The New York Herald Newspaper, January 8, 1845, Page 1

Vol. XI., No, 7—Whole No. 3960. [GOVERNOR’S MESSAGE.) To the Senate and Assembly : i { Fetiow-Citizens—The Constitution makes my duty to communicate to you the condition the State, and to recommend matters for your consideration as I shail judge expedient. ‘The great and diversified interests of the State deninding peers supery: “s nm, erie and id, impose a vast responsi upon the tad 3 eiute. to present theirfcondition so fully i you as to facilitate your labors, accompanied wit recommendations calculated to lead you te w and just conclusions, is not less responsible. It ig one upen which I r with diffidence, and yet I make the attempt cheerfully, feeling that ¢ duty has been aesigned to me by a constituency al- ways indulgent to honeet effort and upright inten- tion, and which never demands from a public sef- vant more than, thus aided and directed, he isab! 10 Fe prentandsleniling wihiain oflegidiion alo e great and leading subjects of legislation #0 sattieanely connected wah the state of our finances, as to render it proper toexamine first the financial condition of the State. Our revenues are large, and should be ample fdr a State having only the expenses of its internal government to meet. If they prove unequal to our necessities, the interence will be almost unavoide- ble that errors now exist, or have existed, in our financial policy and legislation. A general view of the current annual. het: of the State, taken together, according to the re- ceipts of the fiscal year, ending on the S0th of September last, is as follows :-- i ‘he total amuunt of receipts on account of the General Fund, including the whole of the State tax, of one mill bik ieee and pelos the sum receir \erenis i ‘ for temporary loans, was...... 8, ‘The entire revenues of the “anal Wet in- cluding allthe receipts for tolls, water H interest, canals, for all the 9,350,616 pe 183,696 BL 18,490 34 kien 937,304 25 —— Making atotalof.......... + $3,918,4¢5 06 revenue, he if be The revenues of the Literature Fund were The revenues of the United States Depo: Fund after deducting $106,412 56, trana- ferred from revenue to capital, were. . :. Various other funds which produce a the form of interest upon moneys invested, wil found meationed in the fiscal reports, such as the Bank Safety Fund, various special sinking funds, the Marinere’ Fund, and the like, all of which are, in their character, trusts in the hands of the State, for specified objects, in no way connected with the revenues and expenditures of the State government. i The revenues before enumerated are those which enter into the annual expenditure of the State, and constitute the means for-those expenditures, ahd they are the whole of such means annual in their nature, as\ascertained by the actual receipts of the last fiscal year. Some portions of these revenues, with the funds from which they are derived, dre pledged by the constitution to particular objects, and are‘beyond the power of the Legislature for auy other application. Such isthe eutire capital of the Common School Fund proper, and its reve- nues, The capital is made ‘‘a perpetual fund, the interest of which shall be inviolably appropriated and applied to the si of common schools throughout this State.” So the tolls collected ugon the Erie and Champlain Canala, with the fund preperly deneminated the Canal Fund are consti- tuttonally pledged for the payment of the interest and the redemption of the principal of the debt contracted tor the construction of those cai Other of these revenues are, by permanent la: appropriated to specific objects. Such is the Lit rature Furd, the revenues of which are expended id aid of the incorporated academies of the State. The revenues of the United States Deposite Fund, algo, are, by a permanent law, opriated to ob- jects of education or specified charities ; and what- ever changes may be thought expedient or just} in e distribution of the fund to the specified ob- jects, it is not sy; that a diversion of Tevenues to anyother general class of objects of expenditure will be contemplated. This presentation of all the revenues of the collectively, with a bref explanation as to portions specifically set apart by the constitution or the laws, for exclusive application to particular/ob- jects, it is hoped may enable those not minutelyjac- quainted with our financial arrangements the ter to understand, upon a separation of the var parts, how far means are in fact within the di: tion of the Legislature for general and misce: ous objectsof expenditure. regate the revenues of © | the School Fund proper, constitutionel- ' ly_ pledged to the support of common 8 «+ $138,686 51 ire Fund appropriated by lew in aid of academies.......... 18,490 84 The revenues of the United teeeeeeecees 287,306 26 { 280,031 10 —— And there will remain, .......+ +.» $8,428,084 96 ‘This bolance comprises the revenues of the G al Fund end of the Canal Fund, embracing all the revenues from ail the canals, as well astrom the Canal Fund pro- Bie perk this sam comprising the revenges of Bis Genera Fand, as will be seen, is..... $1,073,249 01 This, however, embracee*the whole of the je tax, wale! by the cae noasleg of a rovide for an he credit arlhe State,” passed | 0 March, 1842, one half of it after | the year 1842. is to be. peid to the Com miasioners of the Canal Fund for the use of | the canals; and there was pA my nl pope suanee of provision, du the lat fiscal year, the sum of,...... 978,107 66 Thus leaving of these revenues Seen to calls upon the General Fund, sumof 795,051 45 Th yments made from the aap re A chargeable to this fund, the last fis- cal year, excluding count ‘emporary loans, and also the payment tothe Canal Fund of half of the mill tax, a1 before stated, were. . + 1,003,788 seats 98 ‘Thus showing that the receipte into the Trea- sury on account of the General Fund, from all sources, ate less by $208,701 98, than the sums charged ty aay the same fund and paid from the » Treasury, for the last fiscal year. ‘This is a comparison of the whole amount of the annual revenues of the General Fund, including all the receipts of a miscellaneous character, with the annual permanent charges upon 0 all pay- ments authorized by special actsof the Legislature, as well as temporary and miscellaneous expenses ‘There was an apparent balance in the Treasury at the close of the fiscal year, of $99,737 26, which, so far as it is available, would diminish the deficit before stated in the receipt of the General Fund. This balance, however, included the sum of $84,858 15, paid to this State out of the the ~ aafes of the public lands of the United States under alaw of Congress, and’ placed in the Treasury by the Governor, to whom the payment was made ; but which has never been brought into the ac¢ounts of the General Fund,or anyother of the tunds of the State, because the islature has directed nodie- po thorized no lication of the mo- ney. Ithas remained in bank by a special contract with the Treasurer, at a stipulated interest. If this sum be deducted from the above balance in the Treasury, there will remain only $15,879 11,asthe real nvailable balance tcable to demandes againet the General Fund. If this sum be deducted from $208,701 98, the deficit in the revenues of the Gene- a: Fand as before stated, it still leaves a deficit of $193,822 87 f By the 5:h section of the ‘‘act to regulate the ac- counts between certain funds belonging to this State,” passed 26th May, 1841, the Commissioners of the Canal Fund are directed to pay to the Trea- sury, on of before the 80th day of mber, In every vear, from the canal revenues, the sum of $200,000. Only one half of this sum has been paid tor the use of the General Fund for the last year, the other half having been withheldto meke up Josse, in the fund pledged for the payment of the Erie and Champlain canal debt, occasioned by the insolvency of certain banks which had loans from ‘tavo, Seat Be oq me a bso vy of 000 wii annual ‘id from the surplus re- venves of the Canal Fuad for the use of the Gene- tal Fund. But, with the whole of this appropria- tion, one half of the state tax, andall its revenues, permanent and miscellaneous, the General Fund, as is shown by the foregoing statement, is wholiy inadeqnate to meet the annual demands upon it. A further and moat important. consideration con- nected with thie fund, ia the heavy debt charged upon it. This debt is $5,634. id is the amount of the positive, unconditional debt charged upon the fund, the annual interest upon which is Foe Ld! A comprises 248 of the bpavies ite ‘mane! ite reveni e debt has beew inetwased by thre eae of ‘euiit 85, the a within the 5 yoats hss sowing revenues NEW YORK, WEDNESDAY MORNING, JANUARY 8, 1845. 