A. L. Bishop — The State Works of Pennsylvania. 217 



enue, including the bonus received from rechartering the Bank of 

 the United States, and the surplus revenue, had all been spent.* 

 Moreover, in his report of December 8th, 1838, the state treasurer 

 estimated that on October 31st, 1839, there would be a deficit of 

 over $3,000,000. To meet this emergency new loans were offered 

 in 1839, but no bids were received. So, in accordance with the 

 conditions of the charter, the United States bank was forced tq 

 take them. With no market at home or abroad for these stocks 

 received in exchange for its own notes, the bank, in October, 1839, 

 was obliged again to fail.f With $1,800,000 interest to be paid per 

 year, with large sums due the contractors on the works, with little 

 or no credit abroad, and with its own financial institution bank- 

 rupt, the legisl9,ture at last was forced to take action. This was 

 not, however, until'it was too late to avert a crisis. Consequently, 

 for nearly three years following the date of the second failure of 

 the bank, the state was engaged in a desperate struggle to avoid 

 defaulting its interest. Let us now see what efforts were made to 

 preserve its credit. 



As early as December, 1838, the state treasurer, in discussing 

 various financial matters, :|: recommended as desirable, in accord- 

 ance with the soundest principles of public policy, the adoption of 

 an adequate system of taxation. This plan, however, was not 

 endorsed by Governor Eitner in his message§ three weeks later. 

 The following January, Governor Porter, in drawing the atten- 

 tion of the legislature to the big deficit inevitable in 1839, stated 

 that two alternatives were open to them to secure the necessary 

 funds, viz. — taxation and loans. "Of the two," he said, "the latter 

 appears least objectionable because productive of least hardship to 

 the people, is less expensive, and can be carried into effect with 

 greater facilitj."- In January, 1840, the state treasurer again 

 pointed out the necessity of checking the ruinous policy of finance, 

 and resorting to taxation. || By this time Governor Porter's views 



* See J. H. Rep., 1S38-39, II, Part II,— Report of the State Treasurer. 



t This was on the 9th day of the month. On Feb. 4t.h, 1841, it failed for 

 the third time. 



X See Report of State Treasurer for Dec. 8th, 1838, in J. H. Rep., 1838-39, 

 II, Part I. 



§ J. H. Rep., 1838-39, II, Part I, pp. 6-18. 



II See Report of State Treasurer for Jaji. 9th, 1840, in J. H. Rep., 1840, II. 



