ANNUAL MESSAGE 
 
 OF THE 
 
 GOYEEN'OE 
 
 OF THE 
 
 State of New Yoek. 
 
 TRANSMITTED TO THE LEGISLATURE JANUARY 5, 1875. 
 
 \ 
 
 ALBANY: 
 
 WEED, PARSONS AND COMPANY, PRINTERS. 
 1875. 
 
Avery Architectural and Fine Arts Library 
 Gift of Seymour B. Durst Old York Library 
 
 lEx HibrtH 
 
 SEYMOUR DURST 
 
 When you leave, please leave this book 
 
 Because it has been said 
 " Ever' thing comes t' him who waits 
 
 Except a loaned book." 
 
ANNUAL MESSAGE 
 
 OF THE 
 
 GOVEKNOK 
 
 OF THE 
 
 State of New Yoke. 
 
 TRANSMITTED TO THE LEGISLATURE JANUARY 5, 1875. 
 
 ALBANY: 
 
 WEED, PARSONS AJSTD COMPANY, PRINTERS. 
 1875. 
 
STATE OF NEW YORK. 
 
 Wo. 3. 
 
 IN ASSEMBLY, 
 
 January 5, 1875. 
 
 ANNUAL MESSAGE OF THE GOVERNOR. 
 
 Executive Chamber, ) 
 Albany, January 5, 1875. ) 
 
 To the Legislature : 
 
 At the advent of a new year, when the public bodies assemble, to 
 consult in respect to the affairs, and to transact the business of the 
 State, our first thought should be, to offer up devout thanksgiving to 
 the Supreme Disposer of events, for the blessings which we have 
 enjoyed during the year now closed. Our great Commonwealth com- 
 prises a population of more than four and a half millions — largely 
 exceeding that of the whole United States at the formation of the 
 Federal Government — and embracing vastly more extensive and diver- 
 sified interests and activities. Our sense of duty ought to be com- 
 mensurate with the magnitude of the trust conferred upon us by the 
 people. Forming, as our State does, so important a part of the 
 American Union, the benefits of an improved polity, of wise legisla- 
 tion, and of good administration, are not confined to our own citizens, 
 but are felt directly and by their example, in our sister States, and in 
 our national reputation throughout the world. Mindful, with you, of 
 these ^usiderations, I proceed to perform the duty enjoined by the 
 constiu n upon the governor, to " communicate, by message to the 
 Legislature," "the condition of the State," and to "recommend such 
 matters to them, as he shall deem expedient." 
 
4 
 
 Governor's Message. 
 
 RECEIPTS AND EXPENDITURES. 
 
 The receipts into and payments from the Treasury, on account of 
 all the fuuds, except the Canal and Common School Funds, for the 
 fiscal year ending September 30, 1874, were as follows : 
 
 Receipts $26, 465, 370 43 
 
 Payments 19, 636, 308 36 
 
 Balance in the Treasury September 30, 1874. . $6, 829, 062 07 
 The available balance amounted to $6, 494, 881 44 
 
 The difference being made up by the defalcation in the State Treas- 
 ury in 1873, of $304,957.91, and the sum of $29,222.72, being an old 
 balance due from the Bank of Sing Sing. 
 
 STATE DEBT. 
 
 On the 30th of September, 1873, the total funded debt was 
 $36,530,406.40, classified as follows: 
 
 General fund $3,988,526 40 
 
 Contingent (stock issued to the Long Island Railroad 
 
 Company) 68, 000 00 
 
 Canal 11, 352, 880 00 
 
 Bounty 21, 121, 000 00 
 
 $36, 530, 406 40 
 
 During the months of August and September, 1873, stocks of the 
 Bounty Loan were purchased to the amount of $306,000, but not can- 
 celed until after September 30, 1873. Deducting this sum, the 
 bounty debt amounted to $20,815,000, and the total debt to 
 $36,224,406.40. 
 
 On the 30th September, 1874, the total funded debt was $30,199,- 
 456.40, classified as follows : 
 
 General fund $3, 988, 526 40 
 
 Contingent 68,000 00 
 
 Canal 10, 230, 430 00 
 
 Bounty 15, 912, 500 00 
 
 $30, 199,456 40 
 
Governor's Message. 
 
 5 
 
 The actual reduction of the State debt during the fiscal year ending 
 September 30, 1874, by cancellation of matured stocks, and by the 
 purchase of $4,902,500 of Bounty Loan 7s of 1877, for the Bounty 
 Debt Sinking Fund, is $6,024,950. 
 
 In addition to the $4,902,500 of Bounty Stock, purchased for the 
 Bounty Debt Sinking Fund during the last fiscal year, and canceled, 
 there have been investments for that sinking fund, since the date of 
 the last report to the present time, in State Securities and Govern- 
 ment Kegistered Bonds to the amount of $4,381,500, at a cost of 
 $4,972,091.35; add $327,283.88 premium and $3,210 commissions 
 on Bounty Loan Stock purchased and canceled, and $1,421,584, in- 
 terest on Bounty Debt, makes a total of $11,626,667.23 paid on ac- 
 count of this Sinking Fund since the date of last report to the present 
 time. The securities, now held in trust for this sinking fund, amount, 
 at their par value, to $6,802,944.09, which could be disposed of, at 
 the present market rates, at an average premium of over twelve per 
 cent. 
 
 The following statement shows the amount of the State debt on the 
 30th September, 1874, after deducting the unapplied balances of the 
 sinking funds at that date : 
 
 Balance of sinking Balance of debt 
 Debt on the 30th funds on 30th after applying 
 September, 1874. September, 1874. sinking funds. 
 
 General Fund.... $3,988,526 40 $4,142,693 84 
 
 Contingent 68,000 00 32,823 49 $35,176 51 
 
 Canal 10,230,430 00 1,561,018 99 8,669,411 01 
 
 Bounty 15,912,500 00 *7,125,278 20 8,787,221 80 
 
 $30,199,456 40 $12,861,814 52 $17,491,809 32 
 
 The State debt on the 30th September, 1873, after 
 deducting the unapplied balances of the sinking funds, 
 
 amounted to $21,191,379 34 
 
 On the 30th September, 1874, to 17,491,809 32 
 
 Showing a reduction of $3,699,570 02 
 
 * Deducting interest accrued to October 1, 1874, payable January 1, 1875. 
 
6 
 
 Governor's Message. 
 
 TAXES. 
 
 The State tax levy for the current year amounted to 7^ mills. 
 The total amount of the tax will be $15,727,482.08, about $900,000 
 in excess of the amount levied during the preceding fiscal year. 
 
 OTHER DEPARTMENTS OF THE STATE. 
 
 Summary statements in respect to the Banks, Savings Banks, Trust, 
 Loan and Indemnity Companies, Insurance Companies, Quarantine, 
 the Emigration Commission, Common Schools, Colleges and Acade- 
 mies, the State Library and Museum, the National Guard, the soldiers 
 of the war of 1812, the war claims against the United States, the Salt 
 Springs and the State Prisons, are appended. The full reports of 
 the public officers and boards, charged with the special care of these 
 subjects, will be transmitted as soon as their preparation is completed. 
 Your attention is invited to them, and especially to the report of the 
 Comptroller, which will be submitted at the opening of the session. 
 
 STATE CENSUS. 
 
 The Constitution provides that an enumeration of the inhabitants 
 of the State shall be taken, under the direction of the Legislature, in 
 the year 1855, and at the end of every ten years thereafter. 
 
 Chapters 64 and 181 of the Laws of 1855, and chapter 34 of the 
 Laws of 1865, which remain in full force, prescribe the manner of 
 taking the enumeration. 
 
 These acts require the Secretary of State to prepare uniform blank 
 returns and abstracts, for the purpose of taking the enumeration and 
 obtaining statistical information as to population and social statistics, 
 the resources and interests of the State, individual and associated 
 industry, agriculture, the mechanic arts, commerce and manufactures, 
 education, and other information of great value to the statician and 
 all classes of citizens, and will probably require little or no modi 
 iication. 
 
 It will be necessary for the Legislature to make an appropriation to 
 enable the Secretary of State to carry into effect the provisions of the 
 
Governor's Message. 7 
 
 Constitution and statutes above referred to. A sum equal to the 
 amount appropriated in 1865 for that purpose, by chapter 598 of the 
 Laws of that year, will probably be sufficient. 
 
 The Secretary of State has taken preliminary steps toward taking 
 the enumeration, and looks to the Legislature for an early appropria- 
 tion to enable him to go forward with the work. 
 
 PAUPERISM. 
 
 The annual report of the State Board of Charities will be laid 
 before the Legislature, and I commend it to your attention. It will 
 contain the results of a special examination in respect to the condition 
 of children in the poor-houses, and the subjects of out-door relief and 
 alien paupers. The laws relating to pauperism need revision and 
 amendment. The growth of the State in wealth and population has 
 brought with it more complex relations between capital and labor, 
 which should be carefully studied, in order that legislation may be 
 adapted to their requirements. I suggest whether it is not advisable 
 that a commission be appointed to investigate and report upon the 
 management and relief of the poor, and to propose such legislation as 
 will tend to relieve the industry of the State from the evils which 
 result from poor laws, vicious or inadequate in conception, or defec- 
 tive in execution. 
 
 CENTENNIAL EXHIBITION. 
 
 The celebration of the centennial anniversary of American Inde- 
 pendence will occur in the year 1876. Under the auspices of the 
 general government an international exhibition of arts, manufac- 
 tures and natural products will be held in the city of Philadelphia. 
 Provision has already been made for the appointment of a board of 
 five commissioners to represent this State, who are to serve without 
 compensation. I recommend a moderate appropriation of money, 
 which will be required to defray the necessary expenses of the com- 
 mission, and enable this State to take such part in the exhibition as 
 will testify our sense of the greatness of the event commemorated, 
 and is suitable to the dignity of our Commonwealth. 
 
8 
 
 Governor's Message. 
 
 CONSTITUTIONAL AMENDMENTS. 
 
 The adoption of the recent amendments to the Constitution ren- 
 ders necessary some important legislation in order to carry them into 
 full effect. The changes made in article 2 require corresponding 
 changes in the election laws, with respect to challenges and the oaths 
 thereupon, and the enactment at the present session of a law " exclud- 
 ing from the right of suffrage all persons convicted of bribery or of 
 any infamous crime." 
 
 The amendment of section 4 of article 8 of the Constitution, 
 requires the enactment of a " general law conforming all charters of 
 savings banks, or institutions for savings, to a uniformity of powers, 
 rights and liabilities." 
 
 The addition of article 15 necessitates the passage of an act pre- 
 scribing the punishment for the offense of bribery created in sections 
 1 and 2. Some legislation may be necessary in consequence of the 
 change in the mode of compensating members of the Legislature, and 
 in some other matters which will readily occur to you. 
 
 The section added to article 3 as section 18 requires the passage of 
 general laws, providing for the cases in which special legislation is 
 prohibited by that section. Many of these cases are within existing 
 general laws, and, with respect to several others, no immediate legis- 
 lation seems to be required. Doubtless, however, some legislation is 
 expedient, either in the way of enacting statutes providing for the cases 
 to which the existing statutes do not apply, or in the way of amend- 
 ments to existing statutes. 
 
 The provision prohibiting special legislation in the cases specified 
 is the amendment, from which the largest benefits have been antici- 
 pated. In framing the general laws which are to provide for 
 these cases, great caution will be necessary. The part I took in 
 the Convention of 1846, and even before the enactment 
 of the general banking law of 1838, in advocating the 
 principle of general laws in its application to the creation of cor- 
 porate bodies which had been practical monopolies, and to other cases 
 where it seemed to be safely applicable, may justify me in sug- 
 gesting some qualification of the advantages to be derived from the 
 change, unless it be accompanied by especial foresight and wisdom. 
 
Governor's Message. 
 
 9 
 
 It will doubtless be an unavoidable necessity to modify existing 
 general laws, and to shape new ones to be enacted with reference to 
 special and peculiar cases. It is quite possible to give "a general form 
 to the phraseology of every enactment intended to apply to a special 
 case, and to operate as a special grant of powers. 
 
 The benefit intended to be secured by the prohibition may thus 
 be defeated. Even greater mischiefs than those which existed under 
 the old system may be created. 
 
 The parties interested in promoting a law intended to obtain special 
 powers for a particular case, cannot be relied on to guard against the 
 possible operation of the general provision in the other cases to which 
 it may be applied. The legislators, who could measure the whole 
 consequences of an act limited in its terms to a special instance, can- 
 not foresee the possible cases to which a general law adapted to the 
 instance present to his mind, may be found capable of applying, or 
 what operation it may have. There will, therefore, be great danger 
 of vague, loose and hasty legislation in contemplation of one object, 
 but capable of working in numerous cases results neither foreseen or 
 intended. 
 