80 far from presenting a surplus beyond the annual expenses chargeable upon the fund, are in fact de- ficient, and that the debt continues: to augment. More than three-fifths of this debt was contracted by loans of the credit of the State to rail-road in- corporations, which have wholly failed, and thrown the amount upon the general fund. With- out the debt, the present revenues of the fund would be ample to meet the charges upon it, and would authorize the Legislature moderately to in- crease those charges, when the public interest should be found to require it;@ut with it, and its constantly accruing interes’, the charges upon the fund must be diminished, or ita revenues increased, to prevent @ constant annual augmentation of the lebt. True economy, as wellas sound policy requite the arrest of this process. A portion of the reve- hues of this fund, more than equal to all the aid it derives fromthe mill-tex, is now annually consum- ed in the payment of interest alone, upon this in- ereasing debt. Such an sxpenditare . While it makes taxation perperal, works no public benefit. The money passes from the pockets of the citizens, through the hands of the tax-collector, to the ket of the public creditor, with the loss to the former of the expenses of collection, only that the process may be repeated with the same loss, as re- gularly astime shall bring around the seasons; ahd still the demand is undiminished, the weight of the load unmitigated. To reverse this action is the only remedy for the evil. The revenues should be brought to meet the annual expenditures, and leave @ balance to wear upon the debt, and then each payment of the tax will bring with it hope and en- couragement. The third sub-division of section 2, of the act of ae thie tax, looks to its discen- tinuance, after the present year, through an al in the revenues of the fund to meet and extingu: the debt, without its turther aid; but that expecta- tien cannot be realized, while the debt is increas- ing er the power of these revenues, the tax included. < There is also a contingent debt hanging over this fund, amounting to $1,920,000. This is for loans of the credit of the State to canal and railroad in- corporations, which have hitherto fulfilled their obligations, by making the payments of interest. oped they will be prepared for the reimburse- ment of the principal at the day. This contingent liability presents another reason for preaginen og the condition of the General Fund, taking prompt measures for the gradual-extinguishment of its present increasing debt. After deducting the revenues of the School, Literature, and United States Deposite Funds, from the sq gregate amount of the revenues of the five funds, the balancere- maining was $3,423,864 95 ‘Those of the General Fund having been ex- amined, may new be separate are 1,078,248 01 $2,350,618 94 upon and paid out of fund fiscal year,were 1,777,970 69 Leaving a surplus, over and above the ex- ponies chargeable upon the canals and Canal Fund, for the fiscal year, of, And the revenues of the Canal Fund will re- * \e expenses char, the revenues of t! $072,646 35 Included in these ex2enses are the $100,000 paid to the Treasurer for the use of the General Fund, and $100,000 paid on account of losses of the Funa pledged for the payment of the canal debt, and $1,031,123 16, for interest upon that debt, making together the sum of $1,281,128 16, and leavin; § 86, as the expences of the canals, include in the sums refunded on tolls, and for rents of fur. plus water from the Oswego canal, The ubove chorge for interest does not include the interest upon the balance unpaid of the old Erie and Champlain Canal debt, that being met by the inte- Test upon the funds set apart and iavested forthe payment thereof. a 4 the twelfth section of the Act of 1842, ‘*the surplus canal revenue, after paying all just canal current expenees, and the interest on the canal debt, and the payment eforesaid to the General Fund, shall, to an amount at least equal to one third of the interest of the canal debt remaining unpaid, be sacredly devoted and applied as a sink- ing fund to the redemption of the canal debt tow existing and authorized by this act, and shallnot be diverted from that object to any other purpose whatsoever.” i Sueh isthe language of this law,and such the expres pledge it contains, touching the surplus of the canal revenues of the last fiscal ye: f, the amount of the annual interest on the c: itexisted at the close of the fiscal ie 90, be the correct amount from whic! sure the extent of the pledge, aud if it be constru- ed with technical strictn extend no farther than the one-third of that interest, then the por- tion of thie surplus to pass to the Sinking Fund is $375, }, leaving a surplus for the 7 year, pn the amount pledged:to the Fund, of $197,179 39. The Canal Fund, however, as well as the Gene- ral Fund, are burdened witha heavy debt, aad it remains te be seen whether the obligations of this debt must not as effectuallycontrol the discretion of the Legislature, in the application of this sur- plus money, as any pledge which the law of 1842 eould have imposed upon it. The interest of this debt,it is true,is carefully provided tor by that law. This, without any provision for the extinction of the principal, may be satisfactory to some, but such is not my view of the rule which binds the faith and honor of the State. { know of no obliga- tion to meet the accruing interest which does not demand, with equal force, the payment oi the principal as it falls due; and so far as the means are posseseed, the failure to-apply them, in the one case, appears to me to be as much a breach of the faith pl He by the contract, as in the other. Suppose the creditor consent to the postponement of the payment of his principal money. Between individuals acting for themselves as peitiipals, such censent would authorise the diversion of the funds; but if the agent of the debtor were dealing with the creditor in person, would such consent justify the agent, without the sanction of his prin- cipal, in the diversion of the funds placed in his hands to pay the debt? And is this not our, case? Are we not the mere agents of the people in this matter? They have permitted debis to be con tracted upon their credit, and at their risk, ta con- struct the present State canals. The moneys in our hands are the proceeds of the investments thus made, and came from the very source upon which they’ relied to pay these debts, and save them from oppressive taxation. Have we the right, as faith- ful agents, without the consent of our principals, even though their creditors should consent, to di- vert their funds to other ehjects, and continue the debt upon them? I strongly incline to the opinion that we have not. By a statement of the Canal debt, furnished by