An enlightened popular government cannot fail to discover the advantages of such works, and is well fitted to prosecute them judiciously. As the people contribute the means for their construction, they will not fail to discover the proper period for commencing them, and the extent to which they should be carried. The successful experiment which has already been made, while it has shed glory upon the state, affords a stimulus for the prosecution of similar enter. prise; and it is not surprising, that some parts of the state, supposed to be peculiarly adapted by nature to receive these helps from art, should exhibit an impatience for their immediate commencement. But any disposition that may be manifested to enter prematurely upon the prosecution of these works, will be restrained by the cooler judgment of those parts of the state, which are called upon to contribute to the expense, but which participate indirectly only in their advantages.

In determining upon the expediency of beginning any new work, it will be proper to consider its public benefits, its probable returns of revenue, and the means of the state. If the state possesses funds for the object, without imposing any burdens upon the people, it will be sufficient to look at its bearings upon the public prosperity, without reference to revenue. If the state should not be in that condition, then it is necessary, preliminarily to ascertain, with considerable exactness, that it will contribute, in tolls, sufficient to pay for necessary repairs and attendance, the interest of the debt to be created on its account, and, within a reasonable time, the principal. If it will not do this, then your duty requires you to determine whether the people will consent to be taxed to make up the deficiency of its revenue, and if so, to impose such tax, contemporaneously with the act authorising its construction.

Acting under a due sense of the importance of these precautionary considerations, I do not doubt, that your measures will satisfy the reasonable desire of the public to continue the march of internal improvement.

The Erie canal passes through the centre of the state, uniting the tide waters of the Hudson, with lake Erie, and affords the means of an easy interchange of commodities between the different parts of the state, and an opening to our great commercial city, for the trade of the Canadas and the states bordering upon the upper lakes. By means of smaller works, completed and in progress, we have con[S. No. 1.]

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nected its advantages with the navigation of the Ontario, Champlain, Onondaga, Cayuga, Seneca and Crooked lakes, and the western branch of the Susquehannah river. Having thus, since the year 1817, opened communications between all our cities, and nearly all our interior navigable waters, we cannot take to ourselves the reproach that the march of internal improvement has been slow, or harbor the thought that its further progress is to be arrested.

The Erie and Champlain canals were projected with great wisdom, and at their commencement, an appropriation was made for them from the general fund, which has been sufficient, at all times, to pay the interest of the monies borrowed. The credit of the state was thereby so firmly established, that for all the later loans, to more than half the whole amount, capitalists were induced to pay a premium upon five per cent. stock. Those canals have drawn from the funds of the state, to the amount only of the duties upon salt, and sales at auction; and their successful operation promises, that they will speedily pay their debt, provided the constitutional protection of their fund is duly respected. When that period arrives, the revenues from salt and auction duties, and tolls of the Erie and Champlain canals, will be under the exclusive control of the legislature. How far it will then be deemed public justice or good policy to reduce the amount of the tolls, or to continue them for the purpose of extending our works of internal improvement, will depend entirely upon the future representatives of the people.

In reference to the subject of revenue and internal improvements, I submitted to the consideration of the last legislature, the propriety of taking measures to procure a distribution of the surplus revenue of the United States. The same suggestion was made by the President to congress, in his first message, and has been renewed by him in his late communication to that body. I find also that one of my most distinguished predecessors alluded to the same subject in his message in 1827. I esteem it of sufficient importance to renew the suggestion, and press it earnestly upon your consideration. We have the fullest assurance, that the President will steadily adhere to his doctrines regarding the power of congress over roads and canals, so that the payment of the national debt, except the three per cents, will be provided for within three years.