 The new legislation called for by this provision should be framed 
 with more than ordinary care. 
 
 FRAUDS AND MALVERSATION BY PUBLIC OFFICERS. 
 
 It will be the first and most imperative of our duties to revise the 
 laws which are intended to provide criminal punishment and civil 
 remedies for frauds by public officers, and by persons acting in com- 
 plicity with them. The condition of our existing statutes and of our 
 unwritten law, as its provisions for such cases have been construed 
 and declared by recent decisions of the court of final resort, disclose 
 grave defects. The practical evils resulting from these defects are 
 greatly increased by the recent frequency and magnitude of violations 
 of official trust. 
 
 IMPERFECTION OF CRIMINAL LAWS. 
 
 The statutes punishing embezzlement are held not to apply to such 
 offenses, when committed by public officers. The statutes relating to 
 larcenies are deemed to be of questionable application to a fraudulent 
 2 
 
10 
 
 Governor's Message. 
 
 acquisition of public funds, existing in the form of credits inscribed on 
 the books of a bank, and known in the lauguage of commerce as 
 deposits. The statutes in regard to obtaining money or property by 
 false pretenses, are not free from technical embarrassments in their 
 application to public frauds. Without assenting to the conclusion 
 that these statutes are wholly unavailable in such cases, it cannot be 
 doubted that they are inadequate, unfit for the exigencies of the times, 
 aud that they abound in needless technical questions which tend to 
 the defeat of public justice. 
 
 JS T o illustration of these defects can be so impressive, as certain 
 facts of recent experience. A public officer designated by statute of 
 the State, and authorized, with two others, to audit the then existing 
 liabilities against the county of New York, fraudulently made an 
 audit, or certified to an audit not made, of fictitious claims to the 
 amount of six millions of dollars, and instantly received a million 
 and a half of the money paid on such audits, through a common 
 agent between himself and the pretended owners of the claims. 
 For this flagrant crime, accompanied by many circumstances of aggra- 
 vation, the eminent counsel, who represented the people, deemed it 
 prudent to seek convictions only for misdemeanors in neglect of offi- 
 cial duty, the punishment for each of which is imprisonment in the 
 penitentiary for a term not exceeding one year, and a fine not exceed- 
 ing two hundred and fifty dollars. When we consider that a person, 
 who, under the temptation of pressing want, steals property of the 
 value of over twenty -five dollars, is liable to imprisonment in the 
 State prison for a term of five years, and that the other offenses 
 against private property are punishable with corresponding seventy, 
 the inadequacy of the law applicable to great public delinquents, 
 betraying the highest trusts, and plundering the people on a grand 
 scale, is revolting to all just notions of morality and justice. 
 
 RECOMMENDATIONS. 
 
 I recommend the enactment of a statute whicli shall clearly embrace 
 such offenses, and impose penalties upon them proportionate to their 
 moral turpitude and to the mischief which they inflict upon society. 
 It can apply only to future cases; but it may be expected to dp 
 something toward preventing a recurrence of such evils. 
 
Governor's Message. 
 
 11 
 
 CIVIL REMEDIES. 
 
 The existing civil remedies applicable to such cases are no less 
 inadequate. For the last three years, the spectacle has been exhibited 
 on the conspicuous theater of our great metropolis, of fraudulent 
 officials remaining in quiet possession and making unobstructed dis- 
 positions of great wealth, which we are morally certain was derived 
 from their spoliation of public trusts, notwithstanding legal proof of 
 the most conclusive nature exists of their guilt. In the meantime, 
 civil actions have been dragging their slow length along, as in ordi- 
 nary cases of disputed rights, while the " laws delay " has been main- 
 tained by the use of the vast fund abstracted from the public, and no 
 process has been found in our laws by which it could be attached and 
 preserved pending the litigation, or its disposition interfered with 
 before final judgment. 
 
 RECOMMENDATION. 
 
 • A bill to extend to such cases the remedy of attachment as in case 
 of foreign corporations, or non-resident, absconding, or concealed 
 defendants, has been heretofore submitted to the legislature. I trust 
 that such a measure will be speedily adopted. I recommend, further, 
 that preference be given to such cases in the courts, whoever may be 
 the party plaintiff. 
 
 A GREAT DEFECT IN OUR JURISPRUDENCE. 
 
 A still more serious defect exists in our jurisprudence. Where a 
 wrong is committed, which affects the treasury of a city, county, town 
 or village, the officers who would be the proper plaintiffs in any suit 
 for redress, or who possess exclusively the power to institute or con- 
 duct such suits, may be themselves the wrong-doers, or be in com- 
 plicity with the wrong-doers. In every such case, the remedy must, 
 of course, be very much embarrassed, if not wholly unavailing. The 
 unfaithful inenmbents may be entitled to serve for a long term, or 
 they may possess great facilities for gaining the favor of their suc- 
 cessors. While the remedy is thus delayed — perhaps for years — 
 the proofs may be lost ; or the depredators may make away with their 
 
12 
 
 Governor's Message. 
 
 property, and withdraw their persons from the reach of process ; or 
 they may, through the lapse of time, become discharged from liability 
 by the statute of limitations. As the offense becomes stale, the 
 public sentiment, which inspires voluntary efforts of patriotic citizens 
 in behalf of the people to seek redress, is wearied and weakened. 
 On the other hand, temptations are strengthened and developed into 
 actual crimes by the prospect of impunity, which grows out of tardi- 
 ness and uncertainty in the remedial law. 
 
 ATTEMPTS TO REMEDY THAT DEFECT. 
 
 The frequent occurrence of malversation in local governing officials, 
 has stimulated ingenuity to devise some judicial remedy. At first it 
 was conceived that the injured tax payers or inhabitants might, in 
 their own names, invoke judicial aid. An analogy was set up to the 
 case of a private corporation in which a corporator, on the omission 
 of the directors to sue, might bring an action, in behalf of himself 
 and his associates, making the corporate body a defendant. The idea 
 received much favor from the courts in the judicial district which 
 comprises the city of New York. 
 
 But the Court of Appeals in Roosevelt v. Draper, and in DoolitUe 
 v. Supervisors of Broome County, decided that the individual tax 
 payer had no special interest distinct from that of the public, which 
 would enable him to sustain an action, in person, for the redress of a 
 public wrong of the nature involved in those cases. In the former 
 case, the intimation was made, that the true " remedial process against 
 an abuse of administrative power tending to taxation, is furnished by 
 our elective system, or by a proceeding in behalf of the State in the 
 latter, that " for wrongs against the public, the remedy, whether civil 
 or criminal, is by a prosecution instituted by the State in its political 
 character, or by some officer authorized by law to act in its behalf." 
 
 The whole reasoning of the court proceeded upon this ground, nor 
 does it seem to have been questioned by the counsel on either side. 
 The remedy intimated in these decisions has been recognized as estab- 
 lished law in Great Britain, from which we inherit our equity juris- 
 prudence, by a series of great precedents. It has been applied to 
 populous municipalities, like Liverpool, and to corporate funds 
 
Governor's Message. 
 
 13 
 
 derived from taxation, and applicable to general municipal purposes. 
 It is a natural deduction from the historic origin and the expansive 
 philosophy of the equity system, whose proud boast has ever been 
 that it leaves no wrong without a remedy. 
 
 On the discovery in 1871 of the frauds committed by the govern 
 ing officials of the municipality of New York, the Attorney-General, 
 acting on these intimations of our own courts and on the English 
 precedents, instituted actions against the parties inculpated by posi- 
 tive proofs. Within the last year the Court of Appeals, in the cases 
 of The People v. Tweed, Ingersoll et al., and of The People v. Fields, 
 has decided that the State cannot maintain those actions. The result 
 is at last arrived at, that neither the taxpayer, nor the State in his 
 behalf, can seek redress ; that in all the long interval, nobody has 
 been competent to sue or conduct a suit, except some corporation 
 counsel who was an appointee of the accused parties. This is a state 
 of our jurisprudence which calls for new legislation. 
 
 NEW LEGISLATION. 
 
 In choosing between the two expedients of vesting the right to 
 sue in the individual taxpayer or in the State, it is obvious that the 
 latter should be preferred. The existing statutes intended to confer 
 some limited rights on the individual taxpayer, are practically nuga- 
 tory. The reasoning of the Court of Appeals, in the cases denying 
 him the right under our customary jurisprudence or the common 
 law, argues with cogency the inconveniences which might attend the 
 possession of such a power by every member of so multitudinous a 
 body. The wiser alternative is to vest the power in the people of 
 the State, acting by their Attorney-General. It will be analogous to 
 the authority which exists in respect to private corporations and in 
 cases of nuisances, and of quo warranto: and will be in conformity 
 to the safe methods and traditional usages of equity jurisprudence. 
 
 LOCAL SELF-GOVERNMENT. 
 
 The establishment of such a remedy for the injured taxpayer or 
 citizen will not detract from, but will make possible, and will found 
 
14 
 
 Governor's Message. 
 
 on a durable basis local self-government. Human society will 
 struggle, like every tiling that lives, to preserve its own existence. 
 When abuses become intolerable, to escape them it will often surren- 
 der its dearest rights. 
 
 All the invasions of the rights of the people of the city of New 
 York to choose their own rulers and to manage their own affairs — 
 which have been a practical denial of self-government for the last 
 twenty years — have been ventured upon in the name of reform, 
 under a public opinion created by abuses and wrongs of local adminis- 
 tration, that found no redress. When the injured taxpayer 
 could discover no mode of removing a delinquent official, and 
 no way of holding hijn to account in the courts, he assented 
 to an appeal to the legislative power at Albany; and an act 
 was passed whereby one functionary was expelled, and by some 
 device the substitute selected was put in office. Differing in poli- 
 tics as the city and State did, and with all the temptations to indi- 
 vidual selfishness and ambition to grasp patronage and power, the 
 great municipal trusts soon came to be the traffic of the lobbies. It is 
 long since the people of the city of New York have elected any 
 Mayor who has had the appointment, after his election, of the impor- 
 tant municipal officers. Under the charter of 1870 and again under 
 the charter of 1873, the power of appointment was conferred on a 
 Mayor already in office. There has not been an election in many 
 years, in which the elective power of the people was effective to pro- 
 duce any practical results, in respect to the heads of departments in 
 which the actual governing power really resides. 
 
 A new disposition of the great municipal trusts has been generally 
 worked out by new legislation. The arrangements were made in 
 secret. Public opinion had no opportunity to act in discussion, and 
 no power to influence results. Inferior offices, contracts, and some- 
 times money were means of a competition, from which those who 
 could not use these weapons were excluded. 
 
 Whatever defects may sometimes have been visible in a system of 
 local self-government, under elections by the people, they are infin- 
 itely less than the evils of such a system, which insures bad govern- 
 
Governor's Message. 
 
 15 
 
 ment of the city, and tends to corrupt the legislative bodies of the 
 State. 
 
 A popular election invokes publicity — discussion by the contend- 
 ing parties — opportunity for new party combinations, and all the 
 methods in which public opinion works out results. 
 
 OFFICIAL ACCOUNTABILITY A CONDITION OF MUNICIPAL INDEPENDENCE. 
 
 No part of the civic history of this State is more instructive than 
 the recorded debates of the Convention of 1821, on the question of 
 electing, by the voters of the counties, the sheriff, who is the execu- 
 tive arm of the State. It wa6 thoughtfully considered by our fore- 
 most statesmen. Its solution embraced the two ideas — the selection 
 by the locality, and the removal for cause by the State. The Con- 
 vention of 1846 carried its dispersion of the power of choosing local 
 officers, much farther, on the same system. That system is to dis- 
 tinguish between the power of electing or appointing the officer and 
 the power to hold him to account. It is, while dispersing the one to 
 the localities, to reserve the other to the State, acting by its general 
 representatives, and as a unit; to retain in the collective State a 
 supervisory power of removal, in addition to whatever other accounta- 
 bility may result to the voters or authorities of the locality, from the 
 power to change the officer at the expiration of his term, or from 
 special provisions of law. 
 
 The two ideas are not incompatible. On the contrary, each is the 
 complement of the other. Such dispersion of the appointing power 
 has become possible, only because these devices have been invented 
 to preserve accountability to the State. 
 