the Canal Department, it appears that the whole amount unpaid on the 30th of September last was ,713,905 58 This includes the old Erie and Champlain Canal debt of $1,880,250 35, for the payment of which funds have been already set apart believed to be more than sufficient to cancel it. The portion of the funds so set apart, consider- ed Pavailable, amounts to $1,496,806 45, being 116,006 10 Beyond the principal of the debt to be paid, and prebably more than sufficient to meet the principal and interest. Iam informed by the Com- missioners of the Canal Fund, that the holder of this old stock have been personally notified that the money is ready for the redemption of the prin- pal, ond that payment will be made on the day it falls due. It is the intention of the Commissioners to place the funds in the bank, where the stock is transferable, and where the interest is paid, before the day of payment, which is the first day of July next, and the notice given to the holders informs them that interest will cease on that day. F ‘hus ie the Jast of the Canal debt, upon which constitutional pledge reste, and it may become n the course of your legislation, to con- sider whether, when these steps shall have beenta- ken, that pled cd not be considered, both in principle and in fact, fully redeemed The statement of the al debt, before referred toy, mene ve yom ghana of Canal soars redeemable in July and January next, is $3,742,- 626 Ol, This includes the eum suse 35 of the old debt, the redemption of winch is provided for in the manner above specified, leaving $2,362,- 585 66 reimbursable in January, 1846, for the pay- maa ot which the moneys are not yet fully pro- vided. The Sinking Fund provided for by the twelfth section of te lp of has received the centri- butions required to be made to it, 80 far as the Ca- nal revenues have furnished the means, although it is believed that the surplus for the years 1842 and 1848 did not equal the one-third of the accruing in- tereat upon the debt. Cartying the whole surplus of the last year to that fund, with the whole $278,197 56 paid from the Treasury as the procceds of the State tax, and the fund, including the accumulations of interest. computed at 5 per cent, amounts to $1,195,102 01, an aggregate sum more than equal to one-third of the interest on the debt for the last three years, and d to be available to meet the payment of { amount of the stocks before alluded to. Thie willleave $1,167,483 65 unprovided tor, any farther than there may bea surplus of the tunds set apart to redeem the old debt, which ean be applied to this object, and the aecruing Canal revenues of we current year may yield a surplus also thus ap- of the paying for the borrowii The third subdivision of the eleventh section of the act of 1842 provides that the contributions from the State tax to the Canal Fund sh!t cease whenever the annual revenue from “the ‘rate Ca- nals, ascertained in the manner pointed out by the act, shall exceed the expenditures upon the Canals, the interest upon the Canal debt, and the paymeut to be made to the General Fund, by more than one-third 19 amount of the annual interest upon the Canal debt. The revenues of the last fiscal rear have produced that excess, as has been be- lore seen, and have surpassed it ; and consequently the collection of the entire mill-tax, for the current ear, Must enure to the benefit of the General und, and, after the current year, the collection of that half of the tax, imposed for the use, pf the Canals, is to cease. Nothing further, therefore, is to be realized from this source, to aid in the re- demption of the Canal stocks. _ If this be a correct representation of the means and liabilities of the Canal Fund, for the current year, there would seem to be an end to discussion as to the appropriation of these means to apy other object than to the payment of the debt, unless the payment is to be postponed. I have slready ex- pressed my views in relation to such a diversie! and I am constrained to believe that, whether sidered as a question of principle, or one of econo- my, the policy would be equally unsound. ‘ Our Canal revenues are very large, and nothing but the,enormous debt charged ppon them, keeps the fund so poor as to require the aid of direct taxation to meet its liabili ‘Separate from the old debt, more than ene million annually of these revenues are consumed in the payment of interest alone — This muet be a constant drain upon the fund, and nothing but the POT tBeHt of the debt can arrest the corroding malady. Postponement can promise no relief, andfmay bring accumulated dangers. A departure from the sound rule of using our means rather than our credit, has Brug this debt upon our favorite and favored fund. The only ne- cessarily dangerous stage in our Canal policy was passed, when the Erie and Champlain Canals were completed and became productive; and asound and wise financial policy, faithtul administration, and most fortunately located Canals,carried us through that stage with safety. Up to that period, borraw- ing was necessarily the principal resource, and some of the richest revenues of the State were set apart to meet the payments of interest, while the Constitution of the State was made to pledge the investments, together with these revenues, for the return of the priocipal. And even under all these safe guards, loans were made with moderation,and the works were prosecuted in a measured pace Atter shar were completed, payment of the debt became the object of solicitude, and means were accumulated, and the stocks purchased and can- celled, in advance of their falling due, when they could be obtained on reasonable terms. dn the mean time, other canals were construct- ed, but the expenditures were kept within the lim- its of the Canal revenues, without losing sight of. ample provision for the payment of the existing debts. Asan evidence of this, before the policy was changed, the payment made and the moneys accumulated applicable to those payments, had left less than five milliops of the Canal debt unprovided for. The surplus revenues of the Canals were ac complishing much annually towards the construc- tion of new Canals, and the enlargement and im- provement of the old, and still yielding their an- nual contributions to a Sinking Fund, intended to remove the emall remaining debt, as the princi- pal should fall due. ; In this state of things a -change of policy came over us, which was based upon a new financial tule of action. The existing revenues were logk- ed upon merely as a fund to meet the agers upon further loans; it being assumed as safe to depend apon anticipated improvements of those revenues for the payment of the principal of the debts. | [n- deed, it is believed the principle was carried even farther,and that anticipated revenues were depend- ed upon, to meet accumulations of interest,beyond the power of the existing revenues, as well ap to cover the payments of principal. Tre reflection does not seem to have occurred to. the authors of this new financial policy, thatian: disappointment in their anticipations of improve revenues must give their system a eheck it could not survive, by imposing @ tux upon the people, or disappointment and loss upon the public creditors, either of which alf@rnatives could not fail to atrest the further accumulation of debt upon such a ba- sis. It would seem also, to have been overlooked, that the money-lender could draw as acourate @ distinction as themselves between their meansjand their anticipations, and that when the means should ave been exhausted, the anticipations might, not cemmand the required capital even to test their soundneeg, or their fallacy. : In any event, loans were obtained in unexam- pled amounts, until the limit of the existing. reve- nues was