A large proportion of the above balances in the treasury consist of money in the various sinking funds. The amount of receipts into the treasury on account of the General Fund revenue during the year ending September 30, 1876, was.. $11,646,517 63 The payments, including the deficiency of $733,863.77 on the 1st of October, 1875, and also $4,640,849, transferred to the Bounty Debt Sinking Fund, were.. Balance September 30, 1876.... 11,644,982 98 $1,534 65 The balance, although small, is more satisfactory than the large deficits which have almost uniformly appeared for many years past. DEBT. On the 30th of September, 1875, the total funded debt was $28,328,686.40, classified as follows: On the 30th of September, 1876, the total funded debt was $23,315,898.58, classified as follows: General Fund.. Contingent Canal $3,092,238 58 5,000 00 Bounty. Actual reduction of the debt during the year by cancellation.. Deduct money and securities in the sinking funds.... Total amount of debt after applying sinking funds The bounty debt will mature on the seventh day of April next. The sinking fund, together with the one-third mill tax, now in course of collection, will be sufficient for its full payment. The balances in the sinking funds on the 30th September, 1876, including money and securities, were as follows: It must be observed, however, that the amount in the General Fund Debt Sinking Fund cannot all be applied to the payment of that debt, without leaving a large deficiency of means for paying the current expenses of the government. The full amount required for the payment of the debt was contributed from the surplus revenues of the canals, as directed by the Constitution, the last contribution having been received. in 1873. But instead of being applied to that object, it was used to pay other appropriations made by the Legislature, and not otherwise provided for, and has never been fully restored. The debt, therefore, remains uncanceled, and, if ever paid, it must, to a large extent, be paid by taxation. The whole of it except $800,000, due in 1878, and 10 $30,443.76, due on demand is payable at pleasure, and is held by the State as an investment for the various trust funds. In this condition it will of course remain, the interest upon it being paid to the respective funds for which it is held, so long as the Legislature may choose to leave it in that shape. It would be more satisfactory, and in better accord with the Constitution, to have the whole debt extinguished, and the money belonging to the trust funds invested in other securities. It is believed that the $800,000 due in 1878 may be paid from the sinking fund without taxation. CANALS. The report of the Auditor of the Canal Department exhibits in detail the operations, revenues, debts and expenses of all the canals. It will be unnecessary to present here any thing more than a few of the leading and important facts. The gross amount of income from tolls and other sources for the year ending 30th September, 1876, was $1,487,332.89, being $438,662.74 less than in the preceding year. The cost of collection, ordinary repairs and other charges on revenues amounted to $1,149,194.61, being $318,121.34 less than in the preceding year. The Erie canal produced a surplus of revenue over expenses amounting to $508,953.14. The other canals all show small incomes and large deficiencies of revenue as follows: Deficiencies. Gross income. $94,944 55 $83,667 51 29,048 35 27,175 17 11,083 99 14,312 34 2,104 84 7,689 87 3,717 38 4,602 03 11,339 28 23,734 85 14,668 50 8,595 60 30 48 1,562 41 Crooked Lake. The year has been one of unprecedented disaster to the boatmen and to all others engaged in the navigation of the canals. In addition to the great depression in every branch of business, there has been an extraordinary competition between the railway lines extending from the Western States to tide-water, which has diverted trade from the canals, and notwithstanding the very low rates of toll, there has been a large falling off in tonnage as well as revenues. Many boats have been laid up; others have been run at a heavy loss and none of them appear to have made any profits. The effective measures of reform which have been enforced within the last two years, arresting mismanagement and fraud and reducing expenses, have saved the canals from total ruin. Small as the income is, the expenses have been reduced below it, and yet the canals have been kept in complete repair during the entire season. Their future success, if they are to have any, must depend upon a faithful perseverance in this policy. The question of high or low tolls in the present condition and prospects of canal transportation is one about which there would seem to be no ground for any difference of opinion. Under the Constitution, as now amended, no more money can be expended on the canals in any one year than the gross amount of their revenues for the preceding year. It is, therefore, indispensable for the forwarders to pay such tolls as are required to keep the canals in running order; and no one can reasonably ask them to pay any more, when they are making losses instead of profits on every cargo which they carry. It is true the Constitution requires the canal debt to be provided for from the surplus canal revenues, but no law can enforce impossibilities. It is to be hoped that the depression in trade will not be of long continuance, and that prosperity may soon return to the canals. It is believed that the railways cannot continue permanently their unreasonable competition without involving themselves in ruin. When such a change shall take place that forwarders can again realize a fair income from their business, they will, of course, be required to pay such tolls as will provide for the canal debt. Until that time it must inevitably be a charge upon the tax-payers of the State. With the usual amount of freight, at fair prices, the present rates of toll will doubtless be sufficient for all purposes, and with continued economy in expenses, they may probably be still further reduced. Since the close of navigation the railway companies have agreed upon an increase of freights; but the past history of such agreements leaves it uncertain whether this one will be of long duration. It is perhaps unnecessary to add that any expenditures, under present circumstances, for enlargements or extraordinary repairs, should not receive encouragement from any source. Those who have suffered most severely by the loss of business upon the canals are the boatmen, and although it may not be in the power of the Legislature to relieve them, it is impossible to withhold from them our sympathy. The number of their boats is about 6,000. They are in one sense the partners of the State. They do the work which produces the revenue to keep the canals in repair. Their labor is severe, and their exposure great. In many instances their families live upon the boats, in order to reduce their expenses to the lowest point. No part of the plunder which others have received has ever gone to them; on the contrary, they have suffered from it by paying tolls which have been misapplied. But with all their labor and economy they have been unable during the past season to pay expenses. If any relief can be extended to them in the present depressed condition of trade, it must come from a further saving in the cost of maintaining the canals, and a consequent further reduction in tolls. Even this will not probably be sufficient to carry them safely