 The right of the State, by its general representatives to remove, is 
 capable of being made to destroy the local election or appointment. 
 The right of the State to sue is not. It is less in conflict with the 
 local power of election and appointment. Official accountability is 
 not complete if there is no remedy for official wrongs but removal. 
 That remedy needs to be supplemented by accountability in the courts 
 on the appeal of a taxpayer or citizen of the locality. If a right to 
 that appeal is denied, the appeal will continue to be made, on often 
 
16 
 
 Governor's Message. 
 
 recurring occasions, to the legislative power; and the system oi the 
 last twenty years will be perpetuated. 
 
 MUNICIPAL PROBLEM. 
 
 The problem of municipal government is agitating the intellect of 
 all civilized peoples. In our own State it is the more interesting and 
 important because it involves the half of all our population, which 
 lives in cities or large villages. 
 
 The frame-work of the system which we should adopt must be 
 intrenched in the fundamental law; and protected, by constitutional 
 restrictions, from arbitrary and capricious changes by legislation. 
 This problem failed of any solution in the recent amendments to the 
 Constitution. It is worthy of long continued thought and debate. 
 Time and discussion will at last mature a safe and wise result. 
 
 THE ERIE CANAL AND THE TRANSPORTATION PROBLEM. 
 
 The State of New York, not denying the general unfitness of gov- 
 ernment to own, construct or manage the works which afford the 
 means of transportation, saw an exception in the situation, and in the 
 nature of the canals, which are trunk communications between the 
 Hudson and the great inland seas of the North and West. They 
 connect vast navigable public waters, and themselves assume some- 
 thing of a public character. 
 
 THE NATURAL PASS OF COMMERCE. 
 
 The voyage from Europe to America, even if destined to Southern 
 ports, is deflected by the ocean currents so as to pass closely by the 
 gates of our commercial metropolis. That capacious harbor is open 
 the whole year, accessible in all prevailing winds, is sheltered, safe 
 and tranquil. From it the smooth waters of the Hudson give transit to 
 the lightest hull, carrying the largest cargo, which the skill of man 
 has brought into use. The head of navigation on the Hudson touches 
 the natural pass of commerce, opened up in the geographical config- 
 uration of this continent, where the Alleganies are cloven down to 
 
Governor's Message. 
 
 17 
 
 their base, and travel and traffic are allowed to flow accross on a 
 level and by the narrowest isthmus, to the lake ports, which connect 
 with all that great system of inland water communication and interior 
 commerce, the most remarkable, in its character and extent, and acces- 
 sories, that exists in any part of the globe 
 
 THE NORTHWEST. 
 
 Tributary to the western centres of lake commerce, such as 
 Chicago and Milwaukee, are vast areas of fertile soils, which stretch 
 to and partly include the valley of the Upper Mississippi. Open 
 prairies, easily brought into cultivation, fitted for the use of agricul- 
 tural machinery, adapted to the cheap construction of railways, and 
 peculiarly dependent on their use as a means of intercourse and 
 traffic, have been opened to settlers at nominal prices. They have 
 been rapidly filled by a young, intelligent and energetic population, 
 trained in the arts and industries of an older civilization, and apply- 
 ing them to natural advantages which have been found elsewhere, 
 only in conjunction with the social barbarism of an uninhabited wil- 
 derness. They are now covered with a net work of railways, which 
 connect myriads of little centres with the lake ports and with the 
 trunk railways, that bring them into practical contiguity to our great 
 Eastern centres of population, capital, commerce and manufactures. 
 
 new York's liberal policy — the erie canal trust. 
 
 New York, without arrogating to itself an undue share in these 
 achievements, may contemplate with proud satisfaction its contribu- 
 tion to results so magnificent. Important as are the advantages 
 which have accrued to itself, it has not sought to monopolise the 
 benefits of its policy. The price of such cereals and other products 
 of agriculture as are exported in considerable quantities, are mainly 
 fixed by the competitions of the foreign markets, even for our own 
 consumption. The cheapening of the cost of transit, therefore, chiefly 
 profits the producer. This consideration illustrates how large and 
 liberal, in the main, is the policy adopted by the State — a policy 
 3 
 
18 
 
 Governor's Message. 
 
 which I had the satisfaction of advocating in 1846 and 1867 — of 
 treating these great works as a trust for the million, and not seeking 
 to make revenue or profit for the sovereign out of the right of way. 
 In consonance with the same policy, was the action of the State in 
 1851, in permitting the transit free of tolls, upon a railway which it 
 allowed to be constructed between the termini of the Erie canal and 
 along its bank. It had originally undertaken the construction and 
 administration of the canal, in order to create a facile and cheap 
 transportation demanded by the interests of the people, and not 
 otherwise possible to be attained. It did not fbrget the motive for 
 which it had acted, and remember only its selfish interests as a pro- 
 prietor. It, therefore, by an act which anticipated the necessity 
 afterward to arise by the construction of rival routes, repealed all 
 restraints on the carriage of property, and opened to free competition 
 every mode of transit, even in rivalry to its own works, for the pro- 
 ducts of the west and for the manufactures and merchandise of the 
 east. 
 
 NOT TO BE ABANDONED. 
 
 The Erie Canal remains an important and valuable instrument of 
 transport, not only by its direct services, but by its regulating power 
 in competition with other methods of transportation. The State, so 
 far as we can now foresee, ought to preserve it, and not contemplate 
 its abandonment. 
 
 DUTIES OF THE STATE. 
 
 If the State accepts the view which commands it to abstain as a 
 proprietor from making profit out of the canal, but to deal with it as 
 a trust, it still has great duties to perform. It is bound, as a faithful 
 trustee, to protect this great work, not only from a spoliation of its 
 revenues 'and from maladministration, but from empirical changes, 
 proposed in the seductive form of specious improvements that would 
 destroy its usefulness while charging it with new incumbrance ; and 
 from an improvident tampering with its incomes that would dissipate 
 its means of effecting real improvements. 
 
 These are its ever-recurring and its greatest perils. 
 
Governor's Message. 
 
 10 
 
 LAKE AND CANAL NAVIGATION CANNOT BE ASSIMILATED. 
 
 The 925 miles of lake navigation from Chicago to Buffalo, and the 
 495 miles of canal and river navigation from Buffalo to New York, 
 and the 3,000 miles of ocean navigation from New York to the Old 
 World, cannot be made homogenous or even assimilated ; each is sub- 
 ject to physical conditions which are unchangeable, and to which the 
 vehicle of transportation must be adapted. 
 
 LAKE BOATS UNFIT AS CANAL BOATS. 
 
 The rough and stormy lakes req uire a strong vessel, made seaworthy 
 by its deep keel, fully manned, and of a form intended for speed 
 in an unlimited expanse of water. The canal admits of a light keel, 
 and a shape which will carry a larger proportional cargo ; for the boat 
 moves safely in a tranquil channel of water, closely confiued by physi- 
 cal boundaries on the bottom and sides, and cannot but submit to a 
 slow movement. 
 
 The propellor of the lakes tends to grow in dimensions. A recent 
 one carries 70,000 bushels of wheat, or 2,100 tons. A barge to be 
 towed by each propellor is a system now being tried with fair pros- 
 pects of success. 
 
 The lake craft of the average size carries less cargo in proportion 
 to the vessel than the canal boat ; and it costs twice and a half or 
 three times as much as the canal boat per ton of capacity. 
 
 If the Canal were made large enough to pass the lake craft, the 
 transporter could not afford to use the lake craft on the canal. It 
 carries too little cargo — it is too costly — it would have to reduce its 
 rate of motion from about eight miles per hour on the lake to less 
 than three miles per hour, which is the highest aim of the canal boats, 
 that now make only ly 4 -^ miles per hour. 
 
 Such a vehicle of transport would not be adapted to the water 
 channel it must move in, and would not be economical. Tranship- 
 ment at Buffalo, with modern machinery, would cost little, compared 
 with the loss incident to using an unfit and illy adapted instrument. 
 
 To enlarge the Erie canal to dimensions adapted to the movement 
 of such a vessel, at the rate of less than three miles per hour, would 
 
20 
 
 Governor's Message. 
 
 be so inconvenient to the traffic, that it would be easier and cheaper 
 to construct an independent work. That would probably cost a 
 principal sum, the annual interest on which would be greater than 
 the entire amount now received by the carrier for his services, and by 
 the State for its tolls on all the existing business. A shorter route 
 would be likely to be preferred. The Hudson river, from Troy to 
 deep water, would need a similar reconstruction. 
 
 ENLARGED LOCKS AND UNENLARGED WATER-WAY. 
 
 A project often urged within the last ten years is the enlargement 
 of the locks and other structures of the Erie canal, without a propor- 
 tionate enlargement of the waterway. That plan exhibits a singular 
 union of injurious costliness and fatal parsimony. It is founded on the 
 fallacy that the use of a large boat, without reference to its adaptation 
 to the waterway in which it is to move, would be economical. It is 
 supported by an estimate of the State Engineer in 186-i, that the cost 
 of transportation would be reduced one-half. His opinion has been 
 repeated on all occasions until the present time. 
 
 But that estimate, when analyzed, is found to omit all the wages 
 and support of the crew during the return trip, and during the time 
 occupied in loading and unloading, and to allow for the use of the 
 boat about half its real cost. In other respects, it was utterly 
 unworthy of trust. 
 
 ECONOMY FROM THE BEST GROUP OF ADAPTATIONS. 
 
 The truth is, the boat is but one part of the whole machine of 
 transportation ; economy in the service depends upon getting the best 
 adaptation of all the various parts — the boat — the motive power — 
 the canal, with its structures and its waterway ; the best group of 
 adaptations which adjustments and compromises of each can work out 
 and combine ; and the resultant of the greatest economies which can 
 be obtained in conjunction. 
 
 A larger boat, in a waterway which now needs to be itself enlarged 
 and improved to give a good transit to the present boat, would be an 
 unmixed damage to the economy of the service, attained at immense 
 cost. 
 
Governor's Message. 
 
 21 
 
 PERFECTING THE CANAL THE WISE POLICY. 
 
 The Erie canal was planned in view of the best science and expe- 
 rience then possessed. It has excellent adaptations. It is a superior 
 instrument of transportation. It should not be fundamentally changed 
 in its character and conditions without great consideration. It should 
 be perfected, and so made available to every practicable extent, for 
 facilitating and cheapening the exchanges of commodities between 
 the East and the West. 
 
 ITS CAPACITY ITS ECONOMY. 
 
 The two questions concerning it are : first, its capacity to do an 
 aggregate business during a given period ; secondly, the economy per 
 ton per mile of the transportation it affords. These questions are 
 generally confused in all discussions. They are completely distinct. 
 They depend upon wholly different conditions. 
 
 ITS CAPACITY AMPLE. 
 
 Capacity to accommodate an aggregate tonnage during a day, a 
 month, or a season of navigation, depends on the number of boats of 
 the normal size which the locks are able to pass during the period. 
 Boats can be multiplied indefinitely. The limit to their use is in the 
 number to which the locks can give transit. The time occupied in a 
 lockage is the test. But it is unnecessary to apply that, for the actual 
 results of experience set at rest every doubt. 
 
 Of the seventy-two locks which intervene between the waters of 
 Lake Erie and the waters of- the Hudson, all but a few have been 
 doubled for many years. In 1867, when the subject was discussed in 
 the Constitutional Convention, thirteen remained single. For the 
 first time, on the opening of navigation next spring, double locks 
 will be brought into use throughout the entire canal. That will 
 nearly double the capacity of the canal to make lockages. The largest 
 delivery of the Erie Canal at tide-water was in 1862. It amounted 
 to 2,917,094 tons, in cargoes averaging 167 tons. The lockages both 
 ways, and including rafts which pass only one way, — at Alexander's, 
 which is in the throat of the canal, three miles west of Schenectady,— 
 
22 
 
 Governor's Message. 
 
 was 34,977. In 1873, the deliveries were 2,585,355 tons, in cargoes 
 averaging 213 tons, and the lockages were 21,960. 
 
 The theoretical capacity of the canal will be three or four times the 
 largest tonnage it has ever reached. There is no doubt it can con- 
 veniently and easily do double the business which has ever existed, 
 even though the locks be not manned and worked with the highest 
 efficiency. The subject of capacity may, therefore, be dismissed from 
 this discussion. 
 
 ECONOMY PER TON PER MILE. 
 
 The question really worthy of our attention is how we can perfect 
 the canal, so as to reduce the cost per ton per mile of the transporta- 
 tion it affords. 
 