reached, when the public,cfedit wholly failed them. Works of internal i ment were prosecuted upon a scele so extensive as to bring the State into competition with itself, and the wa- gesot labor and the cost of subsistence epee, one contract were enhanced by the demand for labor and subsistence upon another. An arrest of the means by a failure of the credit of, the State put an end to this strife and to the new public works to- gether, and when areturn to the old andeafe policy was attempted, it was found that a large p:oportion of the moneys, which had been accumulated to meet the old canal debt, weregend: unavailable by having been loaned to banke w’ could not pay; that the accruing surplus of the Canal reve- ues, beyond the current sonal eapenses, ‘was Co- vered by claims tor interest; that eneral fund must sink under the accumulated:and accnmulat- ing demands upon it for eee ae stocks loaned to railroad compantes, w ich had failed, or were ina failing condition; that temporary loans had been made to the amount of more than a mil- lion and a half which’ were impending over the Treasury, without the means of payment, and tnat contrac.ors and laborers upon ublic worke ere without pay, or witht adarketable stocks the State in the place of the money to which their contracts entitled them. ‘The issue was therefore and unavoidable The people must be taxed, or the public creditors must suffer loss, and the pi stocks be dishonor- ed. A resort to the credit State was made unavoidable, to meetthese urgent and instant de- mends, the coqrniog inten aa the enlargeddebt, and to put the ca im repair for the approaching season of navigation. lic distrust had taken the place of public confidence, and a substitution policy was made indispensable, before @ resort to credit could com- and a response in This wes done by the act of 1842. The effect of this measure was electric, and was felt not merely throughout the State, but throughout the Union. Under its solemn assurances money was obtained upon loan to relieve the pressing ne- cessities of the public , and to preserve the public faith and honor or by a prompt payment, at the specie value, of t ments of interest upon the public securities. From this time the credit of the State rose rapidly, and soon attained the par of money ; and’ oy scrapulows adhe- rence to the Fore nd the pledges of that law, which has characterized our subsequent legisla- re it has now reached its accustomed honorable elevation. We must not blind ourselves to the fact, how- ever, that the recent d in the al of pub- i private ite, and ie ally con- nected with the credits of several States of the Union, have caused a distrust, a watchfulness, a sensitiveness, in ce to State credits, which will not permit o' nadine ments, Our practice ike been to pay t the day, both principal and interest, and such is the theory of finance upon which we have the credit of the State. If that theory shdil be abandoned in prac- tice, and the app! ate to Rey. the principal of the caivting os siey as it falls Jue, shall be diverted to other objeats of expenditure, and those payme ate be inde fiauel; aed, can we hope te’ will remain unshaken ? that the effect will ‘witnessed, when the ues anticipated revenues ition: to/epply them, to a eyed that the credit of the Have we any right to ex; be other than that so recent attempt was made to for real means and a maintain the public faith 1am well aware that great and extended public upon your attention, and wi themselves up- on the minds and feelings of whowe immedi- ate constituencies have a more direct interest in their resumption ana completion. The Erie Canal enlargement, the Genesee Canal, and the it among these Black River Canal, are promin f objects, apd deeply enlist the Teliags and interests ot large and worthy portions of out fellow citizens. Tt would certa’ be a more grateful task to re- commend a cot plane with these earnest wishes, chan to feel impelled by a sense of public duty, to point out the neceseity of their it disappoint. neat. Yet we must not forget, when acting upon hese great questions, that the ‘interests of the citi- zensol the whole State are committed to our charge, and that a measure which would be wrong cowards them, as a mass, cannot be fight, because portions of the mass would be benefitied by it. And it would certainly be wrong to erica oe a whole, sass to depress, or even to credit of the State, by a diversion tion Of the Onnal revenues required to fpay,twe. existing debt, and preserve the public faith. It would be wrong to them to disregard the letter or spirit of the pledges of the law of 1842, and thus incur the | 7°™ risk of a necessity tor increased, or longer continu- ; bts ed, taxation. i 3 Would such a.policy be wise even in regard to these improvements, and the citizens more imme- diately interested inthem? The surplus, which, as yet, can be ao diverted, without an express infrac- tion of the provisions of the law of 1842 is entirely too inconsiderable to make any useful progress with the works, and especially so, if it must be di- vided amongthem. And it is not likely that those interested in either will consent that the money shall be diverted from the debt and also from their favorite improvement. In the mean time, the ac- cumulations of interest upon the present large debt are exhausting the revenues whichshould be appli- ed to the construction ot turther improvements, and nothing but # payment of the debt can discharge them trom this profitless consumption. Will it not be more wise, to hasten the payment ot this debt, and thus discharge these revenues from their encumbrances, and place at the disposal of the Legislature some ten or twelve hundred thousand dollars per annum, without a resortto credit, with- out a loss of interest, and without the danger df in- creased taxation? The recent experiment of has- tening our public works has certainly shown us that such eflorts may be unsuccessful, even in relation to enterprizes undertaken by States as powerful as ours, ana with a credit strong and means as ample as these we possessed at the time our former pru- dent policy was abandoned. ofl | ._ Your immediate predecessors originated, accotd- ing to the forms and requirements of the Constitu- tion, various amendments to that instrument, which were duly published pr-vious to the tare election. These propositions will necessarilyicall for your further action in the constitutional form. Two of them bear particalar relation to our fiaan- cial affsirs, and are therefore appropriate subjects for ‘consideration in connection with the present discussion. The first of these amendments proposes to give a constitutional sanction to the pledges and\guaran- teesof the act of 1812 The second limits and re- strains the power ot the Legislature, by requiring that laws anthorizing loans of money upon the cre: dit of the State, except within the narrow limit of one million ot dollars in the aggregate, or for the specified objects of repelling invasion, or sup; ing insurrection, shall be submitted to the le and receive their express sanction, to give them the torce of law. Tais amendment further prove that every such law shall propose a loan for a si object, or werk only, to be distinctly specified there- in; shall impose and provide for the collection of a direct annual tax to puy the interest on the loan pro- posed agit falls due, and also to pay and discharge the principal sum borrowed, within the period of 18 years from the time the debt is contracteds shall be Frepraluble uoti!l the debt, interest, and principal, shall have been fully paid and discharged; and that the moneys loaned under it shall be apolied to the object or work uwamed in the law, and to no other arpose whatever. It further provides that when a debt shall be contracted