were not about to forget the lessons which we
had learned. It might be that events, not now
foreseen, might take place greatly affecting the
receipts from our works of internal improvement
and by which the supply from that source might
be arrested. At all events, whenever there was
a surplus of money in the treasury, he thought
that all of it, over and above what might be re-
quired for the education of the people, should go
back into the pockets of those who had had to
raise it.
Mr. SPENCER replied to the argument of Mr.
DONALDSON, that there would be a large surplus
revenue from the public works. If such a state of
things was to arise, what necessity was there
that that revenue should be pledged to meet any
ry debt which might be incurred? If there was
to be an excess of revenue, there would be no ne-
cessity to pass a law for the creation of a debt,
The appropriation of the credit of the State for
purposes of internal improvement had been the
great flood gate by which the State had been in-
undated with debt, and it was now proposed to
reverse the principle. He believed that as great
evil would fall upon the State by a converse rule
as by the operation of the original rule itself.
Mr. MERRICK said:
He thought there was much sound sense and
wisdom in the proposition of the gentleman from
Anne Arundel, (Mr. Donaldson.) He was
quite willing to deny to the legislature the power
of appropriating in future, to works of internal
improvement, the actual money or the credit of
the State, if gentlemen would be content with
that—but there were other great purposes for
which it was wise and expedient, the legislature
should have power to raise money by the use
of her credit. There was yet a heavy public debt
to be paid off, and a proper use of such a power
by the legislature, would, in all probability,
greatly facilitate this interesting object and materially
lighten the burthens of taxation. No
observant man could mistake the indications
every where given of the great change now in
progress, in the monetary affairs of the world.
We had passed through a period of long and dis-
tressing scarcity of money, and consequent de-
pression of prices, and things were now rapidly
tending in the other direction. Confidence was
being restored, credit revived, money becoming
plenty and cheap, and labor and all the produc-
tions of labor, were rising in price. This was
likely to be carried farther than usual, with such
oscillations, because there was now a new ad-
ditional and powerful cause acting inconcurrence
with the ordinary causes, which was the great
actual augmentation of the precious metals
which was taking place from the gold mines of
California, The amount already added to the
solid currency from that source, was very large,
But supplies from that source were going on to
increase in geometrical progression; to what ex-
tent it might go, none could calculate—for the
mines were found every day to be more and more
extensive, and the supply of metal less and less
capable of exhaustion.
The consequence was and must be a fall in
the value of money, and depression of the rate of

interest. Already this has taken place to a
great extent. But a few years since, stocks, gov-
ernment stocks, (which are the things most sen-
sitive to such changes, and give most decisive
indications of their approach or advent,) were
below par,; even the six per centum loans of the
United States could not be negotiated at par.
Now, behold, they are freely commanding twen-
ty per cent. premium. This state of things would
go on progressively until probably in a. few years,
good government three per cent. stocks, would
be worth par,
The amendment of the gentleman from Anne
Arundel, (Mr, Donaldson,) proposes to leave
with the legislature, the power to turn this new
state of things to the advantage of the State, in
her financial affairs—by paying off, should the
opportunity offer, her outstanding debts and lia-
bilities, by new loans at a less rate of interest,
and thus saving to the tax-paying people, the dif-
ference between the high and the low rate of in-
terest. Thus, suppose the State debt now to be
ten millions of dollars; to pay the interest on
which, at six per cent, the people have to be
taxed annually, to the amount of six hundred
thousand dollars. If you can now, or at any
time hereafter, before this debt is paid, make
a loan of the same amount, at three per cent.,
the annual interest of which, would be but three
hundred thousand dollars, and with this loan
pay off the present debt, is it not plain that you
would save to the people, the three hundred thou-
sand dollars, the difference between the interest
you now pay, and that you would have to pay, on
the new three per cent. loan—and could, there-
fore, reduce the taxes one half.
It is the valuable and important power to do
this, that I wish to reserve to the legislature.
Suppose interest should not fall so low as three
per cent., the saving would still be in the same
proportion for any greater or less fall in the rate
of interest. Besides, a revenue was now coming
from our works of internal improvement—the
actual receipts from that source being during the
last year, more than two hundred thousand dol-
lars. This must augment, and in his judgment
as well as that of many others, this augmenta-
tion must be great and rapid. But every little in-
crease of the revenue from this source, would be
necessary to insure a sufficiency to pay the in-
terest, and any new loan of the character sug-
gested, and thus place the State in a condition to
relieve the people from all taxation—a consum-
mation must devoutly to be wished; and he was
most anxious to give to it every facility—at least,
he could consent to throw no obstructions
in the way, by tying up the hands of the legisla-
ture, and depriving them of this valuable and
important power.
Mr. DONALDSON said:
The gentleman from Queen Anne's, (Mr. Spen-
cer,) had enquired what necessity there could be
to create a debt, if the money was already in the
treasury. There might be surplus money in the
treasury, annually, to double the amount of the
interest on the loan proposed to be made, thus
furnishing a large sinking fund for the redemp-