor an increase of the bank issues are to be thought of. But it may not be considered inexpedient to authorize the tax-collectors to take in payment of the public dues, the coupons of the State bonds, and certificates of the commissioner of loans for interest, which it is proposed to pay out of the revenue to be collected. These evidences of debt are now much below their nominal value. They may be purchased by capitalists at present prices, and as the means for their ultimate payment are provided, the holders hereafter are to make a valuable speculation. If a certain portion of them were made serviceable in the payment of public dues, to be destroyed by the Treasurer upon being received, every tax-payer could become a purchaser; the price of them would be increased by competition in the market, and the burthen of the taxes would be diminished to the extent of the difference, between the sum paid to the holders of claims for interest, and the par value of such claims. In the event of such a policy being adopted, it would be necessary, of course, to classify these claims against the Treasury, so as not to have those receivable in any one year to exceed the amouut of revenue payable within the same period. The expediency of authorizing the Treasurer to use the bank stocks of the State by their transfer to its creditors, to meet the current demands upon the Treasury, is entitled to consideration. Such a measure would effectually separate the State government from the banking corporations, and in dissolving that alliance be productive of much good; and to the amount of the bank stock relieve the people from heavy and burdensome taxation. It does not seem to be sound policy to lay taxes to pay interest while we hold perishable capital that may be rendered, by mismanagement here-after, entirely unavailable. To guard against unnecessary sacrifice, a minimum price could be fixed upon the stock.

I have no means of ascertaining what revenue may be expected for this year, (none having been received for the last,) under the

mation, inquiries were addressed to the officers having charge of their execution, and their replies will be submitted for your consideration.

If the law requiring licenses to be taken out by brokers is to be persevered in as a means of raising revenue, a modification of its requirements is indispensable, inasmuch as the sum demanded is so high as to preclude persons from applying for them. The income tax law needs, also, a declaratory statute to ensure to its provisions an uniform construction.

It is impossible to contemplate this condition of affairs without wonder and surprise, that, a prudent and economical people, enjoying justly a high character for the punctilious performance of all engagements, public and private, should be involved in a few years, in debts so enormous. In 1830 the State was in full possession of the means from its ordinary revenue, to meet promptly all its liabilities. About that time, the policy of internal improvement which promised to overwhelm the general government with debt and taxes, was undergoing a most strict and rigid examination. Public attention was directed intently, to the deliberations of Congress on the subject, and a public opinion, deep, strong and resistless, formed against the whole system, as equally premature, unwise, inexpedient and unconstitutional.

The veto of the then President on the Maysville and Rockville roads, and his triumphant re-election in 1832, were hailed as indications that, the day was yet distant, when the people of the United States were to be made to feel, that no form of government can be considered a guaranty for the peaceful enjoyment of the rewards of industry. Those who were administering the government of the Union, in all its departments, heeded the admonitions given by their constituents at the elections, and a course of measures in accordance therewith, eventuated in the payment of the whole national debt, in the reduction of taxes, and in the accumulation of a surplus of revenue of $28,101,644.91 which was afterwards distributed to the States. Unfortunately for this illfated State, every department of its government was under control of those holding opinions, which had been condemned by the judgment of the whole country. They refused to abandon altogether, an extravagant system of roads and canals that cannot be consummated in a country like the United States, where population is scattered and sparse. Measures were taken to place Maryland in the van of those States ambitious of rivalling Great Britain, Holland, and other countries where the population is crowded and dense, and where their vast numbers justify large expenditures to facilitate intercourse. In the short space of seven years succeeding the veto of the President, our State debt was augmented more than twelve million of dollars. Within the same period, other roads and canals were projected, until, (it will seem incredible now when the public mind is perfectly sobered,) we beheld the little State of Maryland, having ten thousand square

miles of territory, and 318,194 white inhabitants, staggering along with undertakings that would task the financial resources of the whole kingdom of Great Britain, clothed as it is with power, by means of its standing armies, to extort for public purposes, from the hand of industry, every dollar it has earned.

We were, at one and the same time, projecting or constructing a rail road to Annapolis, a rail road from Baltimore to Washington, a rail road from Baltimore to the Susquehanna, a rail road on the Eastern Shore, a rail road from Baltimore to the Ohio, and a magnificent canal from tide water on the Potomac to the Ohio river. If the people of the State had then comprehended, as they do now, the means by which this grand system was to be conducted, it is not to be doubted, but that they would have risen in their strength and have swept from power, everywhere, all its authors. Or, if the unfortunate purchasers of Maryland bonds had then understood, as most of them now understand, the financial measures devised to ensure the punctual payment of interest promised upon the face of them, speculators and their speculations must have been arrested, for no one would have been hardy enough to make investments of his capital in securities, for the payment of the interest on which, no suitable means had been provided.

There was a time when no statesmen would have risked his reputation by proposing to contract a public debt, without at the same time levying a tax to pay the interest, and eventually to redeem the principal. It was considered but just to levy the tax, that those who were to pay the debt might have full and distinct warning as to the extent of the obligations they were entering into; and, it was esteemed equally just to do so, that the public creditor might make his investments on a sure foundation, and with a perfect understanding of their character. This salutary rule was disregarded by those who had charge of our public finances. They depended for the payment of interest upon contracts, entered into with the various companies to which bonds had been issued, and those companies relied upon the remote and very contingent possibility that the works projected, would when completed, afford an income to pay interest on the cost of their construction. By this proceeding both the tax-payers and the public creditors of Maryland have been misled; and now, the alternative is presented of repudiating our debt, or, of submitting to the exactions of the taxgatherer.

Such was the indignation of many, when first awakened to a true conception of the whole subject, that a strong disposition prevailed to deny all obligations to pay the debt, on account of the absence of constitutional power in the Legislature to contract it. In support of this opinion, the thirteenth article of our Bill of Rights, (which is declared to be a part of our Constitution,) is mainly relied upon. It is not obvious that it will bear such a construction. And moreover, it is not clear that it would be right now to interpose such an objection to the payment of the debt, since the people of the State have year after year, from the various counties and