to repel invasion, or sup- press insurrection, the moneys borrowed shall be applied to those objects, or to the payment of the debt so contracted, and to no other purpose what- ever. The recent free use of the public credit, in over- hastening loans for State works, and in lending to irresponsible conpemeaeee the embarraesed bondi- tion of our finances, and the Sri call for direct taxation to restore public confidence, have doubtless given rige'to:these proposed amendments, as they did give rise'to the law of 1842, which) the first amendanent proposes to surround by a consti- tutional sanction. MAE The manner in which that legislation was re- ceived’ by the people, although imposing a direc tax upon all their taxable property as its first provi- sion, the salutary influences it so prompily exertec upon publi¢é and Pivsie credit, and the triumphant mamner- in which its provisions und policy have been sustained by the people, whenever the wis- dom énd soundness of either have been brongh In feeue, at Pany subsequent election, presents: a m forcible argument in favor of the first ot these amendoente 4ban any it would be in my. pewer to offer. . p i he second is manifestly intended, as it appear: to me te be wisely framed, to secure the peopl: against a like hezardand loss for the future, and ‘their credit trom further over use and consequen' depression. The provision requiring each law te provide for a loan for a single object enly, is néces: sary to enable the treemen at the polls to torm distinct and satisfactory opinion upon the propriety of the contemplated expenditure, and to expreet that opinion in an intelligible and unequivocal manner. It strikes also effectually at oue of the most universal causes of complaint and dissatisfec- tion growing out of the recent appropriations for our worke of internal improvement. | refer to the charge, whether well or ill founded, that combins- tions of local interests are formed, on the part o/ the friends of different works having no natural or necessary connection with each other, and that, in this way, loans are authorized and Sipeoesa secured, which the intrinsic merits and strength of no single work inthe combination could command. This amendment cannot fail to have a strong tendency also to mitigate, or entirely remove, ano- ther practical evil too often experienced in connec- tion with this legialation. The legislature is alway: composed of members of the two great political parties which are ever striving tor the masiry — The majority in the Legislature is very le ha and to a great extent very justly, held responsible. tor the action and measures of that body. The minority will not be over solicitous to diminish this responsibility, resting, a8 it does, upon their politi- cal opponents, and may, ome times, at least as far as 2 sense of public duty will permit, be willing toincrease it. To such a minority these applications for local improvements and expenditures present a temptation which the journals of the Legislature will show are not always resisted. The interests cf asection of the State are invelved. The appli- cation is pressed with the earnestness and feeling which persenal and local interests are too Beely to impart on such occa . The majority is looked to as holding the power to make the grant desired, and the majority, prima facie at least, is responsible for the action. ft deteat be certain, the minority, by its faverable vote, may conciliate and gain the interest, without hazard or injury to the public treasury. If the majority be divided, and the mi- nority hold the power, the same opportunlty is pre- sented to gain the party advantage by the favora- ble vote, while the responsibility of the measure, when adopted, presumptively reste| upon the majo- jority, and may, at the worst, be made matter of debate between the political parties. I intend no invidious reference to individuals, to political parties, or to particular measures, by these remarks. My sole object is to point out what I be- lieve to be an evil hea Oe temptation, con- nected with legislation of this character, and tore- fer to this provision of the proposed constitutional amendmente, as eminently calculated to remove them If ithe adopted, no contest can take place offering party advantage, as to the objects of ex- penditure to be embraced in any proposed law, or as to the amount which it shall appropriate ; every attember will be required to meet and justify his own vote, before his own constituents, whether he be- longs to ‘he majority or minority of the body > be- cause those constituents will be called upon direct- ly to vote upon the same question ‘ The requirement that ataxshall be imposed by every such jaw, sufficient to meet the intereat upon the loan to be made, is but preserving the same safe precaution which marked our early legislation of this character. Then the State possessed rich re- venues which it it could spare, and they, to- ether with certain specified taxes, were pledged. low, as has been seen, all its revenues applicable to these objects, are encumbered to their fullex- tent by existing debts, and the only pledge it can make to fortify and sustain ite credit, is the one here proposed. This the citizen should under- stand at the time he votes upon such a law, and to make it certain that he will under- stand it, he should be called to vote for the tax as wellasthe loaa, It may appear to some as going too fur, to require that the tax should be sufficient to redeem the ‘principal of the debis within a specified time, as well as to pay the cur. rent interest, [f the object of expenditure be one not expected to yield revenue, then the provision 1s clearly Lo and absolutely necessary. | If it be ‘one from which a return of revenue is anticipated, ‘and that anticipation be disappointed, as has been the i with es of ae ie canale, ao me prevision is equally mght and necessary. And | the satvotpated revenue be realized, then the debt will be soouer paid, and the tax imposed be but partially required, or collected; while, in any event, wed will be protected from a load of unexpected det and unforeseen taxation. The pledge contained in the Constituti:n to secure the payment of the old canal debt, end protect th» cilize ‘and the property of the State from taxation for that pose, is to be completely fulfilled, and practically, if not technically discharged during the present year. It tha pledge was wise, it would seem to be equally as wise thw foother efficient barrier should be interposed between the tax payers of the State, and the anrostrained power of the Li ure to contract debts upon their credit and at their . That this power may be abused, we now know. it it has been al the now feel ; and it can aan bae mettre of re it shall be ound to de mand protection against futare Tam certainly es far from entertaining the disposition, es Lam from claiming the right, to pronuunce to, or tor what is public opinion upon any subject ; but so far ition means of information enable we to ., these proposed amendments have been very broad ly and fully discussed before the people, during the late canvass, have taken deep hold of the public mind, and have been received with strong favor. It is not given to you to incorporate the prev. s in, and make thema part of, our Constitution. This is wisely left for the peo- plethemselves. Your action if favorable, can only pre- pare the amendments for their final action ; and the re- flection that, without your favorable co-operation, the people cannot, in the manner pointed out by the Consti tution, express their will and choice upon these, to them, nt propositions, will not fail to incline to fe ence the minds of all, whose judgments do not decidedly reject the proposed amendment. Our present Constitution has remeined the