such bonds and certificates in connection with the Act of 1844,
chapter 281. The. Court of Appeals in Brady vs. The State,
26, Md. Reps. 308, construing the Act of 1844, ch. 281, said
" The State waived its priority only in favor of the liens created
and authorized by that Act." The net tolls were relied on to
pay the interest coupons, and the principal of the bonds so au-
thorized.

The State stipulated that "in no case should it be bound or
held responsible for the payment of the bonds or interest
thereon," issued under the Act. Those who took the bonds
relied upon the accruing net tolls to pay the semi-annual in-
terest. If no net tolls are in hand to meet the coupons when
due, the holders are entitled to be paid whenever afterwards
net tolls shall be in hand. But if, instead of retaining the
original security, with its specific lien issued under 1844,
chapter 281, they give up the coupons to the Company and
accept in lieu thereof new bonds, bearing semi-annual inter-
est, I am. of opinion that such bonds are not within the
waiver of the State of Maryland ; that they create but a gen-
eral indebtedness, and are postponed to the holders of the
original bonds and interest coupons ; and also to the debt due
to the State on its mortgages. The Company was incompe-
tent, without the assent of the original lien bondholders, and
of the State, to enter into the new contract and give it prior-
ity oversuch original bondholders, and over the debt due to the
State of Maryland. The effects of allowing these new bonds
for interest, bearing Interest payable semi-annnally, to re-
tain the lien of the surrendered coupons, is to give compound
interest to the holders, to the prejudice, immediately, of the
holders of the original bonds, and remotely, to the rights of
the State, as mortage.

I am, therefore, of opinion, that to the extent of any pay-
ment to Virginia of interest upon these new bonds, the Com-
pany misapplied its net revenues. I have been informed,
however, by one of the pregent counsel of the Company, that
an agreement has been entered into with the Virginia author-
ities, whereby the money received shall be applied according
to the ultimate decision of the Courts in the pending case.

From the foregoing, the Senate will perceive the reason of
the Court's decision, that the State of Maryland has such an
interest in the subject matter of the pending suit, that it
was indispensable to justice that it should have the oppor-
tunity of becoming a defendant therein, and that this could
be done only by an Act of the General Assembly authori-
zing it.

Accordingly, on the 3rd instant, I received a copy of the
Act recently passed, directing the Attorney General to cause
the State to be made a defendant in the said suit, and in any
other suit now pending, or thereafter to be instituted, the ob-