instead of shifting this single year's proportion of it to another generation.

If the Commonwealth should see fit to assume the direct tax, and to pay it, (at the commutation allowed by Congress to the States,) the land and real estate of the people, as I understand the Act of Congress, will then and thereby be relieved. The payment will have been made out of its own Treasury; and if the State should have a sufficient surplus of funds, it might never be levied upon the people. Or, if otherwise, it would doubtless be competent for the State,-being authorized by the law "to assess, collect and pay" the direct tax "in its own way and manner," "and to use for this purpose "any valuation list" last made, "for the purpose of State taxation,"-to assess and collect the money in any way known to its own financial system. Thus Massachusetts might assess whatever sum it might need therefor, on all property usually assessed in State taxation, and thus distribute the burden more equally.

Interest of Money.

Thoroughly convinced that the people of this Commonwealth are competent to make their own contracts without the guardianship of the State, I urge upon you a modification of the usury laws. The evils of our present system are of the most serious character. An immense amount of capital is yearly sent to other States for investment where higher interest is allowed,

while our citizens are daily induced to violate laws which they cannot respect. Thus in an ineffectual endeavor to protect men in making their contracts, we lose our capital, cripple our business, teach the people to be cunning and dishonest, and bring the laws of the State into contempt. That six per cent. is the exact value of money no one will pretend, while the National Government pays seven and three tenths for it, and the market rate varies from three to twenty-four per cent. according to the demand. The present laws bear severely upon borrowers, for the lenders charge for the risk they run in violating the law. It would be wiser to legislate capital into our own borders, allow men to make their own bargains, provided they act honestly, and to encourage direct and open-handed action, by laws commanding respect.

Banking.

I

The report of the Bank Commissioners will exhibit the condition of the banks of the Commonwealth. renew my suggestions of last year that a conservative course of legislation is best for our banking system, and that radical changes should be adopted with caution, and not without mature consideration. I commend to your attention the able report of the Commissioners, and especially its suggestions in regard to institutions for savings. Their history, and a mass of instructive statistics, are comprised in the report. The facts stated, strikingly illustrate the

industrial power and thrift of our people. And the wisdom which began these institutions for the benefit of those desiring to invest and accumulate their small savings, will, I doubt not, watch over them, regulate their management, and make them an element of abiding strength in the State.

A bill reported by the Committee on Banks and Banking, at a late hour in the regular session of last year, "to authorize towns and cities to receive and invest savings," was, at the request of the Committee, printed and referred to the present General Court. The scheme is explained and eloquently enforced in the Sixth Annual Report of the Insurance Commissioners on Loan Fund Associations, prepared for the present Legislature.

The recommendations emanating from the Secretary of the United States Treasury, involving a general scheme for a national currency of Treasury scrip, or notes taking the place of the issues of the banks incorporated by the States, demand the attentive and critical examination of all persons concerned in finance.

The adoption of an exclusive national currency, having many apparent advantages, would probably involve an important change in the revenues of this Commonwealth by necessitating a repeal of the bank tax from which so large a part of it is derived. And it may be questioned how far, at the present moment, the banks of the northern Atlantic cities will deem it reasonably practicable to carry the heavy loans with

which they accommodate the Government of the Union, and in addition thereto, to retire their own circulation, receiving from the Federal Government its own notes for a new medium of circulation, for which, of course, they must pledge adequate security.

The argument upon a subject covering so many intricate questions of a practical science so abstruse, and as a science so incomplete, as that of banking, could not be fitly treated on an occasion like this. Nor can I avoid the confession that as yet I do not perceive the way open to a clearly satisfactory opinion in regard to it. But, since the share this Legislature may have, if it chooses, in educating the public opinion, and assisting the judgment of Congress, is not inconsiderable, I take the liberty of bringing it prominently before the mind of the General Court.

The Troy and Greenfield Railroad.

By chapter 202 of the Acts of 1860, the Commonwealth appropriated "a loan of the State credit, to enable the Troy and Greenfield Railroad Company to construct the Hoosac Tunnel." In this Act, of the $2,000,000 loan, $650,000 is appropriated to the completion of the railroad east of the mountain. The State does not undertake to build this railroad, nor to determine the precise manner in which it shall be constructed. The only specific thing required by

the law is, that "the rails shall weigh not less than fifty-six pounds to the lineal yard." And the provision is in general terms, that "no expenditures shall be required merely for the purposes of ornament, but the work shall be substantially performed." The $650,000 is to be loaned towards "the whole of the graduation, masonry, bridging and superstructure of the unfinished portion of the road east of the Tunnel." And the scrip is to "be delivered on the road, in the proportion the value of the work done, bears to the estimated cost of the whole work and materials required on the portion of the road aforesaid." The issue of scrip is made dependent on the certificate of the State Engineer, who "shall monthly, immediately after the first day of each month, estimate the proportion which the work done upon the road since the preceding estimate, bears to the whole of the work required to be done in the graduation, masonry, bridging, and superstructure of said railroad east of the Hoosac Tunnel." It becomes, therefore, the duty of the engineer to make the following inquiries, monthly, viz. :

How much work remains to be done and material to be furnished in order to complete this piece of road in a substantial manner?

How much has been done during the last month for which I am now making an estimate?

How much of the State loan of $650,000 remains to be advanced?