all demands. The failure of that sum to complete the improvements, led to the appointment of a commission by my predecessor, which commission submitted a plan for the thousand ton barge canal, and to that project the commercial bodies of New York and Buffalo stand committed in the belief that no other remedy will produce the desired results, while the interior cities and others who are affected are as earnest in their opposition of the larger plan, and are as firmly convinced that a canal completed along the plan of the nine-foot level will be sufficient for all requirements. Therefore the friends of the canal, while united in the greater cities, are at odds in other sections of the State over the amount of expenditure which the Commonwealth should authorize for the completion of this important work. So far as the thousand-ton barge canal is concerned, I had thought that the route known as the Oswego, Ontario and Olcott at a much less cost would be sufficient for all purposes and would secure the result desired much more speedily than the so-called interior route. Those who have given the Lake Ontario, Oswego and Olcott plan study, are firmly convinced, however, that it is impracticable, and that at the time when the canal traffic would be at its heaviest, it would be impossible because of adverse winds and dangers of navigation. So we are forced to the conclusion that the only practical route for canal traffic for a thousand-ton barge would be along the more expensive line which can only be built at a cost under the State Engineer's estimate, and assuming that the bonds were for fifty years and the interest at three per cent. of $193,980,967.50, principal and interest. This plan only contemplates the deepening of the Champlain canal to seven feet, but the advocates of canal improvement now desire that it should also be deepened to a twelve-foot level, which

would increase the cost to $215,000,000. It is well known that no great undertaking of this character ever was completed within the engineer's estimate, but owing to increase in the cost of labor and material there should be a factor for safety of at least twenty per cent. more, which would make a probable ultimate cost for construction of over $255,000,000 in principal and interest, from which should be deducted the interest of the sinking fund. Suggestions have been made, and it is but fair that they should be presented to you, that if the canal were enlarged to a nine-foot level and by the use of the water powers of the State and by the introduction of electric motors that not only the same object could be accomplished, but that sufficient revenue could be derived from the sale of power to almost maintain the canal. The cost of electric equipment and providing water power would be much less than under the thousand-ton plan, and perhaps would accomplish the same results. If this be feasible I am sure that all who are interested in the welfare of the canals would be glad to give it consideration. If this plan should be adopted, the canal could be constructed within two or three years, and the constant withdrawal of commerce could be checked much more rapidly than under the thousandton barge plan and it could be provided for under the present Constitution. The former would require an amendment. If it should be deemed wise to select the thousand-ton barge plan, it could be submitted to the people this fall under the eighteenyear bonding clause of the Constitution, and no work performed until the adoption of a constitutional amendment extending the time of payment. In the event of a refusal by the people to so amend section 4 of article 7, under the same section the Legislature can repeal or render inorperative the expenditures au

thorized and thus safeguard against excessive taxation, which would be required for the improvement. In the event of the thousand-ton barge plan being authorized, I would recommend the adoption of a concurrent resolution providing for the reimposition of limited tolls, which would perhaps produce revenue enough to provide for the maintenance of the canal, believing that the lowering of the freight rates would be so great that a tollage could be easily met without interfering with the results. which it is hoped to accomplish under this plan. The money for payment of principal and interest of the debt could be met by a dividend tax upon the capital stock of manufacturing corporations, which would produce about $2,400,000, and by modifications of existing revenue laws by slightly increasing the rates affecting others than corporations. But as it is not necessary to provide this revenue until the plan shall be approved by the people, there is no immediate necessity for the consideration of this part of the problem other than the adoption of a resolution for the reimposition of tolls, which must be by constitutional enactment.

Important changes were made at the last session of the Legislature in the law relative to the institutions for the insane, which were, first, the substitution of boards of visitors for the old boards of managers; second, the centralization of all powers in the Commission of Lunacy, the details of management as heretofore being left with the superintendent.

The changes made in the government of the charitable institutions of the State were the creation of a new office known as the Fiscal Supervisor, whose duty it should be to investigate and supervise all financial transactions of this department, the management being left in the boards of managers as heretofore;

second, the creation of a commission consisting of the Governor, the State Comptroller and the President of the State Board of Charities, whose approval should be necessary to all plans and specifications for new buildings or additions.

In the administration of this important part of the State work above everything is to be considered the physical and medical treatment and care of its wards. No change would nor should meet with approval that sought to effect economies at the expense of the health or the comfort of the inmates of our institutions. Too much sentiment, however, is as undesirable as too much economy, but there can be a happy medium which will be satisfactory to those interested in charitable work and who regard any innovation with distrust and disfavor, as well as to those who believe that the administration of all of the State departments should be upon strict business lines.

Some features of the administration of the Department of Lunacy have always been undesirable, and extravagances existed which did the patients no good and which accomplished nothing in the direction of cures. It was to correct this that the amendments to the laws were recommended. The wisdom of these changes has been shown by the results produced. A more liberal allowance in measuring accommodations has been adopted than heretofore; an extension of the system of joint purchases has been followed with resultant economy, and while in no way depriving the localities in which these institutions are situated of the privilege of supplying goods, it must be done after competitive bidding and local influences in these matters have been eliminated. The monthly reports of the Boards of Visitation which the law provides for have brought to the attention of the Commission in Lunacy and the Governor at once

the necessity for repairs or for the correction of conditions which need immediate remedy, and have prevented delays which frequently resulted under the old management and which produced discomfort to the patients. The new law has also had the effect of separating the medical from the business administration of the institutions. It has saved the State, through the abolition of the treasurers and other features of administra tion, about $20,000 per annum. It has limited the cost of new buildings to $450 per capita, which is considered ample by the State Architect. But above all, the entire responsibility for the administration of these institutions has been absolutely fixed in the State Commission in Lunacy. The boards of visitors consist of devoted men and women, and they show great interest and intelligence in the performance of their duties. There is more marked efficiency and more devotion to the work than existed under the old boards, whose members did not believe that it devolved upon them to criticise their own appointees. Not being so embarrassed, the boards of visitors criticise intelligently and in a manner to bring speedy relief. All complaints have been promptly investigated and the recommendations made have been acted upon favorably so far as possible. More food is allowed, and in every way possible attempts have been made to raise the standard of administration. There have been fewer recoveries during the past year, the total for 1901 being 1,209, and for 1902, 1,125. The physicians, when asked for the reason for this apparent decrease in the rate of recovery, state that it is because a different class of patients is being received in the institutions. In other words, that the local hospitals are treating acute cases of insanity with considerable success, thus relieving their relatives from the necessity of placing them in