X REPORT OF THE COMPTROLLER OF THE TREASURY.

Although the Defence Redemption Loan Sinking Fund
now holds securities of the value of over a million and half
dollars, the great majority of them are State loans, which
will not be available for providing means to meet this loan
at maturity.

Whilst I recommend the disposal of certain unproduc-
tive stocks and securities owned by the State, I should re-
gard it as bad policy for the State to part with such invest-
ments as she has in the Washington Branch of the B. & O.,
as well as in the N. C. Road. These investments can
hardly be improved on, and the promptness with which
the amounts due the State are paid from said sources fre-
quently relieves this department, of what under other
circumstances, might be an embarrassing position.

It will be seen from the aforegoing statements and the
accompanying tables that the Treasury is in a sound and
prosperous condition, and the time is rapidly approaching.
when the General Assembly may, by reducing the rate
of taxation, somewhat lessen the burdens of the people
without affecting the proper administration of this De-
partment of the State government. If a less amount
than is now realized will be sufficient to meet the interest
on the Stage's debts, to augment gradually, and not too
precipitately, its several sinking funds and to defray the
ordinary expenses of the government, that less amount,
and no more, should be levied and collected. The reduc-
tion when made ought, perhaps, to be progressive ; that
is to say, not all at once, but a certain proportion for
the first fiscal year and another for the next, and so on, as
the fuller development of the policy adopted by the present
treasury officials shall demonstrate the extent to which
that reduction may be safely and advantageously made.

The position taken by His Excellency in his message
with reference to an immediate reduction in the rate of
State taxes by the present General Assembly, is one which,
with great deference and submission, I am unable to con-
cur in. If, as I have stated, the present financial policy of
this department will ultimately justify a reduction of State
taxes, it can only be made in the future—though it is
hoped in the near future. This seems to me to be appar-
ent, not only from what has already been Suggested in this
report, but from the further important fact that the Acts of
1888 Chapter 201, and 1890, Chapter 305, authorizing the
refunding of the loans therein referred to, and the issuing of
new securities at a lower rate of interest, wholly failed to
comply with the provisions of the Constitution, in this,
that they omitted to provide for the creation of a sinking