fundamen- tal law for nearly a quarter of acentury, several amend- ments having been, in that tive, adopted, im contormit: with the provision ot that instrument for its owa ameu ment. Hitherto that provision has salisficd tue public mind, and led to the amendments demanded by the popu- lar feeling and judgaent, | consider it extremely desira. ble that this should continue te be found practically true, and that sus degree ot harmony shall, at all times, pre vail between the popular will and the legislative action, in reference to further propoted amendments, as shall su persede demands for constitutional change in any other form. [tis a matter of pubiic notoriety, that a portion of our citizens , for some time, thought, and still think, that a call for a convention to revise our Constitution,has already become expedunt. | have been induced to be lieve that tne desire for amendments upon the very points embraced in those now u:der discussion, and perhaps upon one or two others, in reference to which, Bropast tions are also now before you has excited this feeling, and given it its present strength. J kmow that a further limitation of the power of theExecutive over appointments to office, is also a subject upon which many desire an amendment of the Constitution Speaking personally, I hope I may be believed when I say that any curtailment in that branch of the executive powers and duties. while lamto be honored with the exercise of these high functions, would be most grateful to me; and lam prepared further to say, that I believe many of the officers now appointed 1) por. the nomination of the Gover- nor, and the consent of the Seuate, might be directly elec- ted by the people, or otherwise appointed, with equal safety to the public, and more in accordance with the popularfeeling. Ifthe time shall come, however, when the requisite assent of the legislature shail failto be ob- tained, to authorize a cubmissiunto the people of such Propositions for dments, clear majority of the freemen of the State shall der and believe to be ne- cessary for the protection of 1 rights, discontents will be experienced, and other forms of amendment will be proposed and perhaps successfully urged. Under this conviction, I feel it to be an imperative duty, respectfully but earnestly to request cir to give tu these, and all other ‘amendments which may come before you, such calm, unprejudiced and thorough consideration, as shall be calculated to satisfy our common constituents with the conclusions to which you shall come. The instalments of the State debt, falling due after the present year, have not been brought into notice in the preceding exposition of the condition of ‘the public tunds. fhe last annual report of the Comptrolier exhibits the times of paymentolthe whole debt, and will show that the amouats which become payable in 1846, and 1847, are comp: ratively small. This may enable the revenues of those years to meet those redemptions, and the unpaid ba- lance of the present year, but the sums falling due in the following yearsare very large, exceeding five millions, and will require more than any surplus the present reve- nue can furnish, to preservethe public faith, by making these payments when due. A deferred stock has been sng gested asa papicebie mode of meeting these debts. To the extent that the current revenues, husbanded with he utmost economy, can furnish the means of payment; this course appearsto me equally objectionable, in prin ciple and expediency. A deferred stock, to liberate re venues properly ap; licable to an existing debt, that they may be applied to other objects of expenditure, is the first and fatal step towards making debt perpetual. In any view I am able to take of thia portion of our fin- ial wftairs, I am constrained to believe that the appli- ‘ation of the existing revenues to the existing debts, so ar as the current expenses of the public service will per- mit, has become an imperious duty to the whole people, that the burden of the present State tax may be removed at the earliest practicable day, and that the danger of its recurrence may be obviated by a payment of the debts which have rendered it necessary. I also believe tlat ‘rte friendship for our system of internal improvements, and its safe ard certain extension, equally require, and will demand the most speedy payment of the canal debt, ind the liberation et the present canal revenues from the wasting demands of interest now resting uponthem. 1 recommend, therefore, that course of financial legislation, which shall make these the prominent objects of ita po icy. - Our financial condition is by no means ee The capid accumulation of debt was arrest: d, betore it had so far surpassed the power of our revenues, og to render a retuin within the limits of @ sound condition hopeless The able expositions of 1842, and the sound legislatian of that yeer, satisfied the people of this fect,.and the taxation necessary to render this return safe and sure was cheer tully submitted to. The improvement of the revenues of the canals bas. already Jaid the foundation of a sinking und, renderir g the speedy reduction of thet debt certain, it aided by the whole power of those revenues. Re- renchment of expenditures, it is hoped, may do some- thing towards bringing the payments from the General fund witbin its revenues, and the whole state1sx. for the present year, will at least relieve it from the scoumulation of further debt, and afford time for so strengthening its resources, or diminishing its expen- seg, as to give it power to commence the reduction ot i's heavy debt. The question submitted to us, therefore, is not that submi ted to the le; ture of 1842, whether we will uttempt to bring te or and soundness deranged finances, and restore a fallen credit; but whether, «ng our financial condition substantially sound, and our credit high, we will maintain both in that desirab!econ- dition, and as soon as it can be done consistently with these objects, relieve our whole ple from the tax which the restoration of 1842 imposed upon them. It is pleasant to turn from funds thus loaded with debt, to the consideration of others annually dispensing their benefits, without any such incumbrances, to objects the most vital to republican institutions. The productive capital ot the Common School Fund was on 30th day Sept. last, $1,992 916 85, and the revenues of the fund, received into the Treusury during the lest fisca: year, amounted to $'33 826 $1. Thisrevenue is, by the terms of the Constitution, t> be inviolably eppropriated and applicd to the coer of common schools, tnroughout the State.” The School Fund was instituted by law in 1905, and the constitutional protection of the fund toek «fact on the firrt day of Januery, 1828. Itis worthy of remork that the revenues of this fund haveat no time been anticipated, se as to chargea debt upon them, or upon its capital If distributions to the common schools have een directed beyc_id the power of the revenues of the fund, as they sometimes have, the same law has always provided the means from which the excess was to be paid, so as to fix no debt upon the fund, orits revenues The proceeds of the sales of five hundred thousand acres of the public domain of the State, were the first appropriation io this fund, and constituted its foundation. The immense superstructure which has been reared upon such a basis, and under such management, in a period of forty years, is shown by the following satistics, turnished by the Superintendent of Common Schools. The number of school districts inthe State, organized according to the school law, is 10,990, from 10,887 of which regular reports were ved during the last year, show- ing that the average time, during which is were kept open in these districts was eight months. The