Year: 1864

SlhIh IhhhSu hbh y hhEUhI.
We have received a copy of the report &C
Mr.. McGrath, the State Sreasurer After
showing the financial condition of the State
Treasury, which has already been given in
| the Governor message, he says:
The subject of the payment of the interest
on the public debt of the State is one which,
from its Importance, ought TO receive your


early and earnest attention.


For the last two years, and including the


amount due on the lst instant, the interest


has been paid in specie or its equivalent,


through means furnished by the banks of
the Commonwealth In 1862, under the


act of April Ilth of that year they were re


quired to pay into the Treasury their ratea-
bic proportion of such premium for gold, or
It's equivalent, as had been actually paid by


the State. During the last year, under the


provisions Of the act of June 30th, 1868,


they were required to exchange with the


Commonwealth sufficient amount of coin


for currency TO pay the interest on the State


debt; and the State Sreasurer was author


lied to issue to them specie certificates of


exchange, not transferable, pledging the


faith of the State to return said coin and re-


exchange for notes current at that time, on
or before the first Monday of March, 1864,


said certificate to bear interest at the rate of


% per cent per annum.


Under the provisions of this act the


Commonwealth has exchanged with the


banks currency for coin, amounting to 81,


96S, Asa 81, the interest on which, due the


banks on the lst Of March, 1862, will amount
to S4l ,04O Is. To return this amount in


coin at the present market rate for gold,


1913, will cost the State $l,0l3, $50 06,


which with the interest thereon, 81 l,055,
fft,,- & ltl, hae


ed her faith to pay on the lst of March next


If it be determined to keep faith with the


holders of the loans, by paying the interest
on the public debt In specie or It's equivalent,
and the banks were freed from similar calls


| do not doubt, from the disposition they
have manifested to aid in maintaining the
credit Of the Commonwealth, that they will
be willing to relieve her from the repayment
of their coin for the next year, if prompt
steps be taken to provide the means for their
reimbursements at an early period. But to
continue longer this system Of compelling
the banks alone TO furnish coin for the inter
est on the public debt, is think, asking
more than they can bear, and more than
they can be expected TO do. Holding this
opinion, and desiring TO obtain for your
honorable bodies all the information | could
get on the subject, [ last moRth addressed
a circular TO the banks of the Commonwealth
inquiring whether, under the terms Of the
existing acts, they could be relied on to fur
nlsh specie or Its equivalent, for the pay
ment of the interest of the next year


Some of the banks that have replied deem
it unjust to their stockholders longer to con-
tinue this system of exchanging coin for cur
rency, and therefore decline doing so. 9th
ers are willing to continue the system if cen-
Cured in by all the banks, and required
by the State; but all agree as to the impolicy
and injustice of singing out q particular in
terest in the State to bear all the burden of
doing that which interests the whole people
They claim that, as they furnish an annual
revenue to the Treasury of over three hun
dred Thousand dollars, and are now being
brought into competition with another sys-
TEN of banking exempt from large share
Of the taxation imposed upon them, 1T ought |
to be the disposition Of the State rather to |
relieve than impose additional burdens upon |
them.


1t is evident. therefore, from all the
that he had, that the State must /
look elsewhere for the purpose of maintain
ing her credit And isit not the duty of her |
people, In view of her heretofore well settled t
policy, to make some sacrifices in order to /
accomplish it?


The subject was very ably argued by my
predecessor ia MS report 10 tle Legislature
last winter; and fully concurring in his
views, take the liberty of quoting two or
three of the very pertinent questions there
in put.


He says: The question generally asked
in discussing this Subject is, can the State
afford to pay this large difference between
and specie in the payment of her
Ought not the question rather to
be, can she afford not to do it? Will not
5he credit of the State suffer materially if
she refuses to do it? Is Der credit of no
value to her and her citizens? Is the
State SO stronga nd powerful so above any
liability of future want, that she can ex-
ercise her power irrespective of any effect
ler action may have upon her credit?


This State, by the act of June 18th, 1910,
appropriated sufficient sum to reimburse
ler loan holders for the difference in value
between specie and the currency in which
hey had previously been paid, and then
solemnly declared that hearafter the inter
st falling due on Pennsylvania stocks shall
always be paid in specie or its equivalent.


This is the law to-day, and for its observ-
lnce, and the maintenance of the present
rood name of the Commonwealth, no effort
,r sacrifice ought to be spared.