through another season of such competition as they have encountered during the last year. THE LATERAL CANALS. Whether any further appropriations should be made on account of such lateral canals as the Legislature has a right to dispose of, can be best determined after receiving the report of the commissioners appointed by an act of the last session, to examine that subject. It will be seen by the results of the year's business given above, that those canals are rapidly disposing of themselves, and have already become of little value, even to the people living near them. I learn from the commissioners that they have made the inspection and examination required by the act appointing them, and will soon be prepared to report. The act fixed their compensation, and directed its payment, together with their expenses, but made no appropriation, and they have not been paid. The necessary appropriation should be made. STATE PRISONS. The State prisons have kept on their way from bad to worse. The number of convicts in the three prisons September 30, 1876, was as follows: The excess of advances from the treasury over receipts from earnings was $704,379.85. This deficiency is larger by more than $100,000 than was ever before known. It is due to the present inspectors to state that they claim the increased deficiency to be largely owing to incumbrances which fell upon them from their predecessors. A commission was appointed by an act of the Legislature of 1876 to make a thorough investigation of the affairs of the prisons. The commissioners have been actively engaged in the service during the whole summer and autumn. Their report will very soon be submitted to the Legislature, and will, I presume, cover the whole ground of prison management, discipline and maintenance. I commend it to the attention of the Legislature, without further comment at this time. use. STATE REFORMATORY AT ELMIRA. It is gratifying to be able to announce to the Legislature that a large portion of the Reformatory building has been finished and brought into With a reasonable appropriation, the entire structure will be completed within the present year. The board of managers, appointed by chapter 207, Laws of 1876, organized in accordance with the act, and succeeded in securing the services of a very competent and efficient superintendent. Having completed and furnished the south wing, they received 170 convicts from the Auburn and Sing Sing prisons, who were immediately put at work upon the north wing, the prison wall and workshops, which have been advanced rapidly towards completion. The superintendent estimates that with an appropriation of $185,000, and with the privilege of using the prisoners without the interference of contractors, he can fully complete and furnish and bring into use all the buildings, including the prison wall, within the year, and support 300 convicts during the progress of the work, and that then, with possibly a small appropriation for maintenance in 1878, the Reformatory will cease to be a burden upon the State treasury. He is confident that it can be made entirely self-sustaining. In 1874, the Governor in his annual message estimated the whole cost of the buildings at $2,000,000. Assuming the above estimate of the superintendent to be correct, they will be completed for a little more than one-half of that sum. But for the ambitious style of architecture adopted at the outset, the cost would have been much less than $1,000,000. The design of the Reformatory was the reformation, as well as punishment, of young convicts who had not become hardened in crime. With this object in view it was originally enacted that no conviets should be sentenced to it except such as were over sixteen and under thirty years of age, and convicted of a first offense. It is a source of much regret to the friends of the institution that it should have been, even temporarily, diverted from its original purpose; but the crowded condition of the other prisons, and the necessity of relieving them as far and as speedily as possible, led to the use, for the time being, of the Reformatory for that purpose. The managers will require some further legislation to aid them in the discharge of their duties, and to promote the objects of the institution. Their views and recommendations will in due time be laid before you. CONSTITUTIONAL AMENDMENTS. The people of the State, at the last election, adopted by an immense majority, the constitutional amendments which had been approved by two previous Legislatures, and which have thus become a part of the Constitution of the State. They provide for the appointment, by the Governor and Senate, of a Superintendent of State Prisons, with all the powers of the Board of Inspectors, and a Superintendent of Public Works, with all the powers of the Canal Commissioners. A radical change is thus made in the management both of the prisons and of the canals. In each case all power and responsibility are placed in the hands of one controlling executive officer. Wearied with the frauds, the wasteful and extravagant expenditures which so often attend the management of irresponsible boards, the people have determined to make this great change, with the hope of better results. They undoubtedly desire that the amendments be carried into effect as speedily as possible. I recommend, therefore, that an act be passed with as little delay as may be proper, fixing salaries of the respective Superintendents, and also the amount of security to be given by each. A brief act containing these simple provisions will be all that will be necessary before appointing the Superintendents, and enabling them to enter upon their important duties. If further legislation should then be found desirable, either in regard to the canals or the prisons, it could be perfected at the convenience of the Legislature, and with ample time for deliberation. PUBLIC BUILDINGS. One phase of the extravagance and folly, amounting almost to lunacy, caused by an inflated currency and inflated modes of life, developed itself in a passion for costly public buildings. Of these the New Capitol takes the lead. Its cost was originally estimatod at $4,500,000. There have already been expended upon it over $7,500,000, and it will undoubtedly require as much more to complete it; and when completed it will be a vast pile of ornamental stone work, not at all in keeping with the tastes and good sense of plain, substantial people. In addition to this, it is discouraging to contemplate its completion in view of the enormous annual cost of heating, lighting, cleaning and superintending it. structures Following in the wake of the Capitol are several Insane Asylums, the State Reformatory, houses for Normal Schools, High Schools and other buildings upon which millions of the people's money have been wasted. in useless ornaments and luxurious arrangements. In behalf of those which are not yet completed-embracing nearly all of the most costly the usual representation is made that unless we go forward and spend the further amounts required for their completion, we shall lose all that we have expended. Whatever force there may be in this argument, I confess that in the present condition of financial affairs, the actual distress caused in many homes by the payment of their heavy taxes, I should prefer to have the expenditures cease, the tax-payers relieved and the buildings left as they are, at least, until the advent of better times. Fully responding to the demands of humanity in behalf |