The State debt on the 1st day of October, 1844, exclusive of the surplus revenue, deposited with this State, consisted of State bonds, as set out in the foregoing statement, and amounts to the sum of $3,152,261. Of this sum however, two millions, two hundred and thirty thousand dollars are bonds issued for capital stock of the State, in the Bank of the State of Missouri, and are now in said bank unsold: consequently cannot properly be considered as a debt until sold. and if sold would be met, by money in' bank instead. The further sum of two hundred and seventy-two thousand, two hundred and sixty-three dollars-sixty is in stock paid for by the sale of bonds, and should be equivalent to that amount of money.

If the amount of the first mentioned bonds should be deducted from the whole amount as set out above, it would leave the State debt nine hundred and twentytwo thousand, two hundred and sixty-one dollars, that being the exact amount of State Bonds sold and disposed of. And if the amount of State Stock paid in as above mentioned, should be deducted also, as being so much money, the actual State debt would be the sum of six hundred and forty-nine thousand, nine hundred and ninety-seven dollars and forty cents.

Two hundred and fifty-three thousand, two hundred and sixty-one dollars of the bonds sold, are bearing ten per cent per annum interest- they have ten years to run from May and June 1811, but are redeemable at the option of the State in five years from sale.

It is thought that these bonds might be redeemed at the earliest day, by the issue of other bonds, bearing a less rate of interest. I suggest the matter for the consideration of the General Assembly.

From the best estimate the Auditor has been able to make of the receipts and expenditures of the Treasury for the next two fiscal years, commencing 1st October last, he is forced to the conclusion that there will be a deficit in the Treasury annually, of from 45 to 50 thousand dollars. It is a matter well worthy the consideration of the General Assembly, to inquire how this deficit is to be supplied.

The interest on the State Bonds sold now, amounts to nearly $71,000 per annum, which interest all must admit, should be promptly met as the same falls due, if this sum should then be deducted. from the ordinary revenue, according to the present rate of taxation, which will amount to not exceeding $140,000 per annum for the next two fiscal years, will leave only seventy-nine thousand dollars to pay the ordinary expenses of the Government, which at the lowest estimate, will not be less than one hundred and twelve or fifteen thousand dollars. To supply this deficiency, one of two modes must be resorted to, to wit: Increased taxation or the issue of State bonds to be sold; for myself I am decidedly in favor of the former. If the ratio of taxation were increased from one-sixth of one per centum, to one-fifth of one per centum on all objects of taxation, and the poll tax increased to fifty cents, for a limited period of years, I think the object would be attained without any perceptible increase of the burdens of the people. The increase last mentioned would greatly augment the revenue, and I am free to say, that I confidently believe it would be borne with cheerfulness by all our citizens, when they learn that it is necessary to ensure so commendable an object as the preservation of our public faith in meeting our moneyed engage

ments.

The people of this State, without the shadow of a doubt, would abhor even the semblance of favoring repudiation of their public engagements of any kind, and particularly those of a financial character.

All of which is respectfully submitted.

HIRAM H. BABER,

Auditor of Public Accounts, of the State of Missouri.

A TABULAR STATEMENT