If the progress of the public works should not be arrested, the emigration to the State for the next five years must be very great; and as , capital and producers flow into the country, improvements will be extended, and real estate rise more rapidly in value, and a corresponding increase in the amount and value of personal property will ensue. In view, then, of this accession of population and increase in the available resources of the State, your committee cannot see any just cause f alarm on account of the deficits which they have shown will probably exist for a few years in meeting the interest on loans. Your committee would not, however, so far reflect on the sound intelligence of the people as to promise them the benefits of an extensive system of internal improvements in the State without their paying an equivalent for them. But if the people can be assured that this system can be carried on and completed by the aid of a moderate tax, for a few years only, and that it will greatly add to the value of individual possessions, afford a cheap and certain means of transit to market for all our productions, develope the dormant resources of the State, augment her population, and elevate her character at home and abroad, they will be satisfied to sustain it and push it forward to completion. Having given the quantity of land subject to taxation in the several years in which deficits will occur, and the rate per acre necessary to make up these deficits, the committee will make one additional remark in relation to the taxes on lands. If the lands should be taxed in proportion to their value, and not by the acre, it is very plain that those lying nearest to the public works, and which have been most enhanced in value by their construction, will bear the greatest share of the burdens; and, perhaps, it will not be too much to say that a small per centage on the increased value of the lands in the vicinity of the public works, given to them solely by their construction, will go very far towards meeting the deficits without imposing much additional burden on lands lying remote from them. In reference to the foregoing statements, it is to be observed that they are based upon the present amount of the banking capital of the State, and no view has yet been taken of its probable increase as the commercial wants of the State, and the future development of its resources may render judicious and necessary. The mode of resorting to the profits of banking operations, for promoting the prosecution of works of internal improvement, has been adopted by many of the States in the Union with signal success; and this policy can no doubt be pursued in this State with advantage to the great financial interests of the State itself, and at the same time afford valuable facilities to her citizens. In view of the probable increase in the banking capital, on the part of the State, the following table has been prepared, to exhibit the annual surplus and deficits which would probably exist in the event of an increase of the banking capital, $1,000,000 per year, for the next four years. In this table, the surplus and deficit in each current year is given opposite to that year, and the premiums and exchange on the bonds sold for the increase of Bank capital are calculated at two per cent. and the tolls are assumed to be the same as given in the foregoing statement. Table showing the probable surplus and deficits in the fund for the payment of interest on internal improvement bonds, predicated on the increase of the banking capital of the State, $1,000,000 per annum, for the next four years. Years. Increased bank Probable de- Probable deficit when the ficit when bank capital capital is inis $3,000,000. creased. Probable sur- Probable sur ent bank cap- plus on increased bank capital. NOTE.-Fractions less than one dollar are omitted. There being bills now before the Legislature proposing to increase the banking capital, on the part of the State, at the present session, it may not be improper to allude to the effects of the proposition on the interest fund for internal improvement purposes. The surplus, as given in the foregoing statement, on the first of January, 1840, is $178,449; and on the first of January, 1841, $66,173. Should an additional bank capital of $3,000,000 be now authorized, and a portion of this amount constituted a trust fund, to be loaned on real estate at long periods, for the accommodation of the agricultural interests, it is the opinion of the most experienced financiers in the State, that the Banks can make dividends of ten per cent. thereon. It is also believed, from the present condition and prospeets of the money market in Europe, that the bonds, if seasonably put into market, will command at least five per cent premium, and the exchange thereon would produce a nett profit of at least 6 per cent.Then, $3,000,000 bonds, at 6 per cent. is Six months' dividends up to January 1, 1840, at 4 per cent. Surplus on the 1st January, 1840, as shown in statements and table, is Making the surplus on the 1st January, 1840 $180,000 60,000 $240,000 178,449 $418,449 As it is uncertain whether this proposition will meet with the favorable action of the Legislature, the committee will not trespass on the time of the House to carry on the calculations for subsequent years. It is obvious, however, that if the proposition should be adopted, and its results are not overrated, it would go very far to reduce the amount of probable taxation as exhibited in the preceding statements. Your committee would wish to avoid all imputation of indulging in speculative calculations in reference to the resources of the State to meet the interest accruing upon the loans for internal improvements, and they hope that they will not render themselves obnoxious to that charge by adverting to another source of revenue. The committee on Internal Improvements, in the last Legislature, taking into view the important practical results of the grant, by the General Government, of the canal lands in aid of the construction of the Illinois and Michigan canal, submitted to the consideration of the Legislature the importance of procuring lands along the line of the public works, to be enhanced in value by their construction. In accordance with the suggestion of the committee, authority was given by the internal improvement law, to the Commissioners of the Public Works to enter lands along the routes of the several works. The memorable revulsion in the fiscal affairs of the commercial world which shortly afterwards ensued, and the difficulty which subsequently existed in obtaining the description of funds receivable in the land office, tended to frustrate, in a good degree, this design of the Legislature. Entries, however, have