whole number of children between the eges of five and sixteen resiJing inthe State, estimating those residing in the city of New York at 80,000, was 696 545; and the whole number of children actual taught in the district schools of the State wes 709 186, being more than 60,000 beyond the number taught during the preceding year. je whole amount oi mney distributed m the ‘reasury of the for the use of the common schools for that year, was $276, d the amount actually paid during the year, fer the wages of common school teach: ra, Was $992,232 08. The number of volumes reported as being in the school district libraries, was 1 036 396. These returna also show, that 7,531 scholars had been, during some portion of the year, in attendance upon pri- vate and select schools, out of the city uf New York, and it is estimated that at least an ¢qual number were in attendance upon like schoels in that so making mre than 65000 children thus taught, not including those taught in the academies and other incorporated literary institutions. Ido not think it expedient to go more at large into the statistics of our common schools, in this communication, ag they will be fully laid before you in the annual report otthe Superintendent, and will be found to possess an intrinsic interest certain to command your most anxious attention. Thrae facts, however,present evidence!both striking and satisfactory of the immense extent of public benefit, which revenues, moderate in amount, but unincumbered by debt and interest, may work out in eo limited a term of years It ia true the School Fund has, from time to time, been moderately aided in its annual distributions, from the treasury, and that now, and for several years past, it has received, and is now receiving, one hundred and sixty- five thousand dollars per annum from the interest of the United States deposite fund, a sum greater than its whole annual revenue This authorizes the enlarged distribu. tion directed by law to be now annually made for the be nefit of the common schools. No pubiic tund of the State is so, hopeeentiog, ‘et 80 all pervading; #0 little seen, yet so universally felt; s0 mild in its exactions, yet so bountiful in its fi 8: #0 little fared or courted, ond yet so powerful, as fund for the support of common schools. The other funds ect cy the secular interests of society, its business, its pleasures, i's pride, its passions, its vices, ite misfortunes This acts upon ite mind and its morals. Education is to free institutions, what bread ia to human life, the staff of theirexistence. The office of this fund is to open and warm the soil, and sow the seed, from which this element of freedom must grow and ripen inte maturity, and the health or sickliness of the growth wili measure the ex. and secarity a: our liberties. Thethankfalness we those who have gone before us, for the institution wstitutional protection, and for its an istration hitherto, we can re y by imitating their example, and improving upon heir work ax the increased means placed in our hands shall give us the ability Few, any instances are upon record, in which 1 funt of this dercription has been administered, ind its bounties digpensed, through a period of forty years, with so few suspicions, accusations or com- plaints of the int e of either political or religi us biases to disturb theequal balance by which its benefits should be extended to eee perce ‘This should continue es ithas been. Our to our end youth either partizans in poll- fund ie not institute! | cs, or sectarians in religion; but to give them education, intelligence, sound principles, good morel ebits, and a free and independent spirit; in short, to make them Amer, ican freemen and American citizens, end to qualify them to judge and chouse for themselves in matters of politics, religion and government. Such an administration of the fund as shall be calculated tu render this qualification the mos: perfect for the mature mind, with the fewest influ ences tending to bias the judgment, or incline the choice, will be the most consonant with our duties, and with the best interests of eur constituents. Under such an sd- minis‘ration, education will flourish most, and the peace and harmony of society be best preserved. Our Common Schoo. stem hus been so long a promi- nent subject of legislation, to have become matured und perfected in many of most importent features — With it, our whole community are familiarly acquainted, and itis qnite unnecessary for me to detain you by re- marking upon it. Tue subject of the proper education end qualificetions of the teachers of common schools, is one of primary in- terest, as it has been found to be of prominent difficulty, in the execution of our school laws. It has so frequently pecupied the able pens of my predecessors upon occasions like this, and of our distinguished acho! ind stateamen, interested themselves in the prosperity of our common schools, aud the cause of educat generally, as to leave for me little more than to invite your anxious attention to this part of the system, and to the existing provisions of our laws relating to it. Some recent Je- gislation, affecting the management and inspection of schools, licensiug of teachers, and their‘iuture edu- cation, racting considerable attention, and exciting some interest im portionsof the State. The substitution of acounty superintendant of schools, in the place of the former town commissioners, has given rise to discontents in some of the counties, and the proposition to establish a school at the seat of government for the education of teachers, appears to be creating serious apprehensions in the minds of portions of our citizens. It is feared that an institution for the education of teach- ers for our common schools, under the superintendar ce of officers of the State government, and dependant upon the public patronage and bounty, will lead to influences of a dangerous character ; that teachers so sent out, if the law shall not make them so, may tee] themselves to be @ pre- ferred and privileged class, and that the tendencies be to incline them to use efforts to impress their pu; favorably towards the government to which they feel in- debted, and the system which has given them preferment; that a uniform religious and sectariag, as wel) as potitical feeling may come to pervade such an institution, and through the teachers there educated, be disseminated in thecommon schools, and that, ii of government establ.shment mey giow up, giving a cast to the education, and political and religious opinions of our youth, dangerous in ite influences and results. Appre- hensions of this character been pressed upon me, with evidences of popular feeling upon these subjects en- titled to respect, and I feel bound, therefore, to lay them before you. In the same connection, it is my duty to say thet com- munications from other sourees, equally intelligent and respectable, have been received, appreciating most highly these provisions of the existing laws, as at improve- ments in our common school vystem, a8 promising the most auepicious results, witbout for any just ground for the spprehension to which I have alluded. My Ls si Neri for personal observation have not been sufficient to enable me to form an opinien as to the practical workings of the change from the town cammis- sioners to the county superintendunts, and J do not feel quelified to make any suggestion or recommendation in regardtoit. If there be abuses of aserions characters they will doubtless be laid before you, with videncee of their existence, and you will then be able to determin, whether the defect be in the law, or in its administration, and to apply the remedy which the evil shown shall re- quire. The school for the education of teachers cannot yet have afforded any evidence