 Quickening the movement of the boat increases the service it ren- 
 ders in a given period. It lessens every element in the cost of that 
 service. It enlarges the number of tons carried in the given time, 
 and by enlarging the divisor of the same expenses, it reduces the rate 
 of cost per ton per mile. 
 
 TO BE INCREASED BY PERFECTING WATER-WAY. 
 
 The economy in the transit of the boat must be made, not in the 
 locks, but in the water-way. The 72 locks in the 315 miles between 
 Buffalo and West Troy, if each takes five minutes, would occupy 
 exactly six hours. 
 
 In October, 1873, 76 boats were timed, and their average passage 
 down, with average cargoes of 227 tons, w r as 10 days, 2 hours and 
 46 minutes, or nearly 243 hours. If we double the time taken 
 in the locks, the time occupied on the levels between them would still 
 be over 95 per cent of the whole time of the voyage. It is clear, there- 
 fore, that the saving of time must be made in the 95 per cent, and not 
 in the five per cent. Economy per ton per mile in the transportation, 
 so far as it depends on the structure of the canal, is to be found in the 
 relation which the water-way bears to the boat. 
 
 The movement of the boat through water confined in an artificial 
 channel — narrow and shallow — is, at best, very slow. The engin- 
 eers, in 1835, planned the Erie Canal and the boat with such relations 
 
Governor's Message, 
 
 23 
 
 to each other as to give the greatest economy of power and facility of 
 transit. The boat has inclined to grow rather large and too square. 
 The water-way was practically never excavated in every part to its 
 proper dimensions. Time, the action of the elements, and neglect of 
 administration, all tend to till it by deposits. I may be excused for 
 repeating here what I said in the Constitutional Convention eight 
 years ago : 
 
 " What the Erie Canal wants is more water in the prism — more 
 water in the water-way. A great deal ot it is not much more than 
 six feet, and boats drag along over a little skim of water ; whereas it 
 ought to have a body of water larger and deeper even than was inten- 
 ded in the original project. Bring itnp to seven feet — honest seven 
 feet — and on all the levels, wherever you can, bottom it out ; throw 
 the excavation upon the banks ; increase that seven feet toward eight 
 feet, as you can do so, progressively and economically. You may 
 also take out the bench-walls." 
 
 RECOMMENDATIONS. 
 
 I recommend that such measures be taken as your wisdom, aided 
 by such information as can be had from the proper administrative 
 officers, may devise, to put in good condition and to improve the 
 water-way of the Erie Canal ; and that provision be made by law to 
 enable the State Engineer, soon after navigation is opened, to measure 
 the depth of water in the canal by cross-sections as often as every 
 four rods of its length, and on the upper and lower mitre-sill of each 
 lock. 
 
 FUTURE INVENTIONS AND ECONOMIES. 
 
 Such a policy, if properly executed, will give a better and more 
 economical transit to the boats, if they continue to be towed by horses. 
 It will also facilitate the use of steam canal boats, and the full reali- 
 zation of the advantages they may be expected to give as to economy 
 of transportation. The obstacle to their use in 1867 was that the 
 machinery, in its then state, displaced too much cargo to be economi 
 cal, and was, in other respects, imperfect. The progress of invention 
 since seems to promise more beneficial results. If the movement of 
 
24 
 
 Governor's Message. 
 
 the boat can be expedited from 1 ^ miles to 3 miles per hour, 
 including the time consumed in the lockages, the improvement will 
 be of great importance and value. The estimate of the able engi- 
 neer of the Commission on Steam Canal Navigation, is that the cost 
 of carriage of a bushel of wheat from Buffalo to New York will be 
 reduced from eight cents to four cents. It is not to be supposed that 
 the inventive genius applied to this interesting subject is exhausted, 
 and if these results shall, in any degree, fail to be realized by the 
 present experiments, we may, nevertheless, anticipate more complete 
 success in the future. 
 
 INCOME AND OUTGO. 
 
 It will be seen that on the Erie canal alone the surplus of income 
 over expenditures is about 37£ per cent of the gross income. If the 
 three other canals which are to be retained by the State as part of the 
 system be included, the surplus is but 11 | per cent. 
 
 TOLLS. 
 
 The present tolls on wheat are 3 yV cents, and on corn 3 cents per 
 bushel, from Buffalo to Troy — 345 miles. They were reduced in 
 1870 — those on wheat from 6^, or one-half; and those on corn 
 from 4 -j^j- to 3 cents, or about 38 per cent. 
 
 One cent per bushel taken off the present tolls, and the same pro- 
 portion on other articles, would annihilate nearly all the net income 
 of the Erie canal, considered alone, and would make a deficiency, in 
 respect to the four canals retained, of half a million of dollars a year, 
 if future expenditure should be the same as in these three years. 
 
 The construction of the details of the toll sheet belongs to the 
 Canal Board, and adjustments from time to time may be necessary. 
 Doubtless suggestions on that subject will always receive due consider- 
 ation. But in the present condition of things to embark hastily and 
 unadvisedly upon a general reduction of tolls might well be consid- 
 ered as improvident, even in respect to the canals themselves. To con- 
 fiscate the surplus of one cent, or half a cent per bushel, which 
 alone gives the means of making the improvements expected to real- 
 ize a reduction of four cents in the cost of transportation, would not 
 
Governor's Message. 
 
 25 
 
 seem a wise execution of the trust, even disregarding other consider- 
 ations which cannot be wholly overlooked. 
 
 NO RASH INNOVATIONS. 
 
 The question of altering the gates of the locks, or otherwise 
 lengthening the chambers, may be safely deferred until we can be 
 more sure of its utility. The fact that, on the Delaware and Karitan 
 Canal, which admits of long boats, the proportions which exist in 
 those now used on the Erie canal are preferred, is against that altera- 
 tion, as is also the judgment of excellent canal engineers. Holding 
 ourselves ready to accept improvements which have been sub- 
 jected to trial and scrutiny, until they are practically assured of 
 success, we ought to exercise the same caution, in respect to rash or 
 crude innovations, which ordinarily governs men in private business. 
 
 FINANCIAL RESULTS OF THE LAST THREE YEARS. 
 
 The financial results of the fiscal years ending September 30, 1874, 
 1873 and 1872, for the Erie canal, and for the Champlain, the 
 Oswego, and the Cayuga and Seneca, are as follows: 
 
 ERIE. 
 
 Year 
 
 end'g Extraordinary Total expendi- 
 
 Sept. 30. Income. Ordinary repairs. repairs. ture. 
 
 1872. $2,760,147 50 $1,025,079 09 $661,942 02 $1,687,021 11 
 
 1873. 2,710,601 49 749,977 03 967,175 39 1,717,152 42 
 
 1874. 2,672,787 22 701,340 81 973,548 96 1,674,889 77 
 
 143,536 21 $5,079,063 30 
 
 Income in excess of disbursements $3,064,472 91 
 
 Average for each year 1,021,490 97 
 
 CHAMPLAIN. 
 
 1872.. $150,644 28 $236,211 47 $251,871 61 $488,083 08 
 1873.. 153,417 86 234,677 37 562,782 95 797,460 32 
 1874.. 123,703 54 203,137 90 242,216 43 445,354 33 
 
 $427,765 68 
 
 4 
 
 $1,730,897 73 
 
26 
 
 Governor's Message. 
 
 Excess of expenditure over income $1,303,132 05 
 
 Average for each year 434,377 35 
 
 OSWEGO. 
 
 Year 
 
 end'g Extraordinary Total expendi- 
 
 Sept. 30. Income. Ordinary repairs. repairs. tare. 
 
 1872.. $90,796 57 $171,794 82 $141,673 94 $313,468 76 
 
 1873.. 88,428 13 93,938 80 78,880 58 172,819 39 
 
 1874.. 70,119 59 107,938 21 75,561 29 183,499 50 
 
 $249,344 29 $669,787 65 
 
 Excess of expenditure over income $420,443 36 
 
 Average for each year 140,164 45 
 
 CAYUGA AND SENECA. 
 
 1872.. $17,882 58 $38,267 23 $26,319 00 $64,586 23 
 
 1873.. 22,481 11 27,143 48 6,921 06 34,064 54 
 
 1874.. 19,311 47 28,934 08 28,517 04 57,451 12 
 
 $59,675 16 $156,101 89 
 
 Excess of expenditure over income $96,426 73 
 
 Average for each year 32, 142 42 
 
 RECAPITULATION FOR THREE YEARS. 
 
 Income over Expenditure. 
 
 Erie $3,064,472 91 
 
 Excess of Expenditure over Income. 
 
 Champlain $1,303,132 05 
 
 Oswego 420,443 36 
 
 Cayuga and Seneca 96,426 73 
 
 1,820,002 14 
 
 $1,244,470 77 
 
 Each year 414,823 59 
 
 THE PAYING CANALS. 
 
 It will be seen that during the last three years the income of the 
 Erie canal considered alone, has been $8,143,536.21, and its expenses 
 $5,079,063.30, yielding a surplus of $3,064,472.91, or an average for 
 
Governor's Message. 
 
 27 
 
 each year of $1,021,490.97. The excess of expenditure over income 
 of the three other canals which are to be retained by the State has 
 been $1,820,002.14, or three-fifths of the surplus produced by the Erie. 
 Considering the four as a system collectively, the surplus has been 
 $1,244,470.77, or an average for each year of $414,823.59. 
 
 THE NON-PAYING CANALS. 
 
 During the same three years the five other canals, to which the con- 
 stitutional amendment applies, have given an income of $119,864,45, 
 or for each year of $39,954.81, against an expenditure of $1,596,499.74, 
 or for each year of $532,166.59. They have consumed all the net 
 income of the paying canals and have charged the State with a loss 
 of $232,164.52, or for each year, $77,388.17. In addition to this 
 annual loss, the whole burden of the sinking fund to pay the Canal 
 debt is thrown upon the State. 
 
 INCREASE INCOME BEFORE DISCARDING INCOME. 
 
 A careful investigation whether the net incomes of the canals 
 retained cannot be increased, ought to precede a surrender of what 
 little now exist. Ordinary repairs should be scrutinized with a view 
 to retrenching their cost, and to obtaining the largest possible results 
 from the outlay. Extraordinary repairs include much which so reg- 
 ularly recurs in different forms, that they must be considered a part 
 of the maintenance of the works. No doubt they also include im- 
 provements which are of the nature of new capital. These and all 
 improvements should be governed by a plan and purpose, leading to 
 definite results ; and, instead of scattering expenditures on imperfect 
 constructions, should aim to complete and make available the specific 
 parts undertaken. Unity of administration and of system, both in 
 respect to repairs and improvements, should be established, even if 
 only by the voluntary consultation and co-operation of officers having 
 authority over separate portions of a single work. It is worthy of 
 consideration, whether any legislation can aid in securing the unity 
 in this respect, which existed under our former Constitution. 
 
28 
 
 Governor's Message. 
 
 NEW YORK THE TRUSTEE FOR THE INTERESTS OF ALL. 
 
 The State, hearing all parties interested in the use of the Canals, 
 will remember that itself, as an arbiter and trustee, must look equit- 
 abl} r to the interests of all. This it will do in a wise, liberal and just 
 spirit. To the last degree possible, it will cheapen facilities to trade. 
 It will aim to preserve for its metropolis its position as the carrier, 
 merchant and banker of the New World. 
 
 CHIEF FUNCTION OF THE CANAL SYSTEM NEW YORK CITY. 
 
 Inevitable changes must be recognized as the results of modern 
 inventions and improvements in the machinery of transportation. 
 When water routes alone existed, products came to New York for 
 distribution to points which are now more easily and cheaply reached 
 directly by rail. Railroads covering the country like a net work 
 touch so many points that they are a more perfect and complete 
 agency for the reception and distribution of produce, than a water 
 communication connecting a few principal poin ; and where the 
 transit from the producer to the consumer requires the use of the rail 
 to reach the water, or after leaving the water, or both, the all rail 
 route will often be preferred. New routes will acquire the business 
 which is naturally tributary to them, and take besides some portion ot 
 the general business. The main transportation of Western agricul- 
 tural products is for local consumption in the East. What comes to 
 us for our own consumption cannot be diverted. What goes for con- 
 sumption elsewhere cannot be acquired. The exports of agricultural 
 products to foreign countries are but a small part of the whole pro- 
 duction. In those, New York will easily continue to maintain her 
 pre-eminence. 
 
