The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1881-04-16
MARYLAND STATE FINANCES.

ANNAPOLIS, Md, April 8, 1881.
The Hagerstown Mail having published
some statements in regard to the management
of the States finances, and particularly in
regard to the sinking fund, thorough exam
nation into the matter has been made, the
treasurer, Mr.. Barnes Compton, and the
comptroller, Mr.. Thomas J. Heating, afford
ing every facility desired of their offices and
books for the purpose. 1t was alleged by the
Mail that the sinking fund is a wreck, The
treasury officers show that there has been no
sinking fund worth calling fund since 1864,
when the necessities of the State to provide
taxes for interest on the defense loan bounty
for volunteers forced the managers OF its
finances to raid the sinking fund.
On the eth of March, 1864, the Legislature
passed an act for the reduction of the amount
of stocks of the State then held to the credit
of the sinking fund. On the S0th of Soptem-
Der, 1868, the whole of this fund amounted
to S5,664, 16S, in 6, 5, Al and 3 per cent.
stocks Under the act of 1864, chapter 2S5,
$4,000, OLA of the sinking fund stocks were
cancelled, leaving balance of 81, I55, O94 I'M
cancelled as a subsisting debt OF this bal
aRee, 1000, 544 were ) per cent. State stocks,
and Sl54, $50 Baltimore city 6 per cent bonds.
Mr.. II. ii. GOldsborough, the then comp
troller, in his report for 1864, says the stock
cancelled was that which became due at the
shortest dates and that which was overdue
Some sterling bonds, converted at 81 81 into
currency sto OK, added So, 600. and the total
to the credit of the sinking fund on the Both
of September, 1864, including cash, was ST.,
349, 7Sl. To this amount the treasury oti
GERS subsequently added $500, I56, but it
never recovered its former magnitude.
The Legislature, by act OF 1872, chapter
276, ordered the treasurer, then Mr.. J Ohm W.
Davis, to cancel and destroy 81, 7O4, ls7 State
stock, all thar remained of the sinking fund
At the same time. by act of 1872, chapter
3S3, the treasury officers were ordered to sell
the Sl54, $50 of Baltimore city per cent.
stock in the sinking fund. These directions
we're duly carried out by the executive Off
GERS of the treasury, and the acts ordering the
final extinction of the fund declared that it
was the interest of the State to pay off the
balance Of its sterling debt. STA, 600. consist
ing Of bonds issued for the benefit of the Sus-
quehanna and Underwater Canal, then past due
since 1865. aud TO pay off the baaace Of the
currency debt, S2l6sl7, consisting Of bonds
issued for the benefit OF the Chesapeake and
Ohio Canal Company. and then past due
since 1870. These debts were in turn taken
up and destroyed between 1872 and 1873
But while directing the cancellation of the
Stale stock held in the shaking fund in 1872.
the Legislature nj the same time directed the
comptroller every year TO set apart to the
credit of that fund 500, 600 Of any surplus
that may be IN the treasury over the expenses
Of tho government, which, in addition to all
sums otherwise accruing to the augmentation
of the sinking iaad. was appropriated to take
up the existing debt OF the State. The comp
troller was also directed to invest in stocks or
bonds Of the State al par or less Cor the sink
10 the overdae debt Of the State Under dis
eretionary power vested in them the treasury
officers from time 70 time Carried 70 the SINK.
ing fund such amounts as could be spared
trom the general funds of the treasury. AVID
also bought such stocks as they coaid Ia
1878 Sl52.l1l State stocks invested ia the
sinking fund were cancelled and DESTROYED
Ia 1876 the House Of Correction loan. Sll0.-
90, ana the Normal School loan, SIuJ, u10,
which had been purchased aud held ~ the
shaking fund, were canoe led aud DESTROYED
To the close Of the las. fiscal year there las
been added "a The sinking fund, since lbs de-
ssrucijoa IN 1872. the sun &C $Ia5.spJ in
State stocks, This amoIHt is al, that stood
10 the credit Of the isHd % the close Ct the
last fiscal year,
The tax imposed TO nseyi the iaicrest asd
10 provide iur the ultimate redemption gf the
House Of Correci'an ard Normal School loans
as required by the consultation. vas levied
oaly Tor the years 1874 and ISIS. The State
taxes Tor these two years was - ~ ceuts
on each sitQ II the assessahle basis IT, 1870,
when the tax on these tao loans aas drop
ped, the rate FELL TO Ia cents. and uas not
Increased uHul the creation 81 ibs treasury
relief loan, S5O0, COO. Ia lsss when iI was
advanced ceuts, making the rate 81 cents.
