that internal improvements cannot be long prosecuted on an extensive scale unless sustained by a wise system of finance. No new work can be executed without using the public credit, and however high that credit is at this time, it cannot be liberally used and long upheld without some financial arrangement that will inspire confidence at home and abroad. If we look at the works undertaken in this State since the commencement of the Eric and Champlain canals, or at those in other States, as furnishing the means of an enlightened judgment, we ought not to conclude that any great enterprise of this kind now in contemplation will, at its completion, or within any short period thereafter, yield a sufficient revenue to defray the expenses of its maintenance, and pay the interest on the debt contracted on its account; nor is it necessary, according to the views I have heretofore presented on this subject, that such a result should be anticipated from any proposed public work to warrant your favorable action upon it. But a work that does not produce such a result will impose a burden. which must be sooner or later discharged. To suppose that your constituents require you to engage in the construction of any public work, and at the same time decline to bear that portion of the burden of it which fairly belongs to them, is not doing justice to their good sense and intelligence.

I have heretofore expressed, and I deem it appropriate now to repeat, my regret that we have departed from the wise system in relation to finance under which our first public works were commenced, to the evident detriment of the general cause of internal improvements. The improvident practice of borrowing money without providing available funds for paying the interest, has already been carried to a point beyond which it cannot be pushed without producing serious mischief. That this practice has not yet impaired our public credit, is to be ascribed to the fact that heretofore the treasury has been in a situation to meet the demand for the interest without relying, to any considerable extent, on loans for that purpose: But that can be done no longer. On a part of the debt already contracted for internal improvements, the interest can only be paid by new loans, unless you resort to taxes of some kind; and such will most certainly be the case in relation to any additional debt you may create. The surplus revenues of the Erie and Champlain canals cannot be applied to this object within nine years, and after the expiration of that period only to a limited amount, if at all, for several years thereafter.

These revenues are by the constitutional pledge, placed wholly beyond your reach until the year 1845, and all but the annual sum of three hundred thousand dollars is already appropriated during twelve years at least, for the enlargement of the Erie and Champlain canals,

This condition of things is not presented for the purpose of discouraging your efforts in the cause of internal improvement, but because it is a difficulty that inseparably belongs to the subject, and if not removed, will greatly impede our onward course.

The suggestion, that we are to discontinue this system, will not I confidently trust, be heard from any quarter. Yet very few, I should hope, would advocate the reckless policy of contracting a debt, even for such an object, and constantly and rapidly accumulating it by loans to pay the interest. I am sure our credit would ere long sink under such a policy. If at a period of unu sual prosperity, with resources most abundant and unincumbered, with no demand for extraordinary expenditures on objects which can never be productive, the people are unwilling to submit to any burden whatever for the purpose of providing even for the intes rest on the debt they are creating for substantial and enduring im provements, conferring on themselves direct and incidental advantages, what good reason can be given to those who have capital to loan, to induce them to believe, that our successors will promptly pay not only what is properly left for them to pay, but also that which in justice and good faith should have been paid by us? Can we with propriety ask capitalists to put faith in our contracts on the ground that the people in some future age will do what we decline to do, burden their resources to pay the interest which in our time we suffered to accumulate on the debts we had contracted? Can we claim the continuance of public confidence on the assumption that a future generation will take better care of public credit than we are willing to do?

There is another point of view in which this policy appears to me to be extremely objectionable. It violates the great principle of justice in regard to future generations. I must not be understood to maintain the position that the people of the present day should furnish the means of reimbursing the loans that they may make for the purpose of internal improvements. These improvements will be left for the benefit of future ages, and I see no in

justice in transmitting to them the obligation to contribute a fair proportion towards the expenses. But we also derive great and immediate benefits from such works; and a portion of these expenses should, therefore, be paid by us. If we borrow the money to defray them, and also borrow to pay the interest on the debt, we take the benefits without the burden. On the supposition that a public work does not for fifteen years produce an income more than sufficient to keep it in repair, the debt contracted for its construction will at the end of that period be doubled, if it be increased by loans to pay the interest. Those who at that time have the benefit of such an improvement, will take it encumbered with a debt amounting to twice the sum that it would cost them to make it for themselves. We should reflect, that if we prosecute public works with vigor, we shall not accomplish all that it is to be done. Each successive age will doubtless be an age of improvement in this respect, and the people of each will be required to contribute from their means to such objects. I fear we are not sufficiently conscious of the peculiar felicity of our own times, if we indulge in anticipations that those which are to succeed will, like the present, be wholly exempted from the foreign wars and domestic troubles which wither the energies and impair the resources of nations; that Providence will be as liberal in its bounties to our successors as it has been to us; and that our civil and political institutions will, at all times hereafter, exert the same benign influence as they do now upon the public welfare. We cannot rcasonably expect that any future generation will be more willing or more able than we are to bear public burdens, and I can conceive of no reasons that can justify us in transferring to them any part of the share of such burdens that should be borne by us.