 The Champlain and Oswego canals are, as well as the Erie, in some 
 sense, trunk canals ; and the Cayuga and Seneca canal connects our 
 interior lakes. It is a noteworthy fact that Mr. Flagg, who so long 
 and honorably conducted the State finances when the Canal Depart- 
 ment was a bureau in his office, always insisted that with the four 
 canals now to be retained the system was complete. Those it is 
 now proposed to abandon are not fruits of his policy. 
 
Governor's Message. 29 
 
 disposition of the non-payino canals 
 
 The adoption of the constitutional amendment removing the pro- 
 hibition against "selling, leasing, or otherwise disposing of" the 
 canals owned by the State, in respect to all except the Erie, the 
 Oswego, the Champlain and the Cayuga and Seneca canals, undoubt- 
 edly contemplate such action on your part as will disencumber the 
 revenues of the canals retained by the State, and disembarrass the 
 treasury of the State from the unproductive works in respect to 
 which the prohibition is withdrawn. It cannot have been supposed 
 possible to " sell or lease " those works, on conditions which require 
 the purchaser to maintain and operate them. To " otherwise dis- 
 pose of" them amounts to a practical abandonment. 
 
 USE AS FEEDERS. 
 
 Even to deal with them thus involves many important questions 
 of a business character. Those portions of them which descend 
 toward the Erie canal act as feeders to supply water to that canal. 
 The supply cannot be safely diminished, and might be judiciously 
 increased. The improvement of the water-way contemplated will 
 call for more water. The consideration of what must be done to 
 retain as feeders, portions of these canals not hereafter to be main- 
 tained by the State for navigation, or wdiat other provision for a 
 supply of water shall be substituted, is important. To make the 
 change contemplated by the amendment, with as little harm as possi- 
 ble to private interests, and to consider and provide for cases of 
 possible damage which may be caused by the works when falling into 
 disuse, needs careful study of the facts of the situation. It is also to 
 be ascertained what portion, if any, of the property of the State 
 connected with these works can be wisely sold. 
 
 A SPECIAL COMMISSION RECOMMENDED. 
 
 The best suggestion which occurs to me on this subject, is to 
 impose the duty of considering and reporting on these questions upon 
 a special commission consisting of four persons. In the meantime, 
 
30 
 
 Governor's Message. 
 
 no expenditures should be made upon those works, which are not 
 strictly necessary in view of their probable future. 
 
 THE INTEREST OF NEW YORK IN THE FINANCIAL POLICY OF THE UNITED 
 
 STATES. 
 
 The State of New York receives nearly seven-tenths of all the 
 imports, and sends abroad nearly half of all the exports of the whole 
 United States. In its commercial metropolis, a much larger share of 
 our dealings with foreign nations in securities and money is trans- 
 acted, and, as at a common mart, the exchanges are largely made 
 between the people of the United States in domestic manufactures 
 and products, and in public and corporate securities and stocks. 
 More than one-half of the revenues of the Federal Government are 
 collected within its borders ; and at least one-fifth of all Federal 
 taxation falls upon its citizens. 
 
 Since the Federal Government has assumed to provide a currency 
 for the whole country, directly by the issue of its own notes, or 
 indirectly by bank notes, which are secured upon bonds of the United 
 States, and in case of default by the issuer, are to be paid, before 
 resorting to the securities, by the United States; since it has inci- 
 dentally absorbed the regulation of the business of banking; since it 
 has largely increased its taxation, and imposes that taxation in forms 
 which affect the courses of industry and the application of capital and 
 labor, it is impossible to exclude these vast operations, and the admin- 
 istrative policy and the legislation connected with them, from a 
 review of " the condition of the State," which it is the constitutional 
 duty of the Governor to communicate with such recommendations 
 " as he shall judge expedient," " to the Legislature at every session." 
 
 CAN MORE CURRENCY REVIVE PROSPERITY. 
 
 The illusion is too common that an additional issue of currency in 
 legal tenders or bank notes, would alleviate the distress now felt in 
 business, cause a general rise of prices, and revive a seeming, if not a 
 real, prosperity. Thus many are tempted to desire or to acquiesce 
 in a demand upon the Federal Government to put out new promises 
 
Governor's Message. 
 
 31 
 
 to pay, while it is yet in a long-continued default as to those heretofore 
 made ; and to do so after ten years of peace, while having no better 
 excuse for its present default, than lack of skill in applying its abund- 
 ant resources to the restoration of the public faith. 
 
 The hope of benefits to any class from such an unsound policy, 
 would prove to be completely fallacious It would prolong and 
 intensify the evils sought to be alleviated. This conclusion is clear 
 upon principle, and in our own experience. In order distinctly to 
 see its truth, it is only necessary to analyze that function in the busi- 
 ness of society, which is performed by the circulatory credits known 
 as currency. 
 
 CURRENCY BUT A PART OF CIRCULATING CREDITS. 
 
 To economize the use of metallic money, which had become the 
 common instrument of exchange, personal credit, in the form ot 
 book accounts, was introduced. For example, the farmer delivered 
 to the country merchant his grain when ready for the market, and 
 the merchant delivered his goods at the times when they were wanted 
 by the farmer for consumption ; each delivery was entered in a run- 
 ning account, until a balance was struck, and even then the settle- 
 ment generally took place without the intervention of money, which 
 neither party had the capital to own for each transaction, or to pay 
 the ultimate balance. Next came the note of hand, and, when the trans- 
 action was between parties doing business at different places, drafts and 
 bills of exchange. At last the most refined tool of commerce became 
 perfected. The bank note, promising to pay coin on demand, to bearer, 
 in an even and convenient amount, engraved and authenticated — 
 when issued by an institution or individual of established general 
 credit — was voluntarily accepted by everybody in place of coin. It 
 is the currency used in payment by those who do not keep bank 
 accounts, and, in petty transactions, by those who do keep bank 
 accounts. A credit inscribed on the books of the bank, known in 
 the language of commerce as a deposit, and transferred by check, is 
 the preferred medium of payment, in all save petty transactions, by 
 those who keep bank accounts. It is preferred because a check may 
 represent a large and uneven amount, which in notes would be incon- 
 
32 
 
 Governor's Message. 
 
 venient in the counting, handling and custody ; and a check payable 
 to order is safer, and is itself an evidence of the payment. In dense 
 communities, where the bank is near the customers, checks are mostly 
 used. In sparse communities, where the bank is remote from the 
 dealers and holders, bank notes are mostly used. 
 
 These two tools of trade and mediums of payment are, in their 
 general functions, perfectly identical. 
 
 BANK NOTES AND CHECKS THE 8AME IN EFFECT AND NATURE. 
 
 Their real nature is, that they are a provision for expected pay- 
 ments, and a reserve for possible payments. On deposits, the holder 
 submits to a partial or total loss of interest, for some banks allow 
 interest, at low rates, on deposits ; on bank notes, the holder sub- 
 mits to a total loss of interest. To each holder the motive is ever 
 present, to reduce his non-interest bearing reserve to the lowest 
 necessary amount, by investing it, if it be his own, or by returning 
 it, if it be borrowed. 
 
 THEIR AMOUNT VARIED BY PEOPLE S WANTS, IF PAYABLE IN COIN. 
 
 If the currency be redeemable, the wants of the community, and 
 not the wishes of the banks, will determine the amount which will 
 remain outstanding. All that government ought to do toward 
 fixing that amount, is to provide methods to enforce payment by 
 the issuers of such notes as the holders not wishing to use return to 
 the issuers for redemption. 
 
 AMOUNT FLUCTUATES WITH THE TIMES. 
 
 It is true that, in times of speculation, the currency increases. 
 Transactions become more numerous. Higher prices cause the 
 same transactions to absorb more of the medium of payment. 
 There is greater disposition to provide for contemplated or possible 
 operations. There is less care to economize the loss of interest on 
 the amount kept on hand. In times of depression all these condi- 
 tions are reversed. During the long period of downward tenden- 
 cies, from 1837 to 1842, the currency fell, of itself, to about one- 
 half its amount at the beginning of the period. 
 
Governor's Message. 
 
 33 
 
 THE RELATION OF CURRENCY TO PRICES. 
 
 In the ordinary and regular relations between a redeemable cur- 
 rency and prices, the fluctuations in the currency follow, instead of 
 preceding, changes in general prices. The notes in the hands of 
 the public, less the reserve kept for their redemption, form a part 
 of the loan fund of a bank, but that amount is not capable of being 
 increased at the will of the bank, until a speculation has arisen, and 
 higher prices or more transactions have resulted. 
 
 Even then, the increase of currency merely provides for the prior 
 increase of prices or of transactions. It may be said, that the 
 increase of currency is a condition without which the increase ot 
 prices or transactions could not happen, but that is not true, unless 
 it be shown that no other tool of credit than bank notes could be 
 used. 
 
 In cases where a bank originates a speculation by enlarging its 
 loans, it must do so at the expense of its customary reserve. 
 
 It is only artificial changes in the currency — generally made by 
 government — that the currency itself becomes the primal source 
 of speculation. In fact, it nearly always happens that speculative 
 purchases are originally made on personal credit, evidenced by open 
 accounts or notes of hand. The banks are applied to only at the 
 expiration of the original credit ; and then what is wanted is not a 
 continued use of bank notes, but a loan of capital. Bank notes are 
 one of the wheels in the machinery of credit. They have no qual- 
 ity peculiar in its action on prices, or different in its action on prices, 
 from any other part of the machinery of credit. The currency, 
 at its present amount of bank notes and legal tenders, is less than 
 the deposits, and is but a small fraction of the whole existing mass 
 of credits, including book accounts, notes of hand, drafts and bills 
 of exchange. And new forms of credit machinery are capable of 
 being invented indefinitely as when, in September, 1873, the New 
 York Associated Banks created a currency of twenty millions of 
 certificates, to be used in the exchanges between themselves. 
 
 5 
 
34 
 
 Governor's Message. 
 
 BUT CURRENCY ONLY SMALL PART OF CIRCULATORY CREDITS. 
 
 It is idle to pronounce the machinery of credit a maniac, dan- 
 gerous to the community, and then to put only its little linger in 
 a straight-jacket. 
 
 EXPERIENCE OF ENGLAND. 
 
 The experiment of regulating the note circulation only has been 
 completely tried in Great Britain. In 1844, when, on the re-charter 
 of the Bank of England, the bank note circulation of that country 
 was subjected to rules which were supposed to make it fluctuate 
 exactly as if it were coin, it was thought by all but a few great 
 thinkers, that there would ever after be stability of prices and sta- 
 bility of business. But in 1847, in 1S57, and in 186G, commercial 
 revolutions of undiminished severity demonstrated the fallacy ol 
 these hopes, and of the system on which they were founded. 
 While the note circulation has ever since been confined by law to a 
 nearly constant amount, the deposit circulation has increased many 
 fold. The vicissitudes of credit are as violent as ever. It is appar- 
 ent that whenever a foreign demand for coin arises, not caused b> 
 domestic overtrading, the system creates an artificial scarcity of an 
 important instrument of commerce, and subjects all business to an 
 unnecessary perturbation ; that, whenever a panic destroys the 
 credit of inferior dealers, and the interposition of the highest credit 
 is called for to supply the vacuum and revive confidence, the system 
 breaks down — the law limiting the issues of bank notes is sus- 
 pended with the approval of the Ministry, and with a promise to 
 appeal to Parliament for an act of indemnity. 
 
 WHY AND HOW INCONVERTIBLE CURRENCY DEPRECIATES. 
 
 The depreciation of a currency, not convertible into coin, repre- 
 sents the interest and risk, as estimated by the judgment of inves- 
 tors, on a loan payable at the will of the government, without 
 interest — subject to such temporary fluctuations, as are induced by 
 the variations in the supply and demand of coin in which that loan 
 is ultimately payable. 
 
Governor's Message. 
 
 35 
 
 THUS INFLATING PRICES. 
 
 There is no doubt that the issue of le^al tenders during the civil 
 war hastened and greatly increased that inflation of prices, which 
 naturally resulted from the increased consumption and the waste 
 caused by military operations, and from the diminished production 
 occasioned by so large a withdrawal of workers from their ordinary 
 industries. 
 
 It is the nature of credit to be voluntary. It is founded on con- 
 fidence. Credit, on compulsion, is a solecism. So that a forced 
 loan of capital from all existing private creditors cannot but be 
 costly. 
 
 LEGAL-TENDER FINANCING. 
 