been made, to some extent, by the Commissioners; and your committee entertain the belief that if a special fund, say of $1,000,000, could be set apart by the present Legislature for the purpose of being vested in lands near the line of the public works, and in securing important town sites along the routes, and the works should afterwards be properly located, with a view to State interests, the profits on this fund so invested would be sufficient to meet any deficit in the payment of interest on loans, and create a sinking fund sufficient to reimburse the original investments. Your committee flatter themselves that the calculations they have made in regard to the profits and dividends on loans and bank stock will not be considered extravagant. And if they can be as successful in demonstrating the probable accuracy of their calculations in reference to the revenue to be derived from the works themselves, they will have done all that can be necessary to satisfy the most prudent that no apprehensions need be entertained of burdensome taxation. In prosecuting the inquiry into the probable revenue to arrise from the public works, the committee have to assume data which is general in its character, but which they believe is within reasonable and tenable limits. The railroad being commenced at the navigable rivers on the borders of the State, and extended into the interior, cannot fail to commence doing a limited business as far as completed; and both the amount and profits of this business must rapidly increase with the extension of the lines. During the years 1839, 1840, and 1841, at least 300 miles of the railroads, together with some important river improvements, should be completed. These river sections of the railroads will run through the most populous and improved portions of the State, and have their termini at important trading towns. The committee have assumed, in their calculations, that up to the first of January, 1842, when the sum of $7,000,000 will have been expended on the public works, the nett receipts for tolls and water-rents will have been only $60,000. It is supposed that this estimate is within reasonable bounds, and cannot be objected to; and the ratio of increase of one per cent. on the expenditures made two years previous to the date of calculations is considered equally tenable. Your committee propose to take the railroad from Springfield via Jacksonville as a basis of calculation for the probable revenue to be derived from the river sections of the unfinished lines. It is presumed that this road may be completed and in operation by the spring of 1840. But before entering into this calculation they will take occasion to call the attention of the House to one road in the western country that bears a strict analogy to the river sections of our railroad system. The road referred to is in the State of Michigan, extending from the city of Detroit into the interior to Ypsilanti. This work, about thirty miles long, has recently been put into operation, and is said to be one of the most profitable in the United States, yeilding about $80,000 in ten months' operations, or at the rate of about $3,200 per mile per year. Your committee regret exceedingly their inability to furnish the official information in detail in reference to it; but they will state that the information they have received, and as stated above, is from such an questionable source as to justify them in embodying it in this report. un Your committee will also take this occasion to express their opinion that these river sections of our railroad system admit of no comparison with those detached divisions of the canals of Pennsylvania which hang as an incubus on their system. These detached portions of her great system are constructed parallel with, and on the immediate banks of, the Delaware, and the North and West branches of the Susquehanna. They form no continuous lines of communication, without transhipment, to great commercial marts; and they have been so frequently and so seriously interrupted by the breaking of the feeder-dams, in spring freshets, and by other casualties, that the upper country do not depend on them, and the descending trade, therefore, seeks a market in the old and ordinary modes of transit. The Springfield and Jacksonville road, with the Naples branch, is about 60 miles in length, and will cost $600,000; to which may be added $50,000 for the necessary machinery and motive power to put it into full operation. The committee assume the following for the probable daily business on the road, viz: 20 passengers in each direction, at 6 cents per mile, or $3 60 $144 00 20 tons of imports and exports in each direction, at 5 cents per mile per ton 120 00 25.00 289 00 United States' mail Deduct for repairs, superintendence, labor, motive power, and wear and tear of machinery, $131 per day, equivalent to $655 per mile per year Nett profit per day 131 00 158 00 Calculating 300 days in the year, the annual income would be $47,400, and for half the year 1840, and up to the 1st of January, 1842, $71,100, being $11,100 more than is allowed by the committee for the nett revenue from the whole of the public works in operation up to that time. The tonnage, of 40 tons per day on this road, amounts to 12,000 tons per annum; and it is incumbent on the committee to examine whether this is or is not an extravagant calculation. The committee have not been so fortunate as to have at their disposal any definite statistical account of the imports and exports of the interesting portion of the State penetrated by the above work; but having at their command the following statement of the exports and imports of Galena, for the year 1838, they will submit that as data from which inference may be drawn of the probable amount of tonnage on the road in question. The exports of Galena and its vicinity, in 1838, are stated to be-in lead The imports may be derived from the number of steamboat arrivals from below, which were 228 boats, aver aging 100 tons each-making 22,800 tons. Of this amount, there were the following, viz: 6,000 barrels of flour, or 600 tons 8,000 tons. 1,100 21,700 tons. 29,700 tons. Total imports and exports (provisions excepted) From the above statement, it appears that upwards of 20,000 tons of merchandize and foreign articles of use and consumption are necessary to supply the demands of the country depending on the town of Galena. Should this calculation be approximately correct, it is presumed that the estimate of 12,000 tons of exports and imports on 60 miles of railroad, traversing a country so well improved and densely populated as is that on the route of this road, and which produces a large surplus of the heavy staples of the country, is by no means exorbitant. |