Maryland State Archives

2001/5/17

2001/5/4/

I finally got into ecpclio. Don't know why I coudln't from home. Here is a very rough draft of the comptroller's report . Improvments Coming!

2001/4/16

Again, I've added the historical context in the notes section, should be available there. I think this still needs some filling out but I'm just not finding that much information on this specific time period. Aside from the political machinations of Rasin/Gorman it was a generally calm period in Maryland.

• Balance upon entering office of treasury $44,240.98.
• low funds were due mainly to the "loss to the Treasury from the failure of accustomed receipts"
• Keatting attacks the system of legislation in MD that requires special funds be raised and dedicated to special purposes and that the General Treasury is left to take care of itself. He believes this to be untenable financially as it means the either the credit of the state be disregarded by adhering to the system or the system be disregarded and special funds continually borrowed against.
• shows the treasury is in debt $344,299.84 to the oyster fund, public school tax, and bounty tax (after entire treasury balance would be used to pay, original indebtness is 548,465.72). Added to this problem is the need for a new loan every time an old loan comes due and a tax to pay for it.
• Bounty tax of 5 and 1/2 cents was set up to pay for the Maryland Defence Loan authorized by the Act of 1868 and falls due in 1883. Most of the principal had been paid except for $83,757.74,which has been borrowed by the General Treasury.
• The lack of accustomed receipts and increasing amounts of unproductive assets required a new loan be passed to meet the Treasury's needs. (Act of 1878 ch 238)
• Unproductive assets are listed as: the failure of the Susquehanna and Tide Water Canal Companies to pay the interest on the mortgage due the State; the failure of the Baltimore and Ohio Railroad Company to pay any portion of the amount due the State from the one-fifth of the receipts from passengers on its Washington Branch and also from its failure to pay the accustomed dividends on the stock of the State in the Washington Branch.
• In 1877 the President of the Philadelphia and Reading Railroad wanted to pay interest in cash. The governor refused (due to a defect in the language) but the legislature agreed. In Dec of 1878, the Philadelphia and Reading Railroad was trying to get out of payment because a suit by one of the holders on a loan on the Susquehanna. It was the view of Keating that this suit did not have any bearing on his lease or their contract with the state.
• pressing a suit against tax collectors for monies in arrear for more than a year.
• calls for recall of the Bounty tax-in total state had paid $8,042,152,99.
• calls for repeal of state payment of Tobacco Inspectors.

• Once again arguing for the need to allow by law the operation of the General Treasury of borrowing against special funds.
• reports the Maryland Defence Loan will fall due in 1883 and the General Assembly must make provision for its payment. The Treasury will not be in any position to make payment on this debt and is asking for a new loan to be authorized. The new loan interest rate should be reduced to 5% interest and if possible 4%. He also asks for as a better plan for the management of the revenue, a healing clause to the Constitution, extending a, general pardon for the non-observance of Sec. 34, Art 3 stating a constitutional prohibition against borrwoing is inpractical
• In the spring when monies were running low, the clerk of the court of common pleas (Rasin) anticipated his usual June payment and gave the use of $50,000 of license money.
• There will not be a large permanent surplus but large temporary balances are necessary. keating wants balance, for the swings to be reduced and for the treasury not to have to go elsewhere for temporary relief.
• Still over a million dollars in uncollected taxes.Too many agents or instrumentalities, to whom and through whom the State must look for this branch of its revenue. The plan of making the collection of the State tax independent of the collection of the municipal or county tax, and of assigning large districts to each collector, and of subjecting the collector to removal at the will of the Comptroller, and of imposing a fine to operate periodically upon the tardy tax payer, being the opposite of the present plan, might work opposite and more satisfactory results. submitted to the consideration of the General Assembly.
• Also suggests holding municipalities wholly responsible for collection and then payment to the treasury of taxes.
• state that corporations are unwilling contributors to the State's revenue. As a class they are the wealthy embodiment of non-taxpaying investments, and yield only to inquisitorial demands for their assessable assets. It is eminently proper, therefore, and in the interest of the State, that there shall be some one assigned to the cultivation and improvement of this source of revenue.
• Again asks for repeal of tobacco inspections as a burden to the state.
• request the bounty law be repealed-too costly for state.
• Costs of the oyster fund are more than its revenues. Oyestering is a imbedded Maryland wealth, the state should gain revenue from it. Tribute should be demanded. The oyster navy should be reconstructed so as to ensure to the State a licence for every dredge or scoop that is used in her waters; and those who use them should be, required and made to pay a remunerative sum for the privilege, under a heavy penalty for dredging or scooping for oysters without a licence. A steamer, or steamers if need be, fleet and well equipped, are necessary to this end and object
• Wants taxation extended and property and wealth alike subjected to the burden without exemptions.

