A. L. Bishop — The State Woi-ks of Pennsylvania. 209 



is evident that a clear, safe and well-defined policy was laid out 

 and pursued, viz. — to contract no debts without arranging before- 

 hand, beyond the possibility of doubt, the ways and means of 

 paying the interest and later the principal itself. 



In accordance with these plans, the funds for meeting interest 

 payments were always ample, and the part of the improvement 

 debt falling due in 1836 was easily paid.. The balance remaining 

 in the sinking fund, at this time, was $3,931,132, and the remainder 

 of the debt which did not mature until 1845 was only $3,762,256. 

 The latter would have been discharged at once, had it been possible 

 to get the state's creditors to surrender their certificates at a reason- 

 able figure. There being no longer any need of augmenting the 

 sinking fund, legislation was passed in 1836 providing for the res- 

 toration to the "general fund" of the salt and auction duties, also 

 for diverting $200,000 annually from the canal revenues to the 

 same fund. 



It thus seems clear that the meagre provisions made by Pennsyl- 

 vania for financing the trunk line were not copied from J^ew York. 

 On the contrary, the sound policy of the latter state affords a 

 striking contrast to that of the . former. The inevitable result of 

 such negligence of duty on the part of Pennsylvania was that, 

 within a short time, the interest fund was exhausted. An acknowledg- 

 ment of this fact by the commissioners* resulted, as we shall soon see, 

 in a temporary decline of the credit of the state. 



The first loanf negotiated to secure funds to commence the con- 

 struction of the public works was for the sum of $300,000, author- 

 ized by an Act of April 1st, 1826.| From this time until 1842, the 

 period of the active " prosecution of the state improvements, 

 $53,352,648.72 were expended by the commissioners of the internal 

 improvement fund. Indeed, within two years from the date when 

 the first ground was broken, permanent loans had been floated 

 amounting to $3,300,000 and the work of construction was only 

 fairly under way. As early as 1829, the confidence of "capitalists 

 and moneyed institutions" had become shaken respecting the suffi- 

 ciency of the fund pledged for the payment of interest. So great 



*■ See Report of the Commissioners of the Internal Improvement Fund for 

 February 19th, 1829, in J. H. Rep., 1828-29, II, p. 589. 



f The rate of interest was 5 per cent., and the stock sold at a premium 

 of 31 per cent. • 



J Laws of Pennsylvania, 1825-26, p. 168. 