 It was made, in this instance, on a security which bore no inter- 
 est, and interest on which could only be represented in discount 
 from its par value. It gave to the lender an agreement to pay, 
 which, being instantly due on demand, started in its career a broken 
 and dishonored promise. Every successive holder was left to con 
 jecture when it would be redeemed by the issuer — how far it might 
 be absorbed in the Treasury receipts — whether it could still be 
 paid out to some private creditor — at what loss it could be passed 
 away in new purchases, on a market advancing rapidly and irregu- 
 larly. Everybody was advised that the Federal Government — un- 
 wisely distrusting the intelligence and patriotism of the people — 
 shrank from exercising its borrowing power, supplemented by its 
 taxing power ; that, instead of resorting at once to the whole capi- 
 tal of the country capable of being loaned, which forms a vast fund, 
 perhaps thirty or forty times as large as the then existing currency, 
 it chose to begin by debasing that comparatively insignificant part 
 of circulating credits, creating fictitious prices for the commodities and 
 services for which it was next to exchange its bonds, in an expenditure 
 ten times as large as the whole amount of the legal tenders it ven- 
 tured to put afloat. No man could know how often or how much 
 of legal tenders might be issued, under possible exigencies of the 
 future. It could not be wholly forgotten that such issues, made by 
 our ancestors to sustain the victorious war for national independence, 
 
36 
 
 Governor's Message. 
 
 were never redeemed, while the public loans made for the same 
 purposes were all paid. It was remembered that history affords 
 other warning examples to the same effect. These elements of dis- 
 trust were needlessly invoked. But the system stopped short of the 
 logical completeness of the expedients of the French Convention in 
 1793. While it compelled the existing private creditor, or any body 
 who should grant a new credit, to accept payment in legal tenders, 
 it did not assume to regulate the prices of commodities. The seller, 
 therefore, gradually learned to represent the depreciation of the cur- 
 rency in the price of the article he exchanged for it. As compared 
 with gold, the currency, during all the last year of the war, was 
 depreciated to between forty and titty cents on the dollar, touching 
 at its lowest point thirty-five cents on the dollar. 
 
 HOW IT RAISED PRICES BY PROVOKING SPECULATION. 
 
 It was not alone by the direct effect of the depreciation of the 
 currency that prices were acted upon ; speculation was engendered. 
 Political economy takes little account of the emotional and imagi- 
 native nature of man. In long periods, with numerous instances, 
 the average, deduced as a law, may perhaps discard that element. 
 But in a particular instance, or at a particular time, it is often very 
 potent, and must be estimated in any calculation which aims at 
 accuracy. 
 
 After a period of rest — when the disposition to activity begins 
 to revive — a slight circumstance often excites a speculation that 
 becomes general. The opening of a new market, an apprehended 
 deficiency in the supply of a commodity, any one of a thousand 
 circumstances, may, in a certain state of the public mind, be a 
 spark to kindle a blaze of speculation throughout the commercial 
 world. How much more, then, might it have been expected that 
 such a governmental policy would inspire and inflame the spirit of 
 speculation? The effect was greatest during the process of a new 
 issue of currency, or while it was anticipated. After the issue was 
 completed, there was generally a subsidence, or a reaction. 
 
Governor's Message. 
 
 37 
 
 AND NEEDLESSLY DOUBLED THE BURDEN OF THE WAR. 
 
 The government consumption during the war was mostly of our 
 domestic products. As soon as the channels of traffic could be 
 adapted to the new points of consumption, and the new classes of 
 consumers, there was no more difficulty in the transfer of these 
 products from producers to consumers than in the ordinary opera- 
 tions of commerce during peace. 
 
 Governments, in times of public danger, cannot be expected 
 always to adhere to the maxims of economical science ; the few, 
 who would firmly trust to the wisest policy, will be often overborne 
 by the advocates of popular expedients dictated by general alarm. 
 If the Federal government had paid out treasury notes, not made a 
 legal tender, in its own transactions whenever it was convenient, and 
 redeemed them by the proceeds of loans and taxes on their presen- 
 tation at a central point of commerce, and meanwhile had borrowed 
 at the market rates for its bonds, secured by ample sinking funds, 
 founded on taxation, and had supplemented such loans by all neces- 
 sary taxes, the sacrifices would not have been half that required by 
 the false system adopted, perhaps the cost of the war would not 
 have been half what it became. 
 
 This analysis of the process, by -which the changes in the currency 
 operated to produce the effect on prices witnessed by the people, is 
 necessary, in order to intelligently discuss the problem now pressed 
 upon us. For the fallacy lurks in many minds, that the quantity of 
 the currency, even when it has become stationary and quiescent, 
 creates by its direct action, a state of prices proportionate to that in 
 quantity. 
 
 RELATION OF THE QUANTITY OF CURRENCY TO THE RANGE OF PRICES. 
 
 But this fallacy is confuted by our own experience. The premium 
 on gold fell from 185 in July, 1864, to 29 in May, 1865 ; or rather 
 the currency rose from 35 cents to 77 cents in gold value, while the 
 amount of the currency remained undiminished. The quantity of 
 the currency in the hands of the public — taking the aggregate of 
 the legal tenders and the bank notes, and excluding all of both 
 
38 
 
 Governor's Message. 
 
 which are held by the Treasury or by the banks — is now larger 
 than at any former period. The existence of such a quantity has 
 not arrested the tendency to a general fall of prices. The present 
 inconveniences in business, which it is proposed to remedy by a new 
 issue of currency, have originated and gone on to their maturity, 
 while the currency was being distended to its greatest volume. 
 
 EXCESS OF CURRENCY, YET FALLING PRICES. 
 
 An excess beyond what is capable of being used for the business 
 of society is now, for the first time, distinctly indicated. The move- 
 ment of the crops in the last autumn — which requires something like 
 one-tenth addition to the ordinary amount — created no stringency. 
 The banks have voluntarily withdrawn some millions of their circu- 
 lation. It is probable that the amount capable of being absorbed 
 by the business of the country will continue to fall for a long 
 period. 
 
 WHEN INFLATION CANNOT INFLATE. 
 
 In such a condition of business, of credit, and of the public tem- 
 per, a new issue of currency would not cause a rise of prices, unless 
 it were so excessive as to occasion speculative depreciation, or dis- 
 trust of ultimate redemption. It could not re-animate the dead 
 corpse of exhausted speculation. A period of quiescence must 
 ordinarily precede a renewal of the spirit of adventurous enterprise. 
 
 DISTRESS FROM FALLING VALUES AND LACKING CAPITAL. 
 
 The distress now felt is incident to the continued fall of values, 
 which is the descending part of the cycle through which they must 
 pass after being forced up to an unnatural elevation. The want felt 
 is a want of capital which the party does not own, and has not the 
 credit to borrow ; not a lack of currency. It is caused by invest- 
 ments in enterprises which have turned out to be wholly or partially 
 bad, or which give slower returns than were anticipated — by too 
 much conversion of circulating capital in fixed capital — by exces 
 sive undertakings or engagements, induced by a reliance on a credit 
 that was transient. In a period of falling prices, good property 
 
Governor's Message. 
 
 39 
 
 becomes less convertible. It loses its circulatory quality. It almost 
 ceases to be a resource to obtain money. 
 
 HOW DISTRESS CANNOT BE CURED. 
 
 These inconveniences would not be removed, if the government 
 should put out legal tenders and take in a corresponding amount of 
 bonds, or if a bank should deposit bonds, and receive notes in 
 exchange. Still the individual distressed for the want of capital 
 would have no additional means to buy or borrow these new issues, 
 which the new owner would obtain only by paying for them. A 
 diminution of the government bonds outstanding, is a condition of 
 the increase of legal tenders or bank notes. If an embarrassed per- 
 son could obtain the government bonds surrendered or deposited, 
 he would be as much relieved by his power to dispose of them, as 
 he would by a power to dispose of the legal tenders or bank notes. 
 His difficulty is that he is equally unable to obtain either. He has 
 not the means to buy, or the credit to borrow, them. What he wants 
 is something to make his bad investments good — his slow invest- 
 ments current ; something to make his property convertible — to 
 impart to it a circulating quality, as when there is a general rise of 
 values under a speculative excitement, and everybody is disposed to 
 buy, and every thing finds a ready market, 
 
 INCREASE OF CURRENCY CANNOT CURE DISTRESS. 
 
 He wants something to create in others a disposition to buy, in 
 order that he maybe able to sell. This is what, in the present state 
 of things, an increase of the currency will not do. It would not 
 act mechanically on prices. It does not operate by physical means. 
 It simply influences the minds of men. It induces them to buy, and, 
 in the effort to do so, they bid up prices. It is only when the minds 
 of men are disposed to receive an impulse- toward buying, that such 
 an effect is produced. When speculators go into the market to 
 influence others to buy, in order that they may sell, the conference 
 usually ends in a fall. Even when speculators go into the market 
 to sell on an event expected to cause a rise, the result is commonly 
 a fall. Everybody cannot get out at once, at the expense of others. 
 
40 
 
 Governor's Message. 
 
 CHANGING FORMS AND VARYING VOLUME OF CIRCULATORY CREDITS. 
 
 The amount of currency required by the needs of business is not 
 to be decided by former experience. There is no doubt that, on the 
 first issue of legal tenders, they were largely substituted for other forms 
 of credit. A single case will illustrate : The sudden rise in prices 
 enabled the farmer to become the owner of the floating capital, on 
 which his next year's dealings with the country merchants were to be 
 carried on. The habits of business change to adapt themselves to new 
 conditions. It is possible that the government might cautiously 
 follow the tendencies of trade, and retire each clearly ascertained 
 surplus without doing any harm. But a withdrawal of any consid- 
 erable portion of the amount required at the season of the year 
 which creates the large demand, would produce serious and unneces 
 sary distress. The adoption of a system which should threaten such 
 a result would be very mischievous. The Federal Government is 
 bound to redeem every portion of its issues which the public do not 
 wish to use. Having assumed to monopolize the supply of currency 
 and enacted exclusions against everybody else, it is bound to furnish 
 all which the wants of business require. The case is, as if the gov- 
 ernment should undertake to monopolize the supply of lake pro- 
 pellers or canal boats to bring grain to market. If it should not 
 furnish enough, the derangement of business and the distress of 
 producers and consumers would be intolerable. While securing 
 redemption, the government should organize a system which pas- 
 sively allows the volume of circulating credits to ebb and flow, 
 according to the ever-changing wants of business. It should imi- 
 tate, as closely as possible, the natural laws of trade which it has 
 superceded by artificial contrivances. 
 
 EASY CONDITIONS OF RESUMING SPECIE PAYMENTS. 
 
 The ability of the Federal Government to resume specie pay- 
 ments, is thus simply a question of its command of resources to pay 
 such portions of the circulating credits it has issued, as the public 
 not wishing to use, may return upon it for redemption. The 
 
Governor's Message. 
 
 41 
 
 amount to be paid cannot be considered large, in comparison with 
 its financial operations. It has the taxing power, and by reducing 
 its expenditure could accumulate an adequate surplus. It has the 
 borrowing power and good credit. It can make permanent loans 
 and pay the treasury notes which are returned for redemption. It 
 can convert them or fund them into interest-bearing securities. In 
 that case, they would cease to be currency, and would take their 
 place among investments like national, state, municipal, railroad, or 
 other corporate bonds, or any of the numerous forms of moneyed 
 securities, of which many thousand millions are held in our country. 
 The circulatory quality, in securities of equal general credit, is 
 chiefly a question of the rate of interest they bear. 
 
 The amount of coin necessary for resumption is, first an adequate 
 reserve to meet the demand for exportation, for which the treasury 
 would become the universal reservoir ; and second, a surplus suffi- 
 cient fully to assure the people that the treasury supply would not 
 be exhausted. The power to command coin as the owner of foreign 
 bills of exchange, or in other forms, would, to a large extent, be 
 equivalent to possessing coin. Beyond such an amount of coin, the 
 question is simply a question of capital. 
 
 The exact time of actual resumption, the process, the specific 
 measures, the discreet preparations — these are business questions 
 to be dealt with, in view of the state of trade and of credit opera- 
 tions in our own country, the course of foreign commerce and the 
 condition of the exchanges with other nations, the currents of the 
 precious metals, and the stocks from which a supply would flow 
 without undue disturbance of the markets of other countries. These 
 are matters of detail, to be studied on the facts and figures. They 
 belong to the domain of practical administrative statesmanship. 
 
 RESUMPTION LESS COSTLY THAN PRESENT IMPOLICY. 
 
