By the act of April 2d, 1839, any sums of money thereafter to be received from the claim on the general government was appropriated exclusively to a sinking fund for the final redemption of certain scrip, issued under authority of said act, making provision for the then unfunded debt of the Commonwealth, amounting to about $300,000. And by the same act, one half of the proceeds of the sales of public lands was irrevocably appropriated to the fund for the redemption of the principal of the scrip issued under the authority of the act of April 15th, 1837, for the purpose of providing means for paying the Commonwealth's subscription to the stock of the Western Rail-road.

The act of March 3d, 1842, makes it incumbent upon the Treasurer to apply all monies, received by him by virtue of the laws recited, to the purchase of the identical scrip, for the final redemption of which this sinking fund was established. In the belief that this limitation will tend to diminish the value of the fund, we recommend the passage of a bill which shall authorize the Treasurer to invest the money to be received by him on account of this fund, under the direction of the Governor. Under the operation of these laws, there has been received by the Treasurer and applied to this fund as follows:

Whole amount received account this fund,

From which deduct premium on investment,.

127,731 17

$289,793 07

2,590 10

$287,202 97

$127,731 17

110,000 00

49,471 80

$287,202 97

It will be perceived that, under existing laws, this fund is to be increased by one half of the proceeds of sales of lands in Maine, together with its own income; and we would submit the following statement of the probable amount of the fund in 1857, when the notes for $995,000, for the redemption of which this fund was established, will become payable:

The present sum of $287,202 92 will amount at

that time, January 1, 1857, at compound inter

est, at the rate of five per cent. per annum, to $515,775 23 And the proceeds at future sales of public lands,

applicable to this fund, may be fairly estimated at $15,000 per annum; which, at five per cent. compound interest, will amount, on the 1st of January, 1857, to

Estimated value of this Sinking Fund on the basis stated in 1857, when the debt, for the redemption of which it was established, becomes due,

Western Rail-road Loan Sinking Fund.

238,756 90

754,532 13

On the 21st of February, 1838, an act was passed, for the purpose of aiding the Corporation in the construction of the Western Rail-road, by which the Treasurer was directed to issue the scrip or promissory notes of the Commonwealth, for the sum of two million one hundred thousand dollars, ($2,100000) payable to bearer in London, bearing interest at the rate of five per cent. per annum, and redeemable at the end of thirty years from date; and to deliver said notes, upon certain conditions, to the Treasurer of the Western Rail-road.

The conditions were, that, when the Corporation should have received one half of the fifth assessment, of five per cent. upon the stock held by private stockholders, the Treasurer of the Corporation should be entitled to receive one half of the scrip authorized. And, when the Corporation should have collected seventy-five per cent. of the fifth assessment, and seventy-five per cent. of the sixth assessment, then the Treas

urer of the Corporation was entitled to receive the remaining part of the scrip for $2,100,000 authorized, in sums not larger than $300,000 at one time; and, after the delivery of the first three hundred thousand dollars, no more of the scrip was to be delivered to the Treasurer of the Corporation, unless it was made to appear, that at least two thirds of the proceeds of previous deliveries of scrip had been faithfully applied to the proper purposes of the road.

The 3d section of the act provided that all premium or profits, derived from the sales of this scrip, should be paid over to the Treasurer of the Commonwealth; and, after the road should be opened for use, a sum equal to one per cent. on the amount of the scrip should be annually set apart from the income of the road, and paid over to the Treasurer, for the purpose of constituting a sinking fund for the future purchase or final redemption of the scrip.

It was also provided, that no part of the scrip should be delivered to the Treasurer of the Corporation, until said Corporation should have given to the Commonwealth a bond that they would faithfully apply the proceeds of the sales of the scrip to the construction of their road, and pay the principal of such scrip, as should be delivered to their treasurer at its maturity and the interest semi-annually, and convey to the Commonwealth their entire road, with its income and all the property and franchise belonging to them, as a pledge to secure the performance of all the conditions of the bond.

The act of March 26th, 1839, provided for a further loan of the scrip of the State to the Western Rail-road Corporation, amounting to one million two hundred thousand dollars ($1,200,000,) to be delivered to the treasurer of the Corporation, when further assessments upon the stock should have been laid and collected. The premium on the sales of this scrip and one per cent. annually, from the income of the road after it should be opened for use, upon the amount delivered to the treasurer of the Corporation were to be paid over to the treasu rer of the Commonwealth, to be added to this Sinking Fund.

In the original charter of the company, the State reserved to itself the right to purchase, at any time after the expiration of

twenty years from the opening of the road for use, the whole road and property of the Corporation, by paying the cost thereof with ten per cent. per annum profit. In consideration of this second loan, the terms of this provision were so far altered that the State might purchase the whole road, with all the property, rights and privileges of the Corporation, for such sum as would reimburse the Corporation for amount of capital paid in, with a net profit of seven per cent. per annum.

By the act of March 18th, 1841, a further loan of the scrip of the State, amounting to seven hundred thousand dollars ($700,000), was made to the Western Rail-road Company, under substantially the same conditions as in the former

cases.

The treasurer of the Commonwealth and the treasurer of the Western Rail-road Company, are the Commissioners of this Sinking Fund.

It is to be observed that this fund is not the property of the Commonwealth, but that it is held in trust by the Commissioners for the Corporation, whose obligations it is intended in part to relieve.

Under the operation of these laws, there has been received and applied to the fund as follows:

This fund is to be increased by its own accumulation and by the payment of forty thousand dollars ($40,000) annually from the income of the road. The debt for the redemption of which it was established will be payable in 1868, 1869 and 1870say 1869

On the first of January, 1869, the present fund, at compound int'st at 5 per cent. per annum, will

amount to

And the annual payment of $40,000, at 5 per cent. compound int'st, would be

$764,522

$3,999,555 56

1,780,080

as security for the prompt payment of which the whole road and all the property of the Corporation will stand pledged.

School Fund for Indians.

This fund was established by the act of March 21st, 1837, concerning the deposite of the surplus revenue, one provision of which act was, that the Treasurer should reserve the sum of twenty-five hundred dollars, and pay over the income of the same to persons designated, to be appropriated exclusively to the purposes of Common School education among certain tribes of Indians.

The fund amounts to the original appropriation, $2,500 00 and is invested in note, secured by mortgage on

real estate, at 6 per cent., .

2,500 00

It is believed that the foregoing statements will put the House in possession of all the facts necessary to a knowledge of the financial condition of the State, and to an appreciation of the value of the several funds held by the Treasurer and Receiver General for specific objects.