Port Tobacco times, and Charles County advertiser., 1857-06-11
r.. .From the Baltimore Sun.
THE FUNDED DEBT OF MARYLAND,

ETC.
Some statements upon the subject of the
finances of Maryland have been extensively
copied by Maryland newspapers and credited
to the "Bamkers' Magazine" which are not
altogether accurate, and calculated to mislead
the public mind Neither the nominal nor
the actual debt of Maryland is correctly
given-the nominal debt being greater and
the actual debt much less than is therein
stated.
The cond ton and operation of the fund
ed debt of Maryland are somewhat compli-
Gated and difficult to explain in brief terms,
but the results can be given with tolerable
accuracy and precision.
The nominal debt of the State on the 30th
of September, 1856, as given in the treasu-
ry report, was S15, ,159, ,692 81, being an
increase over the debt reported in Septem-
Der, 1855, of $26,7SS 50, Notwithstanding
1921 ,433 81" of the funded debt was
':called in and redeemed on the 1st of De-
cember 1855, leaving the nominal debt, at
that date, only ''$14,921 ATS &c." All
the sterling bonds converted into currency
bonds since 1847, were, in the last report,
for the first time entered in the treasury
statement at.their actual value, as it appears.
The constantly increasing figures of the
nominal State debt are not fully explicable
and satisfactory to the popular view, the
reasons therefor never having appeared in
print-but it may be thus explained:
Of the funded debt of this State there re-
mains unconverted 81, 200, ,555 81 of per
cent sterling bonds, the semi-annual inter-
est of which Gas we'll as the principaD is, by
the conditions of said bonds, payable in
London; that is, the interest and also the
cost Of sending it to London, are to be paid
by the State The cost of remitting said
interest varies from 9 to 10a per cent, ac-
cording to the rate of exchange on London,
and l per cent additional for commission
1t is usual at the treasury to estimate the
cost at II per cent The annual interest
on the above amount of sterling bonds at 5
per cent is $3.50, ,027, and it costs the State
$43, ,205 annually to send it to London,
which is equivalent to paying interest at 5
per cent, upon an additional debt Of 1864,
900. The additional cost of redeeming the
principal of the bonds in London when due,
at the same rate Of exchange, &C., will be
1864 600 So that the State debt is to be
estimated for the purposes of annual taxa
ton, as well as ultimate redemption at near
ly million of dollars more than is repre-
sented by the reported figures.
By the act of 1S47, the persons owning
or holding sterling bonds which are cal
culated at 81 A 40 to the pound-can at
their option have them exchanged at the
State treasury for currency bonds at 81 81
to the pound-the difference being consid-
cred equivalent to the rate of exchange, &c.
The interest upon the currency bonds is pay
able quarterly at the treasury, or rather by
the State agent in Baltimore city, and the
principal is of course also made redeemable
here.
1t is by the conversion of sterling into
currency bonds, made as above stated, that
the figures Of the nominal State debt will
continue to increase from year to year, SUBJ
ject to any reductions made by portions of
the debt being cancelled and retired
Notwithstanding The objections sometimes
made to the act Of 1847, chapter Al, on ac-
count of the apparently. high premium it off
ers for the exchange of sterling bonds at
81 A 40 to the pound into currency bonds
at 81 81 to the pound, the conversion of the
whole of the existing amount of sterling
bonds into currency would increase the fig
ures Of the nominal debt only about $780,
900, instead of 1864, 900, which represents
the principal of the present cost of exchange,
&c. The State would therefore gain by the
operation of said law about 1921, 900, and
the annual interest thereon. This rate of
S. 81 is subject to any change hereafter to
be made in the act of Congress which fixes
the present value of the pound sterling at
that amount.
That provision of the law which makes
the interest and principal of the 5 per cent.
. sterling bonds payable in London, involves
an additional cost to the State as follows
The whole amount of bonds originally issu-
ed was S8,859, ,222 o. The per cent.
annual interest thereon is S442, ,286. The
cost of sending that interest to London an
nually, at II per cent. exchange and COM
nilsson, is $53, ,103; cost of exc hange, &C.,
on annual interest, for fifty years, the time
the bonds have to run, is $2,655, 166; the
cost Of exchange, &C., on the redemption of
the principal when due, is ST. ,062, $780,
The total additional expenditure to the State
OF making tne prlnclpaI ana interest payable
in London instead Of at the State treasury
is therefore $3,718,032.
The above explanation as it respects in
terest, is subject to the operation Of the law
of 1888, by which the Baltimore and Ohio
Railroad Company are required to pay the
interest in London on So, 200, 900 of the 5
per cent sterling bonds, as also the cost of
exchange and commission thereon.
The remainder of the funded debt of the