Marvin Mandel, Governor                       2091

Whereas, Interest is a major factor in the cost of operation of
the government and has a direct bearing on the cause of taxation;
and

Whereas, In spite of efforts of the last several National Ad-
ministrations and, in particular, the present one, to control the rate
of interest paid by government, business and citizens to commercial
banks and other financial institutions, the effort seems to be failing;
and

Whereas, The Federal Reserve System which theoretically con-
trols the flow of funds into the economy by the regulation of interest
factors has not clearly demonstrated its effectiveness in stemming
inflation; and

Whereas, The State of Maryland and its local subdivisions and
other states and their subdivisions throughout the Country have
been in an extremely unfavorable position in borrowing funds; and

Whereas, The State of Maryland and local governments are very
substantial depositors in commercial banks and extremely profitable
customers for banks and other financial institutions; and

Whereas, The State of Maryland in its 1970-71 budget will have
one and one half billion dollars of funds flowing through banking
sources at the State level and untold millions more flowing through
local governments and untold millions from other autonomous agen-
cies of the State such as the University of Maryland, the Maryland
Port Authority, the State Roads Commission and independent re-
tirement funds, and these tremendous amounts of funds appear to
be extremely profitable as deposits for the private banking industry;
and

Whereas, The control of the monetary funds by private finan-
cial institutions appear not to be subject to any substantial control or
influence by the State of Maryland and other states so that the
industries and citizenry of the States may reap some benefits from
the vast resources that our tax revenues produce; and

Whereas, There have been many precedents of interstate com-
pacts in many different phases of government where neighboring
citizens can benefit mutually by entering into these compacts; now,
therefore, be it

Resolved by the General Assembly of Maryland, That a special
commission be created to study the feasibility of creating a State
Bank of Maryland and/or a compact with any such neighboring
states for the purpose of depositing and disbursing all State and
local funds derived from governmental sources within the State and
use these funds in a State owned banking system so that whatever

profits may be derived therefrom be used solely for the benefit of

the citizens and industries who have created these resources. This
commission should consist of nine members to be appointed as fol-
lows: three by the Governor; three by the President of the Senate,
no less than one from the Senate; three by the Speaker of the House
of Delegates, and no less than one from the House of Delegates;
COMMISSION, COMPOSED AS FOLLOWS, BE CREATED TO
STUDY THE BROAD PROBLEM OF THE MANAGEMENT OF
PUBLIC FUNDS BY THE STATE OF MARYLAND AND LOCAL
GOVERNMENTS IN MARYLAND, INCLUDING POLICIES RE-