• Treasury in best shape yet-enters with an ample balance and no extraordinary demands on it.
• tax of 1 and 1/2 cents going to payment of interst on the Treasury Relief Loan and the balance put in a sinking fund toward the principal. Investmensts were made in 5% sterling bonds (NOTE: a lot of confusing financial speak involved here: what are sinking funds anyway?
• improvement in years revenue due to increased receipts from the register of wills, railroads, tax collectors, insurance companies, and the clerks of court
• Bounty laws were repealed. Went into effect May 1, 1880
• Mortgage on Susquehanna and Tidewater Canal is still unproductive. The Philadelphia and Reading Railroad on terms of lease is supposed to pay interest. However, no payment has been made
• office of the supervisor of Tobacco Warehouses abolished and salries for other employees reduced. Examination of accounts falls now to the Comptroller.Hopes that with careful supervison, warehouses will become self-sustaining

Historical Background: Maryland Between 1875-1885.
Sources Consulted:
Brugger, Robert J. Maryland, a Middle Temperament 1634-1980. Baltimore: John Hopkins Press, 1988.
Radoff, Morris L (ed). The Old Line State. Annapolis: Hall of Records Commission, 1971.
Walsh, Richard and William Fox (eds). Maryland: a History, 1632-1974. Baltimore: Maryland Historical Society, 1974.

Political Aspects

The history of Maryland between 1875 and 1906 was marked by the political rule of two men: Arthur Pue Gorman and Isaac Freeman Rasin. Rasin was the political boss of Baltimore City and Gorman held various positions within the Maryland democratic party, eventually becoming an U.S. Senator. Rasin controlled the party machinery in Baltimore City while Gorman constructed a political federation in the counties. Together they had effective control over the General Assembly and the democratic party for almost 25 years.

Gorman controlled democratic strategy in the gubernatorial election in 1875 and was largely responsible for the election of John Lee Carroll as governor in 1875. However the convention and election in 1875 were widely accused of being corrupt and ultimately had far reaching consequences in Maryland’s political history. The controversies of the 1875 election, which ranged from repeat-voting and the stuffing of ballot-boxes to violence, created a group of independent and reform-minded Democrats who, along with the Republicans, were committed to opposing the Gorman-Rasin machine. The opposition focused on the organization’s power and how it was used. However, most voters during the 1870’s and 80’s were extremely partisan and did not sway from the Democratic party.

Gorman’s own political aspirations included the U.S. Senate which he obtained in 1880. However, before running he allowed a rival, William T. Hamilton, to be elected in 1880 as governor to avoid a power vacuum at home. Gorman feared losing control of the party machinery and did not want anyone in the governorship who could threaten his position of control. Ultimately, there was little threat from Hamilton’s governorship because of the election of officials loyal to Gorman including the comptroller, Thomas J. Keating.

The Gorman/Rasin leadership dominated Maryland politics for 25 years and its primary aim was to maintain and expand their power, to serve their constituency, ranging from farmers to businessmen, and lastly to promote the general welfare and prestige of the state. These divergent interests often led to ineffective legislation on the part of the government for fear of alienating one sector of their support. For instance, there were frequent instances of attempts to appease labor by creating factory safety codes and on the other hand serve business interests by creating large loopholes in those same codes.

The difficulties of governing Baltimore during this time period revealed the limitations of the state’s rule. Like many American cities, Baltimore saw unprecedented growth due to industrialization after the Civil War. However, the Gorman/Rasin machine believed that that manufacturers would not go where the taxes were excessive. Therefore, Baltimore had to make do with low city budgets and debt floating capital improvement loans. Schools, sanitations systems and other urban ills were thus largely neglected. This in combination with the cronyism, bribery and corruption of the Gorman-Rasin rule led to contributed to the rise of the progressive movement. The Baltimore Reform League was organized in 1885 with the goal exposing corruption, winning support for change, and throwing the Gorman/Rasin politicians out of office.

Economic Aspects

The 1870’s saw a major agricultural depression in Maryland. After the civil war Maryland agriculture lost its national significance and the state experienced increasing industrialization, particularly in the manufacturing sector. 1877 saw a major economic depression in the state. Many companies were at the edge of bankruptcy in 1877 due to competition and rivalries that had gotten out of control. There were also widespread management and labor conflicts in the mining and railroad industries revolving part around wage reductions. There were large railroad labor strike in July of 1877 against the B& O railroad. The government took the side of the railroad, sending the Maryland militia against strikers in Cumberland and rioters in Baltimore,

Legislative, Social and Other Aspects

The Old Line State states there were little political issues of note after 1880 (and the political maneuverings of Gorman from 1875-1880). State and local government were primarily concerned with matters of legislative and administrative routine (113). However, items of interest are listed below:

1878-The B&O was forced to relinquish the tax-exemption provision of their charter in exchange for legislative concessions regard the percentage the state received from tolls.

Political lobbying began around in 1882 and had increasingly power effect on the legislators. Hamilton spoke out against lobbyists in the same year.

The labor unions had a couple of successes, primarily the passage of the Mine Safety act in 1876 and the establishment of the Bureau of Statistics and Information in 1884.

The General Assembly established an Insurance Bureau in Comptroller’s office in 1872 . It became a separate agency in 1878.

Oyster harvesting (by dredging) took off after 1865. There was a record 15 million bushels harvested in 1884. The oyster police force was founded in 1868 but by the early 1880’s it was completely ineffective and had become a job for Democrats who earned a spot on the payroll.

MD and VA nearly went to war over Chesapeake boundaries and rights to oysters on the bottom. 1877 commissioners redrew the boundaries. However, oystermen complained that the Virginian police did little to stop Virginians from crossing the line. In 1883 Marylanders shot at Virginians who came into their waters and raided their beds. The dispute over the oystering was not resolved until the 1890’s.