 It is quite clear that the problem ought to be worked out, with- 
 out costing the country any thing like such disturbance in its 
 business and industries as the operations of the Federal Govern- 
 ment during the last ten years have repeatedly created. The 
 6 
 
42 
 
 Governor's Message. 
 
 natural causes which affect trade may be foreseen, and all dealers 
 can calculate them with equal advantages in every thing, except 
 their own differences in intelligence and judgment. But the action 
 of an official conducting the largest financial operations in the 
 country, and exercising dominion over the circulatory credits that 
 are part of the machinery by which the mass of private transactions 
 are carried on, cannot but tend to create in all industries, uncertainty, 
 confusion and miscalculation. 
 
 nOW PRESENT IMPOLICY HARASSES ALL BUSINESS MEN. 
 
 It was said, after the revulsion of 1837, that the barometer of the 
 money market of America hung up in the parlor of the Bank of 
 England. The barometer which hangs up in the Treasury Depart- 
 ment at Washington, does not merely indicate conditions and 
 changes of the financial atmosphere; it creates them. Its stormy 
 vicissitudes harass the business of the whole country. 
 
 The partial cessation of productive industries and the partial 
 want of employment which now exists, are chiefly produced by the 
 fear of the employers that if they carry on their works, they may 
 produce at a loss. The abstinence from purchase by all those 
 classes of dealers, who buy and get up stocks to provide for 
 future consumption, is chiefly caused by the fear of a further decline 
 of prices. Under these apprehensions, the demand is much less 
 than the ordinary consumption. The instant manufacturers or 
 merchants are convinced that prices have reached the bottom, even 
 for the period of an ordinary business operation, they will begin 
 to resume their function in the economy of trade. The wheels of 
 our complex industries will move, workmen will find employment, 
 and, with revived confidence in the future, prosperity will be 
 renewed in its sources. Nothing could be more unwise, more 
 mischievous in its ultimate results, than to interrupt the healing 
 process of nature, by expedients which will fail of affording any 
 real relief, and will be certain to accumulate new materials for 
 another catastrophe. 
 
 It has seemed to me fit that, on this occasion, the opinions of the 
 great Commonwealth we represent, which is so largely interested 
 
Governor's Message. 
 
 43 
 
 in these questions, should be declared on the side of sound finance, 
 public integrity and national honor ; and, in making this com- 
 munication the medium of an authentic expression on the subject, I 
 follow the example, on similar occasions, of several of the most 
 illustrious of my predecessors. 
 
 RESULTS DURING TEN YEARS OF PEACE. 
 
 It is now almost ten years since the civil war ceased. That 
 period ought to have sufficed to renew our productive industries, to 
 repair the waste of our accumulated capital, and to restore to our 
 people a sound and durable prosperity. But an indispensable con- 
 dition of such results was energy, skill and economy in production, 
 and frugality in public and private consumption. 
 
 MISUSED POWERS OF FEDERAL GOVERNMENT. 
 
 The Federal Government has all the while been the greatest 
 single power in the country to influence results, not only by its own 
 vast fiscal operations, its dominion over the currency and the busi- 
 ness of banking, and the effect of its transactions on investments of 
 capital, and on the temporary conditions of the money market, but 
 by the ascendancy it acquired during a period of public danger over 
 public opinion and over the conduct of individuals. It is to be 
 deplored that this great capacity for controlling action and for leader- 
 ship has not conducted us to better results. 
 
 The period has been characterized by unsound public finance, an 
 uncertain policy in respect to the currency, a series of speculative 
 excitements tending to unproductive enterprises and unremunerative 
 investments of capital, and terminating in distressing reactions in 
 credit and business ; a want of efficiency and economy in produc- 
 tion, extravagance in public and private expenditure, enormous taxa- 
 tion and complicated systems of revenue — which have increased 
 the cost and wasted the fruits of that taxation and rendered capital 
 and labor less productive — and frequent spoliation of private and 
 public trusts. 
 
•M 
 
 Governor's Message. 
 
 GOVERNMENTS TOO COSTLY. 
 
 In the decade beginning July 1, 1865, the people will have paid 
 in taxes, computed in currency, seven thousand millions of dollars. 
 Three-fifths were for the use of the Federal Government, and two- 
 fifths for the State and municipal governments. It is doubtless true 
 that some portions of the municipal expenditures were for objects 
 not strictly governmental. But it cannot be questioned that much 
 too large a portion of the whole net earnings of industry, and of 
 the whole net income of society, is taken for the purpose of carrying 
 on government in this country. The burden could more easily be 
 borne when values were high, and were ascending. As they recede 
 toward their former level, the taxes consume a larger quantity of 
 the products which have to be sold in order to pay them. They 
 weigh with a constantly increasing severity upon all business and 
 upon all classes. They shrivel up more and more the earnings of 
 labor. This condition of things ought to admonish us, in oui 
 respective spheres, to be as abstinent as possible in appropriations 
 for public expenditures. If the cost of government in our country ^ 
 were reduced, as it ought to be, one-third, it would still be larger 
 than a few years ago, taking account of the prices of the products, 
 which, in order to pay that cost, we are compelled to convert into 
 money. 
 
 TAXATION TOO BURDENSOME THE PROSTRATION OF THE SOUTH. 
 
 The people are less able to bear such taxation by reason of the 
 want of efficiency and economy in production, and the want of 
 frugality in consumption, generated by the causes already indicated, 
 and also by reason of the failure to completely renew the produc- 
 tive energies and activities of the States of the South, which fur- 
 nish about half of the exportable commodities of the country, 
 other than specie ; which are large consumers of our manufactures 
 and productions, and which make us their carriers, merchants and 
 bankers in all their domestic and foreign transactions. 
 
 It has been proudly ascribed to the humanity of our age that, 
 since the surrender at Appomatox, not one life has been sacrificed 
 
Governor's Message. 
 
 45 
 
 to the policy of the victorious government. It is to be wished that 
 we were equally free from the criticisms that the retribution visited 
 upon our former adversaries merely conforms to the higher modern 
 estimate of property, as compared with life ; that exercising amoral 
 coercion, invigorated by a standing menace of military force, we 
 have held those communities bound in writhes, to be plundered by 
 rulers destitute of support in their public opinion, and without title 
 to our own respect or trust. 
 
 FINAL ACCEPTANCE OF AMENDMENTS TO FEDERAL CONSTITUTION. 
 
 Such has been our course, after and in spite of the fact that these 
 our kindred, in a common ancestry, a common heritage and a com- 
 mon future, had joined at national conventions in the nomination 
 of candidates and in the declaration of principles and purposes, 
 which form an authentic acceptance of the results of the war, em- 
 bodied in the last three amendments to the organic law of the Fed- 
 eral Union, and that they had by the suffrages of all their voters, at 
 the last national election, completed the proof that now they only 
 seek to share with us and to maintain the common rights of Ameri- 
 can local self-government, in a fraternal union, under the old flag 
 with " one Constitution and one destiny." 
 
 There should be no misunderstanding as to this position of our 
 Southern brethren, or of any portion of our fellow-citizens. The 
 questions settled by the war are never to be re-opened. 
 
 The adoption of the XHIth, XlVth, and XVth amendments 
 to the Federal Constitution closed one great era in our politics. It 
 marked the end forever of the system of human slavery, and of the 
 struggles that grew out of that system. These amendments have 
 been conclusively adopted, and they have been accepted in good 
 faith by all political organizations, and the people of all sections. 
 They close the chapter, they are and must be final ; all parties here- 
 after must accept and stand upon them, and henceforth our polities 
 are to turn upon questions of the present and the future, not upon 
 those of the settled and final Past. 
 
46 
 
 Governor's Message. 
 
 THE PEOPLE MUST AGAIN ATTEND TO PUBLIC AFFAIRS. 
 
 The nobler motives of humanity concur with our interests in 
 making us hail, with heartfelt congratulations, a real and durable 
 peace, between populations unnaturally estranged. The time is 
 ripe to discard all memories of buried strifes, except as a warning 
 against their renewal ; to join altogether to build anew the solid 
 foundations of American self-government. For nearly a generation, 
 the controversies, which led to fratricidal conflict, have drawn awny 
 the attention of the people from the questions of administration, 
 which involve every interest and duty of good government. The 
 culture, the training and the practice of our people in the ordinary 
 conduct of public affairs, have been falling into disuse. Meanwhile 
 the primitive simplicity of institutions and of society, in which 
 government was little felt, and could be neglected with comparative 
 impunity, has been passing away. If public necessities must wring 
 so much from the earnings of individuals, taxation must become 
 scientific. In our new condition all the problems of administration 
 have become more diincult. They call for more intellect and more 
 knowledge of the experience of other countries. They need to 
 become the engrossing theme of the public thought in the discus- 
 sions of the press and in the competition of parties, which is the 
 process of free institutions. The people must once more give their 
 minds to questions that concern the ordinary conduct of govern- 
 ment, if they would have our country to start afresh in a career 
 of prosperty and renown. 
 
 SAMUEL J. TILDEN. 
 
APPENDIX. 
 
 BANKS. 
 
 On the first day of October last, eighty-one banks were doing busi- 
 ness under the laws of this State. During the fiscal year then ended, 
 five banks were organized, and four were closed, one of which failed. 
 Of the five banks created, three were organized with less than one 
 hundred thousand dollars of capital each, under chapter 126 of the 
 Laws of 1874. 
 
 Circulating notes to the amount of $6,368, were destroj^ed by the 
 Bank Department during the year. Sixty-seven banks were cred- 
 ited with lost circulation, to the amount, in all, of $285,559 the time 
 for redeeming the same, after the usual legal notice, having expired. 
 The amount of circulation outstanding, including that of incorpo- 
 rated banks, banking associations, and individual bankers, was, on 
 the first day of October last, $1,105,189.50. Of this amount, the 
 sum of $367,438 was secured by deposits of cash, stocks, or bonds 
 and mortgages. The residue, $737,751.50 is not secured, it having 
 been isued prior to the passage of the general banking law. Steps 
 have been taken by twelve banks for the fiscal redemption of $160,- 
 301 of these unsecured notes, in accordance with the provisions of 
 chapter 585 of the laws of 1873. 
 
 SAVINGS BANKS. 
 
 One hundred and fifty-six savings banks (two of which were 
 closing), reported to the Bank Department on the first day of July 
 last. Their assets, in the aggregate, amounted to $316,122,790, 
 having increased during the year then ended $1,367,020. The 
 increase in assets during the first six months of 1874 was $8,553,060. 
 The number of persons having deposits in these institutions was. 
 
48 
 
 Governor's Message. 
 
 according to the number of open accounts January 1, 1874, $Sj9,472, 
 being an increase of 16,830, during the year. 
 
 TRUST, LOAN AND INDEMNITY COMPANIES. 
 
 On the first day of July last, twelve trust, loan and indemnity 
 companies reported to the Bank Department, under chapter 324 of 
 the laws of 1874. The aggregate of capital paid in, as shown by 
 their reports, was $11,752,040, and the amount due to their deposi- 
 tors was $38,479,764. 
 
 INSURANCE DEPARTMENT. 
 
 The number of insurance companies, subject to the supervision 
 of the Insurance Department, on the first day of December, 1874, 
 was 2S2, as follows : 
 
 New York Joint Stock Fire Insurance Companies 102 
 
 New York Mutual Fire Insurance Companies 8 
 
 New York Marine Insurance Companies 9 
 
 New York Life Insurance Companies 20 
 
 New York Plate Glass Insurance Company 1 
 
 Fire Insurance Companies ol other States 87 
 
 Marine Insurance Companies of other States 1 
 
 Life Insurance Companies of other States 27 
 
 Casualty Insurance Companies of other States 4 
 
 Canadian Fire Insurance Companies 3 
 
 Foreign Fire Insurance Companies 11 
 
 Foreign Marine Insurance Companies 3 
 
 Total 282 
 
 The total amount of stocks and mortgages held by the Insurance 
 Department for the protection of policy holders of Life and Casu- 
 alty Insurance Companies of this State, and of foreign insurance 
 companies doing business within it, was §10,404,593, as follows : 
 
Governor's Message. 49 
 
 For protection of policy holders generally, in 
 Life Insurance Companies of this State S3, 689, S91 00 
 
 For protection of registered policy holders exclu- 
 sively 3, 250, 842 00 
 
 For protection of casualty policy holders exclu- 
 sively 1,000 00 
 
 For the protection of plate glass policy holders 
 exclusively 50, 000 00 
 
 For protection of fire policy holders in Insurance 
 
 Companies of other States 40, 000 00 
 
 For protection of fire policy holders in Insurance 
 
 Companies of Canada 600, 120 00 
 
 For protection of fire policy holders in foreign 
 
 Insurance Companies 2, 473, 100 00 
 
 For protection of life policy holders in foreign 
 
 Insurance Companies 300, 000 00 
 
 Total deposit $10, 404, 953 00 
 
 QUARANTINE. 
 
