final hearing, after the State shall become a defendant, the
extent of the State's waiver and of the rights of all classes of
bondholders, may be adjudicated. The Company, in its
answer to the bill of Virginia, submitted all the questions
arising out of Virginia's claims, including that of interest on
certificates for interest and coupons, to the 'decision of the
Court. But the agreement of certain bondholders, which the
Company adopted, last December, as the basis for the appro-
priation of $160,000, as I recollect it, yielded every claim
of Virginia so fully, that a part of the arrangement was that
Virginia should dismiss the pending bill. I have been since-
informed by Col. Marshall, one of the counsel of the Canal
Company, that another agreement has been entered into
whereby the case is to be prosecuted to final decree.

3d. " Can the holders of the said bonds recover interest
against the Canal Company on the over-due coupons from the
date of their falling due?" As I have already stated, I
think they cannot, as a debt entitled to priority over the
State of Maryland.

4th. " What legislation is necessary to protect the State's
interest against the attempt which may be made to fund the
said interest to the prejudice of the State?" it does not
occur to me that any additional legislation is required. The
Constitution has entrusted the State's interest in the public
works to the Board of Public Works. That Board has the
power in stockholders meeting to appoint the President and
Directors of the Company, and afterwards to supervise their
proceedings. The Board has the right to be informed before
any action is taken which affects the interest of the State as
creditor or stockholder of the Company. And if it has good
reason to apprehend that acts are about to be done prejudicial.
to the State's interest, it can cause proceedings to be insti-
tuted in the name of the State to protect such interest, as was
done in the case of Brady in 26 Md. before referred to. The
Convention of 1867, after full consideration, determined that
the State's interest in these works could nowhere be so safely
entrusted as in the Board of Public Works, and refused by
repeated votes and by large majorities, to subject it to legis-
lative control. It is true, that to make the State a defendant
in her own Courts, requires express authority of law. I un-
derstand an Act has been passed at the present session, au-
thorizing the Attorney General to appear for the State is
pending cases against the Canal Company. I am not in-
formed, however, of the exact terms of the Act.

Very respectfully and truly,
ISAAC D. JONES,
Attorney General of Maryland.