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| Maryland, and in the expectation that the re
venue bills reported will pass, the committed
consider it their duty to recommend the only
step, which will enable us to do that, which il
believed to be our imperative duty to do, when
ever we are able; they mean that, the interest
in arrear shall be funded, made principal of
bearing some reasonable rate of interest, and
the interest thereafter paid regularly as it be
| comes due.


1t is estimated that the interest which will
be in arrear on the first day of July next, uE
| to, and inclusive of which, it is proposed tc
fund, will not much, any, exceed twelve hun
dred thousand dollars, and if so, the addltiona
annual charge upon the Treasury, will still
leave us at the end of every year, in possession
of a surplus, which may be increased by such
| ludicious measures of retrenchment, as may be
suggested and adopted, during the present and
succeeding sessions OF the Legislature.


| The committee cannot conceal from them
selves the fact, that much of the opposition to
! fuHdiug and making capital of the arrearageS
OF interest, results from the impression, that
many Of the present holders of the State debt,
and of the claims for interest, purchased at
rates of depreciation, more or less below the
par value. This may or may not be so. 1t is,
to be sure, more than probable, that some Of
the holders Of these claims against us, did not
pay for them dollar for dollar. But can the
State avail itself of any such plea to reduce the
demands of her creditors? If these claims and
demands have fallen in the market below their
par value, the fault, or the misfortune, is ours,
and we have no right to take advantage of this
fault or misfortune, to escape from the obliga-
ton of our contract.


The committee have already presented some
considerations, which they believe will hereal-
ter soften materially the severity of the judg-
ment, which some are disposed to pronounce
upon the people of Maryland for not paying
punctually, as it fell due, the interest upon the
debt of the State. But these considerations,
however they may excuse us for the past, can
| furnish no apology for not doing Justice, now
that we are able; and above ALL they cannot
afford the slightest pretext, for insisting that
! we shall not make our creditors some compen.
sation for Withholding from them their interest
as it became due, because we ourselves suffered
the credit of Maryland to sink below par.


There is another point of view in which this
argument against funding, if it shall be urged
is still more indetensiblc,


! The loss occasioned by the depreciation ot
our stocks, consequent upon the failure of the
State to make provision for the payment o.
the interest as il became due, has fallen chief
! ly, if not entirely, upon the creditors them,
selves. Assuming that the legal rate OF inter
est, (six per cent, Is the value of money II
Maryland, and it would not be difficult t
show that the State has received a full equiva
lent for every dollar of her debt. For all tina
portion which bears an interest of five pc
centum, and which was contracted prior to tn
year 1885, amounting to Sl,729, 947 80, sh
received premiums, varying from FIVE to tel
per cent Upon three millions of six per cent
debt, contracted under the authority of tn
act of December session, 1884, chapter 24l
the State received an advance of upwards o
five hundred thousand dollars. And for th
four and half per cent. debt, authorized b.
the act of December session, 1880, chap. 1l9
she received a price considerably above par
estimating the legal rate Of interest as the ac
tual value of money. In fact, the sinking
fund, amounting on the first day of December
1876, to $l,41l,9l SO, is almost exclusively
the product of these premiums, paid by thu
public creditor, over and above the sum of tht
States obligations, delivered to him in return


Whilst it appears, therefore, that the higt
credit of the State in times gone by, caused
her stocks to command premium in the mar
ket, and to this strong confidence in her abil
ity and integrity, she is indebted for a sinking
fund, by whose operations the public deb
will ultimately be ,xtinguished,it it cannot will
propIiety be said, that the State herself ha
ever received less than the par value for an.
of her stacks.


} 1t is true, that one oflhe improvement com
panes, to whom portion of the eight million
loan, author, Zed by the act Of May session
1886, chapter 1896, was delivered, parted wit
-, han Of do,
citation, and cons guently, the work, intende
: to be completed by it, has required further ap
preparations; yet it must be recollectcd tha
The State received the equivalent for whc
she contracted, in an equal amount of tn
preferred stock of the compan,; the two par
: ties agreeing-the State on the one ha I'D
and the Canal Co npany on the other, tina
the stock Of the State should he received b.
the Canal Company, in payment of the sui
scriplion by the State, to so much IF tn
stock of the former. The State then receive
for this portion of her debt, precisely what sh
contracted for, and although she no doubt sui
fered with all the other parties interested, b,
the sacrifice which the company subsequently


made OF her bonds, this circumstance canno
in any possible view Of the matter, impair i


the slightest degree, her obligation to pay tn


full principal and interest of these bonds.


the State made bad bargain, in exchangn


her bonds for the stock OF the Chesapeake an


Ohio Canal Company, she has herself only t


blame for it; or if the Canal Company wa


guilty Of indiscretlons, or worse, in selln


these bonds below par, the State cannot, 10


that reason, seek to diminish the extent of he


liability. She received that for which sh


bargained, to wit three millions of dollars o


the preferred stock of the Chesapeake an
y Ohio Canal Company. For this she delivere
her bonds of an equal amount to that Compa
0 ny, and no disposition which the latter ma


have made of those bonds, can weaken her ob
legation to pay them in full.


> These remarks have been made to repel tht
: idea whic h may have had its influence upol
/ some minds, that the State will have done ev