State Tax.

It has already been proposed, that the Bank tax of 1839, which has been expended in the current expenses of the year, should not be distributed to the towns for schools; and that hereafter this source of revenue should come into the Treasury, and no longer be diverted from it, until the State is relieved from its indebtedness. The probable revenue from this source, in 1840, will not exceed $35,000, arising from the supposed causes before stated.

In January, 1833, when the State was in debt about $50,000, the Legislature ordered the distribution of the Bank tax of that year; the consequence was, at the close of the year, the debt had increased to about $120,000, although the revenue received from the Land Office, that year, was $23,643 11, and for four years preceding, (excluding 1831) had averaged $32,807 35, annually. These facts prove that the Treasury then could not sustain such a diminution of its revenue; and it may be asked, can it at this time?

In the year 1835, the Treasury received from the Land Office $133,567 55, and from the State tax $49,692 84; and yet these two important items of revenue, did not extinguish its debt. The Legislature of January, 1836, abolished the State tax, and none has been imposed since 1835. It was then supposed that the revenue from the Land Office would be amply sufficient to meet the current expenses of the State; but this resource has, since 1836, totally failed as revenue. In 1836, it yielded

$44,591 66, and for the three years since, (1837, '38 and '39,) the annual average has been only $7,390 70; insufficient to defray the ORDINARY expenses of the department.

Since 1835, the State has been constantly involving itself deeper and deeper in debt, exclusive of the great

expenses of the quasi border war of 1839. No longer pursue this downward, sinking course: curtail all expenses, not imperiously necessary; withhold grants and gratuities, which were liberally bestowed by the last Legislature; and above all, let a fixed, certain revenue be established, to meet the current, necessary expenses of the government. Nothing short of this will revive and sustain the credit of the State at home or abroad.

Therefore, impose a State tax for 1840, of sufficient magnitude to pay all expenses, including interest on the State debt. This tax will not be available to the Treasury till the commencement of 1841. To meet the claims upon the Treasury in 1840, beyond the Bank tax and other sources of revenue, further loans must be negotiated, at home if practicable.

If the United States Government, as in good faith bounden to do, shall forthwith refund to this State, the main portion of our expenditures in the border difficulty of last winter; and will also pay our third part of the Massachusetts Militia Claim, of the war of 1812,-our Treasury would be effectually relieved, and no further loans required. These two claims, with interest included, will exceed $500,000; and their speedy payment should be pressed upon the National Government.

It is high time to pause, retrench; revive former sources of revenue, devise new ways and means, to relieve the Treasury of its sinking load. At no distant time, we may calculate to derive large and permanent revenue from our vast, valuable territory of Public Lands, and from the large sums now due the State on former sales: when these are realized, let them constitute a sinking fund for the gradual extinguishment of our debt.

Other means to raise funds for immediate wants of the

Treasury, can be suggested to the Committee of the Legislature on Finance. It will be improper to name others, in a public Report.

Conclusion.

The Treasurer is aware that public expectation has been disappointed in the limited operations of the Treasury Department for the year 1839. Towns, counties, banks, and individuals have all been anxious for the payment of their respective claims; the more anxious, because money has been scarce, in great demand, and borne extravagant premiums or interest. For the same reasons, it could not be procured on State stocks. But have these expectations been founded in a full knowledge of the many difficulties which have been encountered? Let it be borne in mind that, although he has come short of expectations of himself and others, yet he has accomplished much, amidst perplexities and complaints which have beset and assailed him on every hand. That hitherto no parallel case of embarrassments to the operations of the Department, has been experienced, and yet nearly $750,000 have been raised since the 3d day of February last. This partial accomplishment of his object, has produced no little labor of his hands, and anxiety of mind.

The excessive use to which the credit system has been pushed in this country, recently, by all classes, by individuals, merchants, bankers, banking institutions and other corporations, by some of our towns, cities, and many of the States of the Union, has produced a revulsion and prostration in the business of the country, greater than

hitherto known or experienced. Will not the check in this rapid career of contracting debts, afford Maine a wholesome, salutary lesson, and teach its Legislature to use due caution in its future expenditures? It is hoped it will.

It is a source of pride and gratification to the Treasurer that, amidst the unprecedented pressure in the money market since the close of May, when the disastrous news from England reached New York city, he has been enabled to raise no inconsiderable amount of money upon our State stocks, at par; while merchants of the first standing in our principal commercial cities, have paid three to five per cent. per month for its use, and the Post notes of the United States Bank of Pennsylvania have sold at the rate of fifteen to thirty per cent. per annum, and other stocks, which flood our money marts, have been equally depressed; yet he is authorized to state, that no individual or institution, OUT OF MAINE, has procured of him, directly or indirectly, one dollar of our stock below par. Although hard pressed for money, since July, to meet his engagements at home and abroad, especially in Boston, where he has paid about $120,000 since the first day of May, he refused to DEGRADE the faith and ability of Maine to the low standard of the United States Bank promises. He is aware that his tenacity of the credit of Maine has disappointed claimants at home, and not gratified the avarice of capitalists abroad.

Had he have raised funds to the extent of expectation at home, by selling our stocks at ten to twenty per cent. below their par value, as exacted by capitalists and bankers abroad, would the standard of the CREDIT of the State have been RAISED at home or abroad?

All positive engagements of the State by its agent, at

home and abroad, have been punctually met, save the one herein before detailed. The payments to County Treasurers, it is true, have been suspended for the want of ready means, and some few other claims. This branch of claims was selected in preference to others, because more equal and least injurious. The Legislature can, if thought advisable, authorize the Treasurer to pay interest on these suspended claims.

On deliberate reflection, the Treasurer is gratified that he has abstained from making a requisition on any of our Banks; and that, on the 27th June, from Philadelphia, he turned his attention to Maine for loans, whence he has derived most of the supply since procured.

The cash balance now on hand, is all available, and of equal value to American gold, and has been specially procured and reserved to pay the interest on our State Stocks due on the first of February, proximo. A further supply of funds is daily expected, to meet the wants of the Legislature and other claimants.

It is desirable to make it known to the community, at home and abroad, that the plighted faith of Maine to her public creditors, is to be promptly and punctually redeemed. So long as the undersigned has charge of its financial department, this shall be, as it has been, the first object with him to be accomplished.

All which is respectfully submitted, by

JEREMIAH GOODWIN, Treasurer of Maine.

January 4, 1840.