ixx Introduction.

the sinking fund. The special taxes were to be paid directly to the Commis-
sioners of the Loan Office to be invested by them in well-secured mortgages
on land or on silver plate; the fifteen pence export duty on tobacco was, however,
to be transmitted by the Naval Officers of the several ports of entry who
collected it directly in the form of bills of exchange, to certain trustees in
London, also named in the bill, who were to promptly invest the money so
received in Capital Stock of the Bank of England (Arch. Md. XXXIX, 92-
113). The Assembly, usually at least annually, appointed a joint committee
of both houses to inspect the accounts of the Loan Office and of the London
trustees deposited in this same office. As has been pointed out in a previous
volume of the Archives, this joint committee had repeatedly complained that
the accounts of the Loan Office were kept in such an irregular manner that
it was difficult, or impossible, to properly audit them, and recommended that
the Italian [double entry] system be introduced; and asked authority from the
Assembly to examine the accounts of the Office between sessions (Arch. Md.
LV, lii-liv).

A joint committee of the two houses was appointed at each of the three
first sessions of this Assembly to examine the accounts of the Loan Office,
but brought in no reports (pp. 19, 21, 47, 76, 152, 171, 182). At the March-
April 1760 session the joint committee brought in a report that owing to
the continued illness of Richard Dorsey, Clerk of the Loan Office, it was
impossible to make a satisfactory examination of the Office accounts, which,
however, appeared to be kept in the same irregular manner that had been
complained of in former reports (pp. 205, 213, 229, 250). Again at the
September-October 1760 session, the joint committee seems to have been
unable to make an examination owing to the severe illness of the clerk (pp.
334, 354). At the April-May 1761 session the joint committee, of which
Benedict Calvert of the Upper House was Chairman, was able to make an
examination of the accounts (pp. 405, 440). Richard Dorsey, a justice of
Anne Arundel County, who for some twenty years past had been clerk of
the Loan Office, had died on December 11, 1760. On April 24, 1761, the
committee submitted a sensational report of its findings. This made slight
mention of the accounts of the Commissioners of the Loan Office in Annapolis,
which doubtless showed no evidence of wrong-doing, but confined itself to the
startling revelations which an examination of the accounts of the trustees of
the sinking fund in London, filed in the Loan Office, had brought to light. These
disclosed that for some four years Henry Darnall, Naval Officer of the Pa-
tuxent District, had failed to remit directly to the London trustees, as re-
quired by law, the fifteen pence tobacco export duty which he had collected,
and in this way had embezzled about £2,000 of Provincial funds. The Darnall
defalcation is narrated in detail elsewhere in this introduction, so the dis-
closures need not be repeated here (pp. iv-lviii). The examination also
brought to light that some of the other naval officers, had been slow in making
remittances to the London trustees, as well as the fact that the London trus-
tees had not been over-careful in keeping their accounts, and had failed to comply
with the provisions of the law requiring prompt investment by them in Bank
of England Stock of all the funds in their hands.