public debt as reported by the Comptroller, do not exhibit a cor-
responding reduction. The sterling debt having been calculated
at $4.44-4/9 to the pound its value in London, and not at $4.84 its
legal value in the United States; a difference of $788,292.78
upon £1,992,875, the amount of the original sterling debt.

The amount of 5 per cent sterling bonds converted into curren-
cy during the past year was £50,625, and the whole amount of
sterling debt now converted is equal in currency bonds to $1,924,-
021. This conversion of sterling bonds, the interest upon which
is payable in London, into currency bonds, with interest payable
at the Treasury, which under the law of 1847, is done by the
Treasurer, at the option of the holder of said bonds, will propor-
tionately increase the figures of the debt from year to year, without
increasing the State's actual liabilities. By the operation of this
law, the expenses, equivalent to the cost of the exchange and com-
mission for remitting the interest to London is saved to the State;
and also the same charges upon the ultimate payment of the prin-
cipal of the sterling bonds The proportion of the sterling debt
upon Which interest is paid by the State, was on the 1st of Janu-
ary, 1857, £983,850, or $4,372,666,66, and semi-annual inter-
est, on that amount was $121,450.82, and on the 1st July, 1857,
£980,850, or $4,359,333.33, and semi-annual interest $121,000,
the cost of sending which interest to London was about 10 per
cent of said interest. Of the amount of the public debt, to wit :
$14,919,967.39, the interest upon $3,200,000 is paid in London
directly by the Baltimore and Ohio Rail Road Company, the State
bonds to that amount having been issued for the use of said com-
pany. The interest upon the remainder of the public debt, as
paid by the Treasurer, amounted the past year to $670,282.70
This interest was provided for as follows:

From the Baltimore and Ohio Rail Road Company for divi-
dends upon stocks held by the State $90,636; from the Washing
ten Branch Road, for one-fifth of the passenger receipts $76,038;
from the Northern Central Railway Company $90,000; from Sus-
quehanna and Tide-water Canal Company $40,559; from other
stocks $40,415.36.

The total interest provided by the Internal Improvement com-
panies, which under the Constitution must be applied to the pay-
ment of the public debt was $297,233. The amount of interest
which remained to be provided for by the State from other sources
was $373,049.70. The amount of revenue received from direct
taxation was $233,303.02; from licenses $252,273 31; from
special taxes $120,553.53; from other sources $352,616.58.

The Tide-water Canal Company failed to meet its full obliga-
tions to the State; the amount paid into the Treasury by that
company, being $40,559, instead of $67,487.50, leaving a defi-
ciency of $26,928.50, which has not yet been accounted for

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