COMPTROLLLER OF THE TREASURY, ix

ill accordance with said Act, that tho amount, of the defense loan
issued under the Act of 1864, chapter 15, would be redeemed at
the Treasury on the same day and that interest on that would cease
therefrom. The latter amount is small and was entirely insufficient
for the investment of the sum still available to the Treasury for
that purpose, after the absorption of the loans authorised by the
Acts of 1874, chapter 469, for the State Normal School, and by
chapter 233 for the House of Correction.

The high price of gold and exchange on London, was for a time
deemed an obstacle to the course ultimately taken, but finding that
the premium would advance on the stock outstanding and not yet
due, in proportion to the requirements of the Treasury for this in-
vestment, and that to purchase it at such exorbitant rates would be
a comparatively worse sacrifice than the payment of the overdue
bonds in gold, the latter course was adopted, and steps were accord
ingly taken for that purpose. The whole amount of gold necessary
for redemption of this loan, has been transmitted to London, and
placed to the credit of the State, with Messrs. Baring Brothers &
Co., who have agreed to disburse the same, and take up the bonds,
for a commission of one-fourth of one per cent. This was deemed
reasonable, as the State had uniformly paid the same firm a com-
mission of one per centum for disbursing the sterling interest in
London. I hope that the course taken by the Treasury officers will
meet the approval of the General Assembly. While on this sub-
ject, I desire to call the attention of the Legislature to the fact, that
there will still remain the bonds issues! to the Susquehanna Canal
Company in 1838, which have been duo in London since 18C5, and
to recommend that such sums as may be available to the Treasury
for the redemption of the public debt hereafter, may be directed to
their extinguishment. When this shall have been done, the remain-
ing debt of the State having some time to run, before it can be called
in for payment, should, in my opinion, bo allowed to remain out-
standing until duo, unless the purchase in the mean time can be
made at not more than its par value. I see no good reason for tax-
ing the present generation to pay off the principal of the debt before
it is due at a premium, when the benefits arising from the improve-
ments, for which the debt was contracted, will accrue in equal it'
not greater proportion to future generations,

INVESTMENTS OF THE SINKING FUND AND FREE SCHOOL FUND
Statement "F" exhibits in detail the several stocks and bonds in
which the Sinking Fund and Free School Fund are invested,