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



tax assessed was $416,794.85, only $33,292.77 were collected. Again, 

 in 1842, but $486,635.85, including arrears, were received, while 

 for the fiscal year 1844 out of $751,210.11 paid into the treasury 

 only $143,099.06 Avere collected from the assessments of that year. 

 But, Imd the full $600,000 been collected annually, this amount 

 would have been entirely inadequate to preserve the state's credit. 



The Act of May 4th, 1841,* entitled "An Act to provide revenue 

 to meet the demands of the treasury, and for other purposes" was 

 a new device to help meet the pressing needs of the time. By it 

 provisions were made for borrowing not more than .$3,100,000 under 

 the following prescribed conditions : — Certain banks in the state 

 were authorized to subscribe to the stocks issued. The amount of 

 these subscriptions, in notes of the respective banks of the denomina- 

 tions, one, two and five dollars, was to be placed in the state 

 treasury. The paper thus authorized to be issued was to be with- 

 drawn from circulation on or before May 4th, 1844. These notes 

 were exchangeable, upon presentation to the bank of issue in amounts 

 of not less than $100, for an order on the auditor general for a 

 certificate of an equal amount of stock created for their redemp- 

 tion. The banks got one per cent, interest on the notes until they 

 were redeemed. Moreover, they were to be received in payment 

 of debts due to the commonwealth, they could be re-issued, and 

 each bank issuing them was required to receive its own notes at par 

 in payments due to it. It was thought that, by making the redemp- 

 tion of the new issue depend upon the good faith of the state as 

 well as upon that of the banks, a safe and reliable currency would 

 be constituted. t The amount of this paper, popularly known as 

 "relief notes," that was issued originally was $2,220,265. As might 

 be expected, it rapidly depreciated^ and soon became the only 

 medium in which the state received its revenue. Consequently, 

 instead of helping the state out of its financial embarrassment, the 

 . relief notes made matters worse. 



And now came the climax to the steady progress towards state 

 bankruptcy. By resorting to the various expedients already men- 



* See Laws of Pennsylvania, 1841, p. 307. This act was passed over the 

 governor's veto. 



t Hunt's Mcr. IMag., XX, 1849, p. 261. 



fin 1842 the notes were at a discount of from 10 to 20 per cent. For 

 ilieii- later history see Worthington, Hist. Sketch of tlie Finances of Penn- 

 sylvania, p. 56. 