At the adoption of the federal constitution, it was deemed proper to place all the revenues derived from customs, at the disposal of the

general government. Inasmuch as that government assumed the payment of the public debt, and was charged with our foreign relations, the protection of commerce, and the military and naval defence of the country, it certainly was a wise and equitable disposition of that great source of revenue: Yet, thereby, the individual states are deprived of those ready means of supplying their wants by indirect taxation, upon which every nation mainly relies; and those states which have no demesnes, or other public funds, are constrained to raise revenue by a direct tax. This latter kind of taxation is, from the nature of it, unequal, and draws more than a due proportion from the farmer. During the last forty years, we have passed through all the vicissitudes to which our government is exposed; and experience has shewn, that without burdening commerce, the means of revenue placed at the disposal of congress, will yield much more than can be required to administer the government in peace, or to recover from extraordinary demands upon the treasury during war. As proof of this, the government has expended, on questionable authority, large sums of money for internal improvements; while it has continued to pay more than ten millions of dollars annually towards reducing the public debt. There is, therefore, abundant reason to believe, that a portion of the revenue from customs may, without inconvenience, be permanently appropriated, and restored to the several states, in such a manner as not to interfere with the necessary paramount control over their collection by the national authorities.

It is, without doubt, the most just and economical mode of collecting taxes. It is done by fewer officers, and without that offensive inquisition into the affairs of individuals, which is an indispensable concomitant of direct internal taxation. By this mode, each individual fixes the amount of tax upon himself, and pays in proportion to his means, by the consumption of those articles of foreign production upon which the duties are levied.

It is, at least, questionable, whether there are not sound objec tions to a mere distribution of the surplus revenues. Among these may be reckoned the uncertainty of the amount, which changes in the tariff rates may occasion; and the withholding of dividends entirely, in national emergencies, demanding extraordinary expenditures. The contingent nature of the supply might prevent the States from engaging in enterprises of magnitude, or produce em

barrassments should they be undertaken. This might be remedied by providing that a fixed sum shall be annually distributed. The amount of that sum might be such as not to interfere with the reduction of the present tariff of duties, should the public interest at any time require it. Population is obviously the true basis for distribution, inasmuch as the money would by that rule return to those who contributed it. Our State contains more than a seventh of the population of the Union, and our proportion of seven millions, would be an annual quota of one million. But if three millions five hundred thousand dollars only should be distributed, our proportion would be the interest at five per cent. of ten millions of dollars, and would support our credit for internal improvements to a large amount. This sum would be an indirect tax of twenty-five cents upon each individual in the state, paid by those who consume foreign productions.

I am aware, that in recommending, as I earnestly do, a cautious policy with regard to public expenditures, I point you to a path that leads rather to useful results, than to personal glory; but all of us must be deeply impressed with the truth, that a democratic government can be sustained only by public virtue. The patriot will discard all selfish considerations, and in the execution of his trusts, will suffer the happiness and prosperity of his country to take entire possession of his heart. It is a paramount duty of all the functionaries of the government, to keep the people advised of every thing which affects their interests; and on all occasions to endeavor to infuse a spirit of public morality. That species of legislation which is the result of an alliance between private interests and the excited feelings of the community, bearing with it the co-operation of the timid, and reaching by indirection a common object, is immoral, dangerous, and may ultimately bring ruin upon the country. Those who have designs either of private interest or ambition, will strive to keep the public eye fixed in another direction, while they march to the accomplishment of their purposes unobserved. I am persuaded, that if we are destined to be ruined by legislation, it will not be by means of the comparatively trivial sums which may be supposed necessary to defray the ordinary expenses; not even by the wasteful expenditure of accumulated treasures; but by the allurements of the glory of splendid undertakings, and the legislative power over public credit.

The canal debt amounted on the first day of January instant, to $7,825,035, composed of the following items:

Erie and Champlain canal stock, payable 1837, 6 per

The tolls received upon the Erie and Champlain canals during the

past year, will amount to about the sum of.......... $1,027,327 The receipts from auction duties for the year ending

30th Sept. last,. . . . . .

From salt duties till 31st October last,........

From other sources,

180,513

154,332

40,403

Making the proceeds of canal revenue for the year, $1,402,575 Of this sum there has been expended by the commissioners, superintendents, collectors and other canal officers,

about......

..$249,056

For interest of debt,....

379,695

628,751

Leaving of the receipts of the last year to be applied towards the payment of the Erie and Champlain canal debt,..

$773,824

The sum accumulated from receipts of former years amounts to

878,176

Making the sum applicable to the extinguishment of the principal of that debt,

$1,652,000

Cayuga and Seneca Canal.

The expenses of superintendence and collection for the last year, with the expenditures of the canal commissioners, as far as can now

be ascertained, will amount to about......

For interest upon the debt,....

$13,085

11,860

$24,945