 During the past year, fifty-seven vessels arrived at the port of 
 is ew York, in which, during the passage, or while in port, sickness 
 had occurred, rendering them subject to quarantine detention 
 Eight vessels had eleven cases of small-pox on board, from which 
 3,228 persons had been exposed to the disease ; one hundred and 
 twenty-one cases of yellow fever occurred on forty-four vessels 
 bound for New York, and twelve patients with this disease reached 
 the port, and were cared for at the Dix Island Hospital, of whom 
 two died ; and five cases of ship fever were removed by the health 
 officer to the hospital. No cases of cholera occurred in the port, 
 but several vessels arrived from ports infected with this disease, on 
 three of which coming from India, deaths from cholera occurred 
 during the passage. No new disease called for any action by the 
 health officer. 
 
 During the year, an epidemic of malignant yellow fever raged 
 in Havana with unprecedented violence, and prevailed in Rio 
 Janeiro and in twelve other South American and West Indian ports, 
 and also in Pensacola and some other Southern ports of the United 
 
50 
 
 Governor's Message. 
 
 States, having extensive and direct communication with New York 
 In Havana, the deaths from yellow fever reached the enormous ex- 
 tent of eighty per cent of the persons attacked, and, in some cases, 
 vessels lying in that harbor during the summer lost all their crews 
 except one or two. It is worthy of notice, that while in previous 
 years nearly nine-tenths of all cases of yellow fever came from the 
 port of Havana, so small a number reached here during the present 
 year. This result, in the opinion of the health officer, is largely 
 due to the sanitary precautions taken by the officers of the vessels, 
 most of whom, being connected with regular lines, are becoming 
 familiar with the quarantine regulations of the port, and with the 
 rigid, though reasonable, restrictions to which vessels having infec- 
 tious diseases on board are subjected. 
 
 During the quarantine season, 1,135 vessels arrived at quarantine 
 from suspected ports ; of these, 236 were from ports known to be 
 infected, and were detained ; and 68 were required to discharge 
 their cargoes on lighters in the stream before going to the city. 
 
 EMIGRATION. 
 
 The following table shows the statistics of emigration for the last 
 fifteen years : 
 
 
 
 
 
 
 a 
 
 
 
 
 _o 
 
 ■•a 
 ed 
 
 niv 
 
 :- J 1 
 C w ;£ 
 
 
 «3 
 3 
 
 cS 
 
 U 03 — -A 
 
 3-g § s 
 
 e 
 
 © 
 
 £ © 
 
 liens 
 
 "2 ■ Z. ■ 
 
 
 o 
 
 < 
 
 £ u ' 
 
 1860... 
 
 $2 00-100 
 
 105, 162 
 
 4,729 
 
 1861... 
 
 do 
 
 65,529 
 
 5,079 
 
 1862.. 
 
 do 
 
 76,306 
 
 3,247 
 
 1863... 
 
 do 
 
 156,844 
 
 4,911 
 
 1864... 
 
 do 
 
 182,916 
 
 7,363 
 
 1865... 
 
 do 
 
 196,352 
 
 7,425 
 
 1866... 
 
 do 
 
 233,418 
 
 10,306 
 
 1867... 
 
 2 50-100 
 
 242,731 
 
 13,237 
 
 1868... 
 
 do 
 
 213,686 
 
 14,250 
 
 1869... 
 
 do 
 
 258,989 
 
 13,911 
 
 1870... 
 
 do 
 
 212, 170 
 
 16, 601 
 
 1871... 
 
 1 50-100 
 
 229,639 
 
 14,369 
 
 1872... 
 
 do 
 
 294,581 
 
 15,818 
 
 1873... 
 
 do 
 
 266,818 
 
 12,942 
 
 1874*.. 
 
 do 
 
 135,323 
 
 6,300 
 
 Totals 
 
 
 2, 870,464 
 
 150,488 
 
 
 $289,467 92 
 175,434 56 I 
 174,454 29 | 
 341,027 00 i 
 420.366 17 
 471,034 85 
 532,048 20 
 583,154 40 
 577,349 36 
 695,499 59 
 566, 119 26 
 421,957 40 
 457,011 70 
 415.063 28 
 214,631 34 
 
 £ 
 Z 5 
 
 - - 
 
 $217,717 53 
 178,401 77 
 138,501 56 
 168,155 71 
 373,763 39 
 447,580 20 
 545,983 21 
 538,577 22 
 662,9.58 12 
 606,158 58 
 605,544 24 
 605,904 17 
 598,793 78 
 466, 108 22 
 299,035 14 
 
 •- © _ j 
 
 Z r. Z z £ ~ ~ - 
 
 '- © 
 
 $1:32,4.50 00 
 199,559 67 
 193,937 06 
 133,695 17 
 125,769 74 
 96.852 13 
 54,784 98 
 96,419 47 
 129,765 07 
 61, 188 46 
 22, 129 45 
 
 $6,334,619 32 $6,445,205 84 $1,246,551 20 
 
 o % /. .= — 
 
 $58, 869 OS 
 19,855 93 
 16,016 06 
 15, 792 22 
 19,349 71 
 14.320 74 
 52, 940 24 
 33,945 87 
 
 +101, 737 20 
 48,846 66 
 51,681 15 
 39,829 58 
 51,556 81 
 32,678 24 
 
 $557,419 49 
 
 * For eleven months. 
 
 + This sum included back claims. 
 
Governor's Message. 
 
 51 
 
 PRESENT FINANCIAL CONDITION OF THE COMMISSION. 
 
 The indebtedness of the Board is as follows : 
 Due the Equitable Life Assurance Society, amount 
 borrowed on bond and mortgage of the lands at 
 
 Ward's Island $100,000 00 
 
 Due the counties and charitable institutions of the 
 State, for the care and support of emigrants during 
 the past one and one-half years 75, 000 00 
 
 Due for current expenses at Castle Garden 16, 000 00 
 
 Estimated expenses of the Castle Gar- 
 den and Ward's Island establishments 
 
 for the month of December (includ- 
 ing $10,000 due for coal) $30, 000 00 
 
 Less cash on hand and estimated re- 
 ceipts 20, 000 00 
 
 $10, 000 00 
 
 Total estimated indebtedness December 31, 1874 . . $201, 000 00 
 
 The number of emigrants at present cared for at Castle Garden 
 and Ward's Island is 1,041, and in the counties about 900. During 
 the months of January and February, the number to be cared for 
 at Ward's Island will increase to about 2,000, and in the coun 
 ties to more than 1,200. On the first of January next the commis- 
 sioners will practically be without funds to care for these persons. 
 The expenses of the Ward's Island and Castle Garden institutions 
 will, during the months of J anuary and February, be about $25,000 
 per month, while the receipts will not exceed $5,000 per month. 
 
 COMMON SCHOOLS. 
 
 The statistics of the common schools for the year ending Septem- 
 ber, 30, 1874, are as follows : 
 
 Total receipts, including balance on hand Sep- 
 tember 30, 1873 $11, 944, 023 38 
 
 Total expenditures 10,779,779 61 
 
 Amount paid for teachers' wages 7, 559, 090 59 
 
52 
 
 GovEBtfOB's Message. 
 
 Amount paid for school-houses, repairs, furni- 
 ture, etc $1,721, 2S2. 64 
 
 Estimated value of 6chool-houses and sites 28, 714, 738 00 
 
 Total number of school-houses 11, 775 
 
 Number of school districts, exclusive of cities 11, 299 
 
 Number of teachers employed at the same time for 
 
 the full legal term of school 18, 554 
 
 Number of teachers employed during any portion 
 
 of the year 29, 683 
 
 umber of children attending public schools 1, 039, 097 
 
 Number of persons attending normal schools 6, 568 
 
 Number of children of school age in private schools. . 138, 610 
 
 Number of volumes in school district libraries 835, 882 
 
 Number of persons in the State between 5 and 21 
 
 years of age 1, 501, 874 
 
 COLLEGES AND ACADEMIES. 
 
 The condition of the colleges and academies, subject to the visi- 
 tation of the Regents of the University, is very satisfactory. 
 
 There are within the State, 22 literary colleges, 10 medical col- 
 leges, and 240 academies and academical departments of union 
 schools. With several of the colleges included in this enumeration, 
 are connected special schools of law, of medicine, and of other 
 branches of science. By the wise liberality of individual citizens, 
 the endowments and appliances of several of these institutions have, 
 during the last year, been largely increased, and their means of use- 
 fulness greatly extended. The number of scholars in attendance 
 upon the academies has increased, and the standard of scholarship 
 has, upon the whole, considerably advanced. These institutions, 
 while they prepare students for admission to the colleges, are also 
 designed to fit another class for immediate entrance upon the 
 practical duties of life, and, thus complementing the work of the 
 common scheols, form an important part of the educational institu- 
 tions of the State. 
 
 STATE LIBRARY AND MUSEUM. 
 
 The State Library, in both its departments, has been enlarged by 
 the application of all the means at the disposal of the Trustees. In 
 
Governor's Message. 
 
 53 
 
 the extent and value of its contents, it is a source of just pride to 
 the people of the State. The law library numbers about 26,000 
 volumes, and the general library about 68,000, including many 
 rare and valuable works. 
 
 The State Museum of Natural History, under the management of - 
 its able curator, Prof. Hall, is reported to be in excellent condition, 
 and exhibits the productions of the State, in a manner to afford to 
 the student of natural science most valuable aid in his studies. 
 
 THE NATIONAL GUARD. 
 
 The National Guard consists of eight divisions, containing nine- 
 teen brigades, composed of one regiment and nine separate troops 
 of cavalry, one battalion and ten batteries of artillery, thirty regi- 
 ments and thirteen battalions of infantry. Total officers, non-com- 
 missioned officers, musicians and privates (three brigades estimated), 
 twenty thousand live hundred and thirty-two (20,532). 
 
 SOLDIERS OF WAR OF 1812. 
 
 The last Legislature made an additional appropriation of one hun- 
 dred thousand dollars ($100,000), for redeeming certain certificates 
 issued to soldiers of the war of 1812. 
 
 The former appropriation paid on the certificates allowed 
 $91.52^ on $100 of principal. 
 
 The appropriation of 1874 paid the balance due on the principal, 
 and $46.72 on $100 of interest. 
 
 WAR CLAIMS AGAINST THE UNITED STATES. 
 
 On the 1st day of January, 1874, the unsettled balance in favor 
 of the State was $1,209,286.11. Since that time another install- 
 ment of over $34,000 has been presented to the Treasury Depart- 
 ment. In the unsettled balance above stated is included a claim for 
 $131,188.02, interest on Comptroller's bonds, which cannot be paid 
 without legislative action. 
 
54 
 
 Governor's Message. 
 
 SALT SPRINGS. 
 
 The quantity of salt from the Onondaga Salt Springs, inspected 
 during the last fiscal year, was 6,594,191 bushels, less by 1,304,981 
 bushels than the production of the preceding year. The net reve- 
 nue from this source was $10,341.07, showing a falling off, as com- 
 pared with the preceding year, of $11,424.08. 
 
 STATE PRISONS. 
 
 The following statement shows the expenditures and earnings of 
 each of the prisons, for the year ending September 30, 1874 : 
 
 Advances from Received from Excess of Ex- 
 
 the Treasury. Earnings. penditures. 
 
 Auburn $233,105 90 $101,910 40 $131,256 50 
 
 Clinton 337,078 12 153,473 00 184,204 52 
 
 Sing Sing 300,054 58 124,009 43 230,045 15 
 
 Miscellaneous* 37,031 25 
 
 $930,899 60 $379,393 43 $588,537 42 
 
 In 1867, the excess of advances from the Treasury 
 
 over receipts from earnings, was $300,874 79 
 
 In 1808, it was 512,547 74 
 
 In 1809, it was 595,774 45 
 
 In 1870, it was 401,304 99 
 
 In. 1871, it was 470,309 23 
 
 In 1872, it was 405,881 84 
 
 In 1873, it was 597,289 00 
 
 In 1874, it was 588,537 42 
 
 The number of convicts in each of the prisons, September 30, 
 1874, was as follows : 
 
 Auburn 1,202 
 
 Clinton 552 
 
 Sing Sing 1,300 
 
 3,000 
 
 Total, September 30, 1873 3,025 
 
 * Miscellaneous expenditures, not distributed, including $26,231.25 for transportation of 
 convicts. 
 
E 
 
I