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In January, 1833, the debt created for the construction of the Erie and Champlain canals, was a little more than seven millions, a part of which was reimbursable at the pleasure of the Government after July, 1837, and the residue after July, 1845. At that time the Commissioners of the Canal Fund began to purchase and cancel the stock of this debt. On the 30th of September last they had paid out for this purpose, nearly three millions of dollars, and yet had a surplus of the fund on hand amounting to three millions four hundred and six thousand eight hundred and nine dollars and seventy-two cents. By the first day of July next, the surplus will be quite sufficient to extinguish that debt, which is now four millions three hundred and forty-nine thousand six hundred and thirtyfour dollars and eighty-five cents. If such should be the case, the income derived from auction and salt duties, will then be transferred by the recent amendment of the Constitution, from the Canal fund to the treasury for general purposes.
Pursuant to the directions of the law passed at the last session of the Legislature, the Canal Board has settled the plan for enlarging the Erie canal. According to this plan, the canal is to be made seven feet deep and seventy feet wide on the surface of the water. All improvements now required on the line of this canal, will be made with reference to its cnlargement. Measures have already been taken to change the location of the aqueduct across the Genesee river at Rochester, and to construct the new one on this principle. When this canal is enlarged according to the proposed plan, it is presumed that boats carrying one hundred tons of freight will pass on it with facility. No very accurato estimate has yet been made of the expense of this work; but it will probably exceed twelve millions of dollars, including damages for individual property which must be taken for that purpose.
The amount of the appropriation for this work will not probably much exceed one million dollars annually; it will not therefore be completed in less than twelve years.
Notwithstanding the business has increased on the Oswego, Cayuga and Seneca, Crooked Lake and Chemung canals, the tolls have not been sufficient to defray the expenses of collection and repairs, and pay the interest on the debts contracted for their construction. For the year ending on the 30th September, the deficiency in the revenue to meet thesc expenses, was forty-four thou
sand four hundred and sixty-four dollars and thirty-nine cents, which has been paid out of the treasury.
Unforeseen difficulties have retarded the work on the line of the Chenango canal, and apprehensions are entertained that it will not be entirely completed during the next season. Great care has been laken to construct this work so as to give it permanence, and the cxpense of it will probably exceed the present appropriations which amount to one million eight hundred and sixty thousand dollars. No fund whatever, except the premium on the loans, has been provided for the payment of interest on this debt, that can be available till after July, 1845. The premium on the first loan of one million dollars has been already exhausted, and that which may be received on the loan of eight hundred and sixty thousand dollars, will not probably be sufficient to pay the interest on that portion of the debt for more than two years. You ought, therefore, to make provision for paying the interest on the million loan, and eventually on that of eight hundred and sixty thousand dollars. It is not now anticipated that after the canal is completed and in full operation, the necessity of such a provision will be superseded.
Goods usually arrive through the Erie canal at Buffalo in the spring, destined for the country farther west, several days before the lower part of Lake Erie is clear of ice. This occasions delay in forwarding them on, and has a tendency to divert the trade to the west from our channels of communication. It is worthy of your consideration, whether the inconvenience and injury arising from this cause is not of sufficient magnitude to make it a measure of good policy to extend our present line of internal communication from Buffalo to some point on the shore of Lake Erie, where the lake would be likely to be free from ice as early in the spring as the navigation of the canal may be opened.
I have heretofore expressed my decided opinion against the po-. licy of legislating on subjects that needlessly interfere with the ordinary pursuits of our fellow-citizens. These pursuits should be left wholly unembarrassed by any regulations whatsoever, except such as are obviously required to prevent abuses and promote some manisest public good. I recommend that you should entirely abstain from granting charter privileges, to be used in transacting such kinds of business as are prosecuted by individuals, and which can be conducted as well by them as by incorporated companies.
The association of capital for such objects with corporate privileges, subjects individuals engaged in the same or similar pursuits, to an unfair and injurious competition.
In regard to incorporations of a more general character, the public necessities and the public interest will indicate your duties, and beyond what these considerations demand, you will not, I presume, feel any inclination to multiply them.
