First Board of Public Works and Internal Improvements: 1825-1850 21

ever, was willing to accept the responsibility of imposing such levies. Gov. William
Grason, a Democrat, proposed a property tax in 1839, but the General Assembly,
though controlled by the Democrats, refused to enact it. By 1841, however, time had
run out. Without a new source of revenue the state would be unable to meet the interest
payments due in 1842.

With its back truly against the wall, the 1841 legislature yielded and reluctantly
levied a property tax of 20 cents per $100 of assessable property. The tax created
political reverberations in the ensuing gubernatorial election campaign, but from a
fiscal point of view it was a case of too little too late. The Democrats charged the
Whigs, who they said had controlled the state since 1830, with being profligate; the
Democratic candidate, Francis Thomas, accused the Whigs of having "squandered the
public money, bankrupted the treasury, and imposed an onerous Direct Tax." It was
a legitimate and successful campaign issue. Thomas won the election (by 479 votes),
and the Democrats regained control of the House of Delegates.³⁰

Unfortunately the property tax did not provide the needed revenues. The assess-
able base upon which the tax was laid was too small, and thus under the best of
circumstances the yield would have been inadequate. Moreover the counties were
negligent in collecting the tax. As a result Governor Thomas had to suspend payment
of the interest due in January 1842—a suspension that was to last for five years.³¹

With the state now facing bankruptcy, people scrambled for ways to discharge
the debt, ranging from new taxes and assistance from the federal government to liq-
uidating the state's investments, severely retrenching governmental expenses, and
outright repudiation. In 1843 the General Assembly decided to sell the state's in-
vestments in the various transportation projects, believing that $11,700,000 could be
obtained for them. In fact, despite advertisements in both European and American
newspapers, only one bid for one stock was received, and it was rejected because it
was less than the minimum acceptable price.³²

In an effort at fiscal frugality the legislature reduced the salaries of various state
officials, including the governor, abolished other positions entirely, and decided to
meet biennially instead of every year. In 1844 a special tax on the state debt itself
was imposed. Initially the tax (one-fourth of 1 percent) was levied only on the assessed
value of the state debt held by nonresidents, but the following year it was extended
to Marylanders as well.³³