206 A. L. Bishop — The State Works, of Pennsylvania. 



fund" of which the secretary of the commonwealth, the auditor 

 general, and the state treasurer were made commissioners. All 

 sums vested in them were to be used to pay the interest on loans* 

 contracted for building the canal, to purchase the principal of such 

 debts, and to defray all expenses incident to tlie management of 

 the fund. The sources of the latter were as follows: "All appro- 

 priations, grants, and donations" made by the state legislature, by 

 the Congress of the United States, by corporations or individuals; 

 an annual appropriationf of $30,000 from the auction duties ;:j: 



« 



* The practice of borrowing on the credit of the state had commenced pre- 

 vious to the perio<l under discussion, although to a very limited extent. In 

 the year 1826, when the commonwealth commenced the sjstem of internal 

 impix>vements, the debt was $1,840,000.^ The report of the committee on 

 ways and means' made to the legislature in 1823 expressed the regret that 

 Pennsylvania has adopted a system of borrowing. The time was anxiously 

 anticipated when the state should be free from debt. If the policy of spend- 

 ing more than the legitimate revenues supplied were continued, the result 

 must be taxation or a state-debt- They believed "that neither our form of 

 government nor the habits or disposition of our citizens is calculated for 

 either debt or taxation; but if one or the other must be adopted they would 

 prefer taxes rather tlian debt."' This preference, however, was not embodied 

 in their recommendations of ways and means since they advised "the passage 

 of a law authorizing the governor to obtain on loan from the Philadelphia 

 Bank the sum of $100,000 ... to renew the loans with the Pennsylvania 

 Bank as they shall fall due, and to make such other loans as the exigencies 

 of the state may require . . . for any time not exceeding four years." The 

 reason for recommending the continuance of a policy adverse to their con- 

 victions was: — "The great scarcity of a circulating mediimi in the interior 

 of the state woTild make it very diflleult if not impracticable to raise money 

 by any general system of ta.vation."' 



f During the year 1826, however, the state treasurer was authorized to 

 pay the coimmissioners of tlie fund, out of the receipts from duties on 

 auctions, such sums as might be necessary to meet the interest on loans 

 autliorized duiing that year . for canal construction. After December 1st, 

 1826, $30,000 annually were to be paid into the improvement fund out of 

 the auction duties. 



J Auctioneers were required to be licensed. They were allowed a fixed 

 percentage on their sales, and along with this commission they had to collect 

 for the use of the state, an additional one per cent. The bonds given by the 

 auctioneers were security for the payment of the collections made for the 

 state. Four times a year the duties thus collected were paid intx) the 

 treasury. — See General Index to the Laws of Pennsylvania, 1700-1812, p. 47. 



^ Report of Joint Committee on Pennsylvania's finances from 1838-43, read 

 ill the House, May 15th, 1878. 

 == See J. H. Rep., 1822-23, p. 820. 