In my last annual message, I communicated my views in relation to corporations which have a connection with, and an influence on, our currency, and so far as those views apply to the present condition of the State, I wish to be considered as presenting them again to the Legislature. You will be solicited to add an immense amount to the banking capital of the State, at the present session. Notices have been already published of intended applications for ninety-three new banks, with capitals, including the increase to those of the existing banks, to the amount of more than fitty-seven millions of dollars. It is said, and, I doubt not, generally believed, that the present banks are unable to afford the necessary accommodations which the increased and rapidly increasing commerce and business of the country demand. Before you undertake to supply this want of capital by legislation, you will doubtless satisfy yourselves of its actual extent, and investigate its real causes. If it shall be found, as I think it will, to arise, in a great measure, from a state of things that cannot probably long endure, and ought not to be upheld by you, so far, at least, you will be bound to withhold the proposed aid. There can be no mistake as to the fact, and it should not pass unnoticed, that an unregulated spirit of speculation has within the last year prevailed to an unprecedented extent. Our citizens, who have been influenced by this spirit, have not confined their operations to objects within our own State. They have made large investments in other sections of thc Union. These operations have required something more than the use of our circulating credits. The amount of capital that has been thus transferred from this State to others, cannot be ascertained with any degree of accuracy, but it must be very great. These transactions, large as they have been, bear no comparison to the enormous speculations in stocks, and in real property within our own
The vacant lands in and about several of our cities and villa(Assem. No. 2.)
ges, have risen, in many instances, several hundred per cent, and large quantities of them have been sold at prices which seem to me to have been produced more by the competition of speculation, than any real demand resulting from the increase of our population and actual prosperity. That the sudden rise in the price of these lands, is ascribed to the true cause, is evident from the conceded fact, that most of them have been purchased, not for the purpose of being occupied by the buyers, but to be again put in market, and sold at still higher prices. No estimate can be made of the amount of these transactions; but a conjecture may be formed as to the extent of the sales, from the fact that a single auctioneer in the city of New-York sold real estate during the year ending on the 30th September last, to the amount of more than twenty millions of dollars; and the character of these sales is indicated by the further fact that about eleven millions of this property was sold on the bid made by or for the owners. It is proper that I should remark, that the speculations in real property in this State, have not been confined to city and village lots, but have extended to farms and wild lands.
I presume it will not be denied that a very considerable portion of capital has been devoted to these speculations in land and stocks. I have deemed it necessary to allude to these transactions with a view to lay open the true causes of the alleged deficiency of capital to subserve the purposes of commerce, manufactures, and the other pursuits of the productive classes of our fellowcitizens, deeming it very important that these causes should be well considered before you attempt to apply a remedy-particularly such a remedy as is asked for-an unexampled extension of our credit system.
It cannot, I think, be denied that a large amount of capital has been sent out of the state to subserve the purposes of foreign speculations. This is undoubtedly one cause of the want of sufficient capital to transact our ordinary business. It is not less true, I apapprehend, that the existing banks have, to some extent at least, lessened their ability to accommodate persons employed in regular business pursuits, by affording assistance to those who are embarked in these speculations. This is another cause of the present want of banking facilities. But the main cause of this want, which now presses so severely on our fellow-citizens, is less obvious, but not the less entitled to your consideration. The passion for specu
lation prevails to an extent heretofore unknown, not only among capitalists, but among merchants and traders. The funds of these capitalists have been withdrawn to some extent from situations in which they afforded accommodations to business men, and they have consequently been obliged to press upon the banks to supply this deficiency in their means. Merchants and others, have abstracted from their business a portion of their capital, and devoted it to speculations in stocks and lands, and have then resorted to the banks for increased accommodations. To these causes I as. cribe most of the embarrassment now felt for the want of sufficient bank facilities to conduct successfully our ordinary business concerns. The proposed remedy, judging from the applications, is to double the present number of banks, and nearly to treble the amount of banking capital. Before you apply this remedy, in whole or in part, you ought to be well satisfied that it will remove the difficulty, and that the use of it will not leave us in a worse condition than we are at present. If the passion for speculation has engrossed the pecuniary resources of the State to such an exten: as to interfere with the strong claims that commerce and trade have upon them, is it not to be apprehended that it will appropriate to itself a large portion of any additional accommodations you may provide for these and other branches of business? If I rightly apprehend its character, it will not be likely to abate while it can find means for its gratification. I am well aware that this spirit of speculation cannot be restrained by direct legislation; but you should be careful to avoid encouraging or sustaining it even incidentally by any measures you may deem it expedient to adopt for the purpose of repairing the injuries it has done to the business concerns of the State.
I do not doubt that the increase of commerce and manufactures among us has rendered more bank accommodations desirable, and that this cause has had very considerable influence in producing the numerous applications about to be presented to you; but I cannot give my assent to the proposition which the advocates for Banks will urge as the rule for your action on this subject, that the increase of Banks should be in proportion to the increase of business. This proposition assumes that whatever be the situation of the country as to the quantity of actual capital, the agency of Banks is equally necessary, and the amount of accommodations required from them must be in proportion to its business transactions. It certainly cannot be true that a merchant or a manufacturer with