of the groundlessness or jus- tice of the apprehensions to which I have referred, and I have not myself studied the subject so as to outhorise me to pronounce an opinion, or to interpose any recommen- dations respecting it. Ishall have discharged my duty, therefore, in presenting the point to you, with the su; gestions upon both sides, and the expression of m: viction that those who either are governed By the purest wishes forthe steady and secureadvancement of our system of education. ‘The school in question is located at the capital, and is therefore, #: all times, within the reuch of your personal inspection. It would scarcely be deemed reasonable, after its institution at the public expense, to condemn it in advance, and without a trial, but shoud you become satisfied, from intimate inepection, or other reasonable proofs, that it produces.or is likely te produce,the mali ‘wfluences which have been anticipated, it will then your duty to abolish it. And if, on the other hand, this system shall be found to realize the anticipations of its irieads, without bringing with it avy of the dangera or abuses apprekended by others, it may be confidently ex- pected that the objections alluded to will be abandoned, as unsupported by ex ce. The Literature Fund is also devoted to the purposes of education. Its capital, at the close of the last fiscel year, smounted to $268 990 57, and the revenues received into ‘he treasury during that year, were $18,490 34 This fand receives $28.000 annually from the interest of the Un.ted States deposite fund, and its revenues are distribu- ted to the incoiperated Academies of the State, under he direction ot the Regents of the University. As the conditions upon which Academies are permitied by the Regents to participate in the dividends from this tund, the incorporation must own real estate and buildings of the value of $2 509 over and above uny incumbrances there- on, end must havea fund invested and yielding ennual in- terest for the term of 20 years, equal to at least $2000. T! merease of the number of academies participating annu- ally im the distribution from this fund, by bringi: g them- selves within these conditions, furnishes one strong ¢vi- dence of the rapid advancement of education in che State, ind of the very general diffusion of a grade of education heyond that ordinarily acquired in the common echools. The mesns tren to purchase the lots, erect the i ind establish the funds for these numerous ire mostly if not entirely drawn from the volun- ‘ory contributions of pri’ citizens, avd of our inco! porated villages and tow: and their collection an plication evince, ina gratifying manner, the lively in- erest taken by our ple in the great cause of education. The annual report of the Regents of the University will place before yuu ,the condition of these institutions for the past year. ‘The cupital of the United States deposite fund is $i.014- 20 71, the proportion received by this Strte of the sur- plus monies in the treasury of the United States, deposi- ted with the States for safe keeping by the act of Congress 686 money was loaned by the State to the seve- the safest mode of investment, the faith of e ig pledged for the return of the principal, without interest, whenever the United States shall de- mand the repayment of the same. The interest has been appropristed slmost exclusively to the purposes of edu- cation, & single thousand dollars per annum to the New York Eye Infirmary being, as believe, the only excep- tion. R The opinion is entertained in some quarters, that too large a proportion of this fund has been appropriated to the use of the colleges and academies ef the State, and that an invidious cistinction is made in their favor as compared with the spproprition to ‘he common schools. This conclusion appears to rest upow the fact, said to be wscertained, that the dividend per scholar, from the public tunds, is greater.{to these institutions than to the ommon schools. I have not ascertained how this fact aay be, nor docs it strike me as a very satisfactory foun- tation for the conclusion if it be as stated. These institutions are entitled to the public patronege and bounty so far, and only so far, as they are valuable and Useful sicitee ia the rest Cog of educa- tion generally, and es: 'y in y’ common those with competent and q olifed teachers, and -im- proved modes of instruction, and in otherwise sustain- ing and elevating the standard of ins.ruction in those schools, These, asit sppears tome should be the great objects of legislative grants tothem, and the measure of such grants. The institutions must be sustained in a healibfal and flourishing condition, or the accomplish- ment of there objects cannot be expected from them.— They must be supplied with competent teachers, or they cannot send forth those competent toteach. The value { useful ond proper class books must be known and ap- >reciated in them, or they cannot commend such books fo1 iher schools. The standard ef education inthem must be sound and elevated, or they will not contribute to maintain uch a stendard inthe common schools. Their bealthful- ness, therefore, or theirneed, in a pecuniary sense, would reem to me to be amore safe and more just guide to the jegislatarethan any rule of distribution per scholar. The common schoola should never be suffer. ed tv languish for the wantof the meansgranted to these institutions; nor should the colleges and academies be permitted to decline aod suffer, that the means which would sustain them may be granted to wel d and healthfal common schools. Either extreme would be equally unwise, impolitic and hurtful. All are parts, and csvenial parts, of one and veluable essential plan of education, sickliness in any brench must soon be felt throughout the whole system. The common echools are the principel and these institutions are the auxiliaries, essential auxiliaries, and that legislation which shall preserve the most ¢qual and uniform sound. ness end activity and vigor, throughout the whole, will ve the most politic, most wise, and the most just Having no intormation in regard tothe condition and wants of these verious institaticns, I am unable to pronounce an opinion upon the propriety of the present appropriations from the revenues of thie fuod I can only, therefore, recommend the rule I have laid upon this subject for your consideration, well convinced that, your exsmivetions satisfy you thet these eyetepsiation: tare in confor- mity with it, you will find no cause te change them; while, tt you shall find eny essential deperiure from it, that you will make the changes which the healthful ac.- tion of our whole system of edacation shell seem to re qui . ire By 4 law passed onthe 10th of April, 1 Pp it mone ysofths United States ey ite Fund peli wvecetan rected to be trensmitted to the State Treasury and not re- Joaned, that they night beapplied in extinguishment of the debt standing eguinst that fund, due to the cenal fund. Payments of principal money have been meade to an amount snfficient to extinguish that debt, and it is submit- od for yout cona.deration whether (his law ought not to be epealed, and t! thority of the commisstonere of loans ore lown the «principal moneys of the fund, confered by the 28th section of the act ef the 4th 1937, be thus restored. It Ll ges thet these 4 p«l moneys be made constantly productive, orepriations ofthe revenue from them to the ‘ore nomed may be regulerly met, and no pears to me to offer the some whh interest. As a mere financisl 4 rate from the consideretion of secummode- jants of the respective counties, it St fi ion to the i pears to me the authority to reloan these moneys be restored. Our pen ‘entiary system has been @ subject of primary rr pe hs solicitude and a care, for a long series of