REMARKS.

THE public debt amounting to $169,000, which became due during the past financial year, has been paid, or provided for, but as was anticipated by my predecessor, the $100,000 state tax, which was due in January last, with the other means in the treasury, exclusive of the United States loan, was found inadequate to pay so large an amount of debt, and meet the ordinary expenses of the year.

This deficiency of means resulted from the smallness in amount, of the annual tax for 1847-it being only half the amount of the tax for the present year, and considerably less than the inevitable annual expenses of the government, exclusive of the interest on the funded debt of the state. In 1846, when this short tax was assessed, there was in the treasury a large amount of surplus means, which the legislature of that year undoubtedly relied on to supply any deficiency.

This surplus, however, was subsequently, in November, 1846, in pursuance of a resolve of the legislature, invested in United States stock of the loan of that year. This investment was highly commended by the last legislature as being equally fortunate and judicious for the state. Fortunate, as the stock obtained by the state was very desirable security, being at any time convertible into money, at an advance upon the cost. Judicious, as it concentrated our surplus means into a fund drawing interest, thereby enabling the state to set it aside, if necessary, without loss, for any desirable: purpose.

There have already been received on this stock, nearly $10,000 for interest. As the interest received from this source will pay an equal amount on the public debt, the legislature thought it advisable that the stock should be retained to be used for the payment in part of the large amount of debt which falls due in 1851.

To provide means, if the condition of the treasury should render it necessary, they authorized a call upon the banks for a temporary loan to supply any deficiency. Additional means being wanted, on the first of February last I called for such a loan. The banks promptly responded, nothwithstanding the closeness of the money market, a state of things calculated to make the loan onerous and which was not anticipated at the time the requisition was authorized by the legislature. I obtained of the banks a sum equal to five per cent. on their capital stock actually paid in. See detailed statement annexed.

During the months of February and March, the receipts were larger and the disbursements less than was anticipated, and I was enabled to pay on April 1st, with safety to the public interest, the first installment, or one-fifth of the temporary loan, as appears in the table before referred to.

The loan or debts now held by the banks is only $110,000, a sum but a trifle larger than the difference of the annual tax for 1847 and 1848, which conclusively proves that if the tax for 1847 had been equal to the one for the present year, there would have been no necessity for calling on the banks.

It is believed that the wish is generally entertained that our public debt should be paid at the earliest practicable moment; and most surely if this is the feeeling in relation to our permanent loan, much of which was taken by the holders less than par, there certainly should be a strong desire to pay as soon as may be, our temporary loan, which was obtained under the provisions of our banking law.

The necessity of this loan, as has been already indicated, was occasioned by the short tax assessed in 1846 and the setting aside the United States stock (which it is believed was judicious) for a special object; and it would seem to be but just that the pru

dential arrangements of the state for the benefit of the treasury, should not be allowed to interfere with the ordinary business of our banks for any longer time than absolutely necessary.

The temporary loan, by the terms of the notes held by the banks, which are in conformity to the provisions of law before alluded to, is reimbursable by five annual installments, or at any shorter period, at the election of the state. From the suggestions already submitted you will infer that I do not think it advisable for the state to avail itself of the time allowed by the notes, but to pay them as soon as practicable. For, although the banks responded and granted the loan with all the promptness before intimated, I have reason to believe that they regard it as a hardship of which they would be gladly relieved, and one which they would not voluntarily have assumed.

How are the ways and means to be made certain for the payment of the banks, either in whole or in part, during the present year?

The collections from taxes, together with the funds now on hand, will only be sufficient to pay our inevitable liabilities now outstanding and those which are certain to accumulate, before the tax for 1848 falls due at the treasury. Indeed these funds will be inadequate to meet the wants of the treasury up to the period designated, unless the legislature are rigid and economical in making appropriations which are merely desirable and not indispensable.

Aside from taxes, our only other sources of revenue are the receipts from the land office and the bank tax.

The revenue from lands for the ensuing year is estimated at $75,000. A moment's consideration will satisfy any one that revenue from the land office is quite uncertain, depending as it does upon a great variety of uncontrollable circumstances. Certain physical hindrances may occur, like the want of "a freshet," or the destruction of artificial helps to float logs to the point of manufacture by an excessive one, which will unexpectedly interrupt and defeat the just hopes of the operator, depriving him of the means of payment to the state. Should nothing unfavorable occur

until the logs are manufactured and the lumber is ready for sale, still the hazard, depression and uncertainties of the business world might prevent a sale which isthe reliance of the lumberman for the means of paying stumpage. We may realize the estimate if nothing unfavorable occurs, but it would be giving loose reins to our hopes, if reliance is put upon it to meet certain liabilities.

The remaining source of revenue for the treasury is the tax derived from banks. For a series of years past this tax has been distributed to the towns in aid of primary schools. All are ready to acknowledge the duty of providing free schools for the children of the people, and none will complain if there is manifested towards these "nursing mothers" of New England all the indulgence of fondness. But we should not allow either our sense of obligation, justifiable partiality or any apprehension of being misunderstood on the justly popular topic of public schools, to lead us to the approval of a policy which at best affords but trifling aid to the schools, while as a measure of government it can but be regarded as unwise and improvident.

The amount apportioned to each scholar last year was about twelve cents, and the sum will not be so large this year, as the bank tax is less and the scholars have increased in numbers. The improvident feature of this system is the distribution among the towns of money which they are immediately called upon to pay back in the form of taxes, being subjected to the loss of the necessary expenses of assessing and collecting them.

If the policy of distribution is improvident, a proper management of our financial concerns demands that it should be abandoned.

I am aware that the proposition of allowing the bank tax to remain in the treasury as available means, although recommended and enforced with great ability by one of my predecessors, failed of being adopted by the legislature. How much deference is to be given to their action, is a matter upon which I will not remark, but it most certainly is not a reason and could hardly be made an apology for the refusal of wholesome legislation. If their action resulted either from fear or favor, (a mistaken partiality for our pri

mary schools, or the apprehension of being suspected of hostility to them,) it should not be regarded as an approval of the system of the annual distribution of the bank tax.

Further remarks upon this subject are considered unnecessary, but it is hoped that those already submitted will arrest the attention and excite inquiry in the legislature, with whom is the right of judgment and responsibility of power in the proper management of our public affairs.

Should the legislature be unwilling to repeal the law, providing for the distribution of the bank tax, it is suggested that in view of the wants of the treasury and our just obligations, that they suspend its operations for the present year.

If this course is taken, and the tax be allowed to remain in the treasury as available means, another installment could within a short time be paid toward the temporary loan, thereby increasing the means of the banks for business facilities. The banking capital of this state is very limited, and quite unequal to our business wants, and it is to be apprehended that the diversion of even the small sum of four per cent. of this capital from the usual channel, may, in the present depressed condition of money means, operate unfavorably upon the business of our citizens.

Should the legislature be inclined to regard the bank tax as the special boon of our children, they may well consider whether it would not be judicious to retain it this year, and distribute double the amount next. During the year 1849 there will be no public debt to pay, and there will be due to the treasury an annual tax of $200,000, so that such a distribution could be made without embarrassment to the public service or interference with the business of the state.

I have presented these different suggestions, and ventured to press this matter upon your consideration, from the fact that I can see no other way of making certain the means of payment to the banks, either in whole or in part. The early extinguishment of the temporary loan is highly desirable, and may be the turning point of our success in paying at maturity our public debt, without resorting