COMPTROLLER OF THE TREASURY, vii

special sinking fund with the receipts from this tax, and dedi-
cate it, as far as it would go, to the purpose for which it was

imposed. Accordingly, your Excellency will find, by refer-
ence to "Statement E," that $43,883.06 of the balance of

$69,028.62 mentioned above, were expended for this purpose
during the ytar. The cost of this investment in premiums,
as appears in same "Statement," was $3,518.90; showing
the system devised by the Constitution, for the redemption
of a loan when created, to be a rather expensive luxuiy, that

can only be afforded when there is abundant money in the
Treasury. On the first day of October, and therefore too la(e
to be embraced in "Statement E," an additional $1,092.50 of
this balance was in like manner invested, leaving $24,053 06

thereof unexpended, and for which the Treasury officers are
now seeking an investment. There was also during the year,

and in the early part of it, transferred from the Treasury

proper to the general sinking fund, as appears in same "State-

ment," the sum of $15,750.00. The most of these invest-
ments—and all that could be—were made in the purchase of
the 5 per cent, sterling bonds due in 1889, which were con-
verted into State Loan bonds under Act of 1872, chapter 366.

These sterling bonds when due, and the interest thereon, are

payable in gold in London and are held by foreign capitalists.

The Act of 1872, chapter S66, under which this conversion

was made, announces in its preamble that "the true interest

of the State manifestly requires the taking up of this sterling
debt;" and since then, all the past due sterling bonds have
been paid and cancelled. The difficulty encountered now in
carrying out the manifestly desirable object and purpose of
this Act is, that the outstanding bonds are not due and the
holders of them will not part with them. The Messrs.
Baring Brothers, of London, have advertised for them and
advise the State's Agent, Mr. Sloan, that none are offered.

The withdrawal of these funds diminished the balance in
the Treasury to the extent of the amount withdrawn, to wit,
$59,633.06, and the result practically to the State is the re-
duction of the State debt $54,874.16, at a cost of $4,758.90
in premiums.