9

dollars, in order to give it absolute control of any fore-
closure proceedings which could possibly arise under
these bonds. There is another question worthy of
consideration.

There are other bondholders, who have a lien upon
the tolls of the canal. In the present condition of the
canal, these bonds possess but little, if any, value. But
were a sale of the canal effected, the question would
at once be raised, what is the status of these bonds ?
The principal of these bonds amount to some $1,700,-
000.00, and about as much more is due for interest. The
State's claim, as I have shown, principal and interest,
is over twenty-five millions of dollars.

The whole bonded indebtedness of the canal should
be adjusted, so that in case an offer for purchase of the
canal should be made, the treasury officers would know-
exactly how much, in a given sum, the State would
receive for its interest. As these matters now stand,
it would be difficult to determine, in the event of a
sale, what share of the proceeds the holders of the lien
upon the tolls would be entitled to. In a word, if the
canal is to be maintained, it should be reorganized.
I submit these questions to you for your consideration.

Another considerable part, of the unproductive capi-
tal of the State, is represented by the lien against

THE SUSQUEHANNA AND TIDEWATER CANALS.

The State holds mortgages on these canals, to the
amount of one million of dollars.

These mortgages have been over-due since the first
day of January, 1884, and the interest on them has not
been paid, since the first day of July, 1879.

To collect this interest and to place these mortgages
among the State's productive investments, has been
my hope and aim. In the past four years I have de-
voted much time and attention to this subject, and in
order to hasten the end I had in view, the Legislature
at its last session, conferred upon the Comptroller the
authority to adjust and settle the arrearages due on