% present. IS = sgi-oh 20 ihsz treasury
relief loan % siii .se remembered the State
has acquired IN the settlement Nth the tian.
B0fe and OHIO Railroad COmpaay SGSe, 90
bonds Of thai company paying g per ccRi. ia.
terest
The defense loan. the necessity FOR whirh
ia 1864 Inspired The Legislature 10 ecaaota, xe
taxation by eSuuzslshiag 50 lasza q par; II
the sinking fund state stocks, bears 6 per
ceut Interest aud mAiafcs Ia lsSI L. tasal
Is IS $50, 60 and the Legislature II lss1 las
authorized three miilioas 81 i t,,,lse refunded
~ = rate Of inierss, not above a per cent
rcdermab.r Ia 10 yrars. Il Is bclirse4 ibi.
loan may be refunded al Z per ee4g, shich
ALL Be a SAVING sf STD. 90 = year lac OILY
past due debt of the Safe OF Mars AID -
80 90 per cent. carreuey aog3s 4hich leil
due "a iss3 and IS nos advertised to be paid
OF the trst OF ghis month. afteF shieh iiaae is-
tercsi ceased No osi,er debt all mature
uaul 1855. lhu entire debt al the State for
which interest has to be proyided Is sll,a79,
ii0. Which. less SS.6tg. fl2 productive iuvrss.
meats. leaves an actual debs OF hurfhea on
the treasury OF 81 size
While IN no way responsible Tor the tnan-
eiai Foiicy Dictated % them by u xisiaiiou and
the iorce 81 Circumstances. the prcsenl siIi,
GERS OF the treasury ,hiBk that the amouni u
debt redeemed, cancelled and paid since 1872
Is q fair offset 70 what Wsaid have been is the
sinking fluid under another policy aud 4 heavy
barthen u taxes. Ia SIX year. from is13 10
1875, inclusive, the Treasury has fout.d cash
10 redeem 81, los, $40 81 tkc debt Of the State
ana stop the taxes on il for interest This
debt Iaciuded the S551,0O0 Susqlehapua aai
HdeW&ier sterling bonds,
In bis very frst report. 1875, Comptroller
Heating uses this language The system Of
financial legislation ia the Stale of Magyla and
has for years smbodied 10 0ur organic Law
aad ogr legislative enuctnlrHts the idea thar
especial iuuas musl lie raised for aad dr,is-
Gated to special purposes, and thai the gen
eral treasury must take care Of itself II has
been aud always wili be utterly Impossible 10
maintain aud sgppoIl zny government legally
and at the same tune economically upon such
5 system; and where il Is imposed By Las,
either organic or statute, upon the financial
and executive sllecrs Of the government,
they must either disregard the credit Of the
Stale for the system, or disregard the system
by continually borrowing from one or the
other of those special funds to keep mp the
credit Of the Stale. Such a. alternative may
be and Is keeHly felt by these who have TO
face it as embarrassing IN The extreme, and
yet there has hardly been day ior many
years that the credit, faith and fiuascial in,
tegrily Of the State Of Maryland has not been
maintained by her financial aud executive
officers under just such embarrassment
Were the special funds pledged by law to par
iienlar objects, and forbidden by Law TO be
used except as pledged, set apcr; and net an
piled to other objects the government would
10 the best Of times come 10 dead halt for
want Of available funds, VITA q plethora OF
the peoples money lying idle. The treasury
officers, out OF proper regard for economy
and the necessities of the treasury, have hith-
ert0 utilized these funds in the way indicated,
and relied upon a just aud discriminating
public sentiment for heirjHStihcaiion.
In his last report, ia referring TO the fact
that the State has not had for years any Spe-
efaL sinking fond, and that under the act of
1872, chapter 2l6, all the State stocks 10 the
general sinking fund we're destroyed, he says;
..Sinee then neither expedlency nor economy
has prompted-indeed the needs of the treas
ury and the law of necessity have forbid-ihe
application of the loan. taxes 10 the purchase
OF securities, at heavy premiums, to be set
aoart for the redemption of the loans when
due, and these taxes have been absolutely re-
qured and used TO meet the current appro'