If you concur in these views, you will regard it as your duty to provide a certain revenue that will at least be sufficient to pay the interest on the public debt already created, for which no provision is now made, and also on any additional debt you may authorize to be contracted. This can be done by augmenting the receipts into the treasury, so as to leave a surplus, after paying the ordinary expenses of the government and other appropriations, fully equal to the amount that may be required to pay the deficit of interest on the public debt; or by an explicit and effective appropriation of the future surplus revenues of the Eric and Champlain canals. The occasion seems now to require you to determine the grave

question, whether the surplus revenues of these canals shall or shall not be appropriated to the support of other works of internal improvement. The Oswego, Cayuga and Seneca, the Crooked lake and Chemung canals are all in full operation; and we have already drawn from the public treasury for their support, two hundred and ninety-four thousand one hundred and eleven dollars and sixtynine cents beyond the income received from them. The Chenango canal will much increase the amount required from the treasury for the support of the lateral.canals. The treasury is entirely exhausted, and you are therefore required to provide for the support of these canals, and to pay the interest on the debt contracted on their account for the present year, more than one hundred thousand dollars. If you do not, and I trust that you will not, provide for the payment of this sum by a further loan, and thereby increase the existing debt without pledging a revenue sufficient to pay it, you will then have only the alternative of levying a tax of some description to raise a sufficient revenue for this purpose, or of borrowing on the specific pledge of the surplus revenue from the Erie and Champlain canals. If the sum of three hundred thousand doilars of the surplus revenues from these canals, reserved by the law providing for the enlargement of the Erie canal, is left without such a pledge, there will be no certainty that it will be applied to pay the debt, which must, without taxation, be accumulated to support the other canals. It therefore seems to be necessary that you should determine, at this present session, the question of appropriating the surplus revenues of the Erie and Champlain canals to sustain and carry forward other works of internal improvement.

It is estimated by the Commissioners of the Canal Fund, that the deficit in the revenues of the lateral canals will be one hundred and twelve thousand three hundred and twenty-eight dollars and thirty-seven cents for the present year. The same state of things will exist in subsequent years, and the amount of the deficit will be increased with the increase of debt for new works. I am persuaded that the dictates of an enlightened policy will urge the establishment of a distinct system of finance applicable to this subject, whereby a fund will be provided adequate in amount at least to satisfy the demands for interest on the debts that are and may be created, and all other expenses, except the reimbursement of the principal borrowed for the construction of public works. I particularly recommend the adoption of such a system, because I

am convinced it will have a salutary influence on the general cause of internal improvement.

I have received a communication from the president of the board of directors of the New-York and Erie Rail-Road Company, together with other documents relative to the extensive and useful enterprise they have undertaken. As the principal documents have been heretofore printed, I presume they are in the possession of the members of the Legislature; and I have not therefore transmitted them with the accompanying letter of the president to which I refer you for information respecting the proceedings and views of this company. It appears by the communications I have received, that the subscriptions to the stock already obtained amount to two millions three hundred and eighty-two thousand one hundred dollars; and that more than twenty-seven thousand dollars had been expended, principally for surveys, previous to the first of October last. Since that time, forty and a half miles have been put under contracts about fourteen per cent below the estimated expense, and the company entertain a confident opinion that the whole work will be executed and put in operation for six millions of dollars. The magnitude of the undertaking, the public benefits it will confer, and the deep interest felt by the inhabitants of the section of the State through which this extensive line of communication is to, pass, will induce the company again to ask the aid of the Legisla ture. The mode and amount of the assistance which the State ought to contribute towards the accomplishment of this work, will deserve your mature consideration, uninfluenced by any other views than such as are inspired by a comprehensive regard for the public good.

The canals continue to increase in productiveness. The total amount of tolls collected on them during the year ending the thirtieth September, was one million four hundred eighty-five thousand seven hundred and seventy-five dollars and nine cents. The income from the tolls and all other sources of revenue during that year, was one million nine hundred and sixty-two thousand five hundred and twenty-three dollars and twelve cents. The disbursements for repairs and collection of tolls for the same time, were five hundred and five thousand seven hundred and eighty-eight dollars and seventy-eight cents, and the entire expenses on all accounts, including the interest of the canal debts, amounted to eight hundred and thirty thousand three hundred and fifty-three dollars and sixteen cents.