[Sidenote:  Counties palatine in England] [Sidenote:  Charter of Maryland] After the downfall of the two great companies founded in 1606, the crown had a way of handing over to its friends extensive tracts of land in America.  In 1632 a charter granted by Charles I to Cecilius Calvert, Lord Baltimore, founded the palatinate colony of Maryland.  To understand the nature of this charter, we must observe that among the counties of England there were three whose rulers from an early time were allowed special privileges.  Because Cheshire and Durham bordered upon the hostile countries, Wales and Scotland, and needed to be ever on the alert, their rulers, the earls of Chester and the bishops of Durham, were clothed with almost royal powers of command, and similar powers were afterwards granted through favouritism to the dukes of Lancaster.  The three counties were called counties palatine (i.e. “palace counties").  Before 1600 the earldom of Chester and the duchy of Lancaster had been absorbed by the crown, but the bishopric of Durham remained the type of an almost independent state, and the colony palatine of Maryland was modelled after it.  The charter of Maryland conferred upon Lord Baltimore the most extensive privileges ever bestowed by the British crown upon any subject.  He was made absolute lord of the land and water within his boundaries, could erect towns, cities, and ports, make war or peace, call the whole fighting population to arms and declare martial law, levy tolls and duties, establish courts of justice, appoint judges, magistrates, and other civil officers, execute the laws, and pardon offenders.  He could erect manors, with courts-baron and courts-leet, and confer titles and dignities, so that they differed from those of England.  He could make laws with the assent of the freemen of the province, and, in cases of emergency, ordinances not impairing life, limb, or property, without their assent.  He could found churches and chapels, have them consecrated according to the ecclesiastical laws of England, and appoint the incumbents.[4] For his territory and these royal powers Lord Baltimore was to send over to the palace at Windsor a tribute of two Indian arrows yearly, and to reserve for the king one fifth part of such gold and silver as he might happen to get by mining.  “The king furthermore bound himself and his successors to lay no taxes, customs, subsidies, or contributions whatever upon the people of the province, and in case of any such demand being made, the charter expressly declared that this clause might be pleaded as a discharge in full.”  Maryland was thus almost an independent state.  Baltimore’s title was Lord Proprietary of Maryland, and his title and powers were made hereditary in his family, so that he was virtually a feudal king.  His rule, however, was effectually limited.  The government of Maryland was carried on by a governor and a two-chambered legislature.  The governor and the members of the upper house of the legislature were appointed by the lord proprietary, but the lower house of the legislature was elected, here as elsewhere, by the people; and in accordance with time-honoured English custom all taxation must originate in the lower house, which represented the people.