REPORT OF THE COMPTROLLER OF THE TREASURY. ix

bonds during the year—Public Buildings Loan—for the completion
of the Maryland Penitentiary.

You will notice that no mention is made in said statement of the
Penitentiary Loan of $248,000. As before explained, these Bonds
were all redeemed and the Loan extinguished. Stocks standing to
credit of its sinking fund, viz:

Consolidated Loan of 1899..............................$80,000 00

State Building and Improvement Loan..................... 126,000 00

Public Buildings Loan.................................. 30,000 00

were transferred to their own respective sinking funds, making
them, therefore, active assets for such loans, indeed, virtually can-
celling those loans for a like amount.

The gross debt of the State September 30th, 1907, was $5,978,-
926.13, yet the State holds in the Sinking Funds securities of its
own bonds to the extent of $3,388,554.72, and other securities—
municipal and county bonds—amounting to $440,000. But of the
State securities, statement "F," I wish to more particularly call
your attention, to wit:

Consolidated Loan of 1899............................. $1,567,354 72

State Buildings and Improvement Loan.................. 411,200 00

State Loan of 1902.................................... 600,000 00

Public Buildings Loan.................................. 810,000 00

Total.............................................$3,388,554 72

If these securities were all cancelled, the gross debt of the State
instead of being $5,978,926 13, would be but $2,590,371.41. Of
course it would make no "difference whatever in the net debt,
because credit has already been given for these securities. It does
look a little odd, however, that the State should be paying interest
on a Loan, every bond of which it owns, as the State Loan of 1902,
practically all of the State Building and Improvement Loan, and
about one-half of each the other two Loans of the State, even though
the increment therefrom does accrue to the State for its Sinking
Funds. In my judgment, all these State securities in the sinking
funds should be cancelled and charged off the books of the Treasury.
The debt statement would then be as follows: