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/ 81 ,976, ,S9l.20. 1t is not, it cannot be expect


ed, that you will provide for the immediate pay
ment of this arrearage of interest; but some ad-
| lustmcnt Of this balance is essential as pre-


Iimlnaty to the resumption of payment by the


State, as 1t would be manlostly unjust, and


therefore lnadmlssible to provide for the future
! payment OF the accruing interest, leaving un-
iquidated and unsatisfied the interest which is


now due.


II is unnecessary to consider the various sug-
gestions which have been made for the attain


ment of this object To one, however, will


refer, for the purpose Of ofeypressing my convc-


ton that its adoption would violate the faith of


the State pledged to her creditors and to her CT


t=cnS. The suggestion, to which I REFER is


one which was mooted during the last session


OF the Legislature, "to stop the operation of


the sinking fund, and appropriate its proceeds


to the eXtinquishmcnt of this balance"


The sinking fund commenced with the debt


of the State. Each law which authorized


loan upon the public credit, created a fund
which would redeem the sum borrowed at the
!, expiration of the period Of credit specified in
/, the law. by this means the payment of the
; principal was secured to the public creditor,


and the citizens protected against the posslbiIi.


ty OF perpetual taxation, or the runous consc-
/, quences of a tax to pay off the principal of the


debt.


The sinking fund on the lst December 1914,


amounted to Sl,276, ,30679, and on the LIST of
December, 1915, to ST. ,404 ,030.2S. 1t is pro-
) gIessively increasing by the quarterly re-invest-


ment OF the interest acCruing on it; and its ope-


ration has demonstrated its adequacy to secure
the citizen and the creditor of the State by re-
!, deeming the principal of the public debt within
the periods limited in the appropriation laws
} The public creditor, with the certain assur-
ance of the future prompt payment of the ac-
cruing interest," will, am persuaded, well sat
, isded to fund the arrearage of interest upon
such terms as will comport with the ability of
} the State; and at any rate of interest you may
deem equitable and Just.


The entire debt of the State, bearing interest
+ amounts to the sum of 81 ,9SG, 7849s.


Under the operation Of the law which au-
thorizes the payment Of taxes in coupons or


certificates of interest, the public creditor IN
fact receives the amount of his interest," less the
discount at which the coupons or certificates
are sold, and less the tax imposed on his stock.
, Coupons and certificates of interest are now
| selling, and have sold since the passage Of the
law, at an average Of 80 per cent.


The result is that the creditors of the State,
holding the bonds or stecks of the State, bear
5 ing al interest of six per cent, amounting to
the sum of $3.50 ,359, receive an interest OF
= four and fttyi hundredths per Cont.-the
t creditors, holding the, five per cent. bonds OF
g the State, amounting to S7,557 ,4E5, receive
! an interest of 3-4 per cent? those holding
c the bonds of the State, bearing an interest OF
l-2 per cent, amounting to 100000, re-
1 celve three and thirty-fvo hundredths per ct.
r and those creditors who hold the three per
= cent. bonds OF the State, amounting to $500, =
600, receive two and fifteen hundredths per ct.
; have advelted TO these facts for the purpose
t Of showing that the interest of the public Gre
, ditor would be eminoutly promoted By any IL
To- qudation Of the arrearage Of interest, by
, which its payment within some fixed and rcN-
soEabIe period would be ensured, and by which
the future regular payment in money of the
. accrlng interest, according to The contract OF
the State, would be undoubtedly secured.
I If, after 4 thorough investigation Of the sub
} iact, you should determine that the St1to shaft


resume payment on the first day Of October
next, it will be necessary to fund the interest
/ inclusive of the quarter enuhg on the first de- Y
- of July, 1916.


, la view of the anxiety which will exist on


the part of the tax payers to avail themselves
, Of the privilege Of paying in Coupons or Ger
tiiicates OF interest Ga privilege which they are
aware must be denied so soon as you decide TO
, resume the payment Of the current INTEREST,"
do not think the present arrearage of interest
: will be much increased. Suppose the arrearagc
of interest, on and including the interest ofthe
, first of July lS46, would amount to the sum
} Of S 500, 900; this funded at per ct. would
r increase the current interest from that date by


the sum of S45, 5,000 and if you should decide
= to pay off the principal, thus funded, in twen-
} ty years, it will be necessary to provide an
) nually the further sum Of $4,000; which


sums added TO the current interest on the pre-
sent funded debt, would make the sum of S7l5,.
l 42l, to be raised annually to meet the de-
: mands upon the treasury.


Gentlemen, | feel the responsibility Of the
position we mutually occupy. | believe that
now is the accepted time, gand that to you is ac-
} corded the distinguished privilege of redeem


ing the honor and credit of our State There
is not citizen of the State who is worthy to
be called her Son, who does not feel shame at
The position she now occupies, and who will
. not hail with applause your efficient action to
/ place her aoU and for the future in the posi-
+ tion of right she should occupy. The people
OF Maryland were never i'll a more prosperous
. condition. Those of her citizens who are en-
3 gagged in Agriculture have been blessed thro
= divine Providence, with abundant harvests;
3 and the increased price winch has been obtain


ed for the grain crops ofthe State would alone
D equal the public debt. In evidence of the pros
= perity of those engaged in commerce and the
f mechanic arts it is only necessary to look to
: our commeica emporium (whose rapid strides
: towards commercial pre-eminence over her sis
: ter cities of the Union must crafty the pride
] of every Marylander) to witness an Increase of
= wealth during the past few years equal to the
0 quadruple Of the debt of The State.


Q propose, Gentlemen, in the further dis


charge of my duty 10 review the existing reve-
s nue. laws, and recommend such legislation as
: will in my juds sment, without intiicting unne-