for public purposes. The amount of business transacted upon the canals, their general condition, management and supervision, compare favorably with any previous season. Their revenues have been nearly half a million in excess of those of 1867, while their current expenses, for care, superintendence, and ordinary repairs, have been over two hundred thousand dollars less than the annual average for the four preceding years.

It affords me great pleasure to congratulate the Legislature and the people of the State upon the fact that the surplus revenues of the canals for the past fiscal year have been sufficient to pay the balance of the canal debt of 1846, satisfy the other requirements of the Constitution, and contribute over a hundred thousand dollars "to defray the necessary expenses of the government."

The Erie canal, by its geographical position and its physical characteristics, has a special and an important relation to the commerce and business not only of our own State, but of the populous and rapidly growing communities of the great northwest. Connecting the Hudson with the lakes it is an indispensable link in a chain of water communication, which continues to be of great power and value notwithstanding the improvements in the methods of land transportation which are characteristic of our times. This work is a trust for the people of this State, whose enterprise and capital have created it; but it is to be administered in a spirit of liberality toward those great populations whose growth has been fostered by it, and whose welfare it continues to affect. To maintain it in a condition of efficiency, and to improve it in a practical manner, as the necessities of business from time to time demand, is our interest as proprietors, and our policy with reference to the commerce of the State and country. To protect it from embarrassment, arising out of improvident expenditures, ill-considered changes in its structure, or charges upon its revenues, growing out of other undertakings, is an obligation clearly resting upon us. The general plan of its construction and its adaptation to the business for which it was intended, provide a convenient, easy, and an economical means of transportation. The complaints that have arisen, some of which have been made the occasion of demands for fundamental changes in the work, have been provoked mainly by failures in the administration.

The most unnecessary, as well as the most mischievous, of these failures has been the allowing of the water-way of the canal to become narrow at the bottom, and shallow, by neglect to remove the gradual accumulations of earth incident to the use of the work and the lapse of time. The consequences have been that the flow

of water has been obstructed, its supply lessened, especially on the short levels, the movement of the boats retarded, the time of transits lengthened, and the cost of transportation increased. Frequent complaints, of a serious character, have also arisen from the failure to make provision for prompt repairs, for keeping the locks in efficient working order, and for doubling them when necessary. All persons doing business on the canals will agree that these evils have been much less during the navigation season of 1868 than before. During and for some time prior to the season of 1867, they were so serious as to greatly impair the efficiency of the canals and to create very extensive dissatisfaction among all persons engaged in the business of transportation. I do not propose now to speak at length in regard to the specific improvements to the making of which such surplus revenues as the State may have at its command should be applied. Upon this subject I respectfully refer you to the able report of the State Engineer, of which I ask your careful consideration. Besides such general improvements as experience suggests, and the demands of commerce require, it is a constant duty, as well as the best economy, to keep the canals at all times in thorough repair, and in the best and most efficient working condition. It is especially important, that the water-way be restored to its full dimensions, and even be incidentally and progressively enlarged. The considerations which I have submitted are applicable to all the canals in proportion to the extent of their business.

With regard to the present contract system for repairs to the canals, I beg leave to call your attention specially to the following extract from the report of the State Engineer: "The present system of repairs has proved a great disappointment to its early advocates, and as an experiment, has wholly failed in protecting the interests of the State, and in preserving and maintaining our public works. It has proved to be anything but economical to the State, or beneficial to navigation, and its repeal is earnestly desired by all directly interested in the navigation of the canals, and strongly recommended by all the present and retiring canal officials." These views of the State Engineer meet with my full approval, and I unite in his recommendation. In concluding these remarks, I desire to enter my earnest protest against the proposition, which in some quarters has met with favor, that it is the duty of the general government to interest itself in our canals, and ultimately to acquire control of them. Our State has a just pride in its public works, and is quite competent to take care of them. To foster and protect them, to adapt them fully to the public necessities and to the growing demands of the internal

commerce of the country, should be the duty of the Legislative and Executive departments.

SALT SPRINGS.

The Superintendent of the Onondaga Salt Springs reports the quantity of salt inspected during the last fiscal year at eight million seven hundred and ninety-three thousand five hundred and fourteen bushels (8,793,514), being an increase of production over that of the previous fiscal year of two million sixteen thousand four hundred and fifty-four bushels (2,016,454). The amount of revenue received from all sources was eighty-eight thousand and forty-nine dollars and forty-seven cents, ($88,049,47); total expenditures connected with the superintendency of the springs was forty-nine thousand two hundred and thirty-eight dollars ($49,238); the amount of net revenue received by the State being thirty-eight thousand eight hundred and eleven dollars and forty-seven cents ($38,811.47).

STATE PRISONS.

The following facts in regard to the receipts and expenditures of the State prisons are furnished me by the Comptroller :

For the number of inmates of the several prisons. and other details, I respectfully refer you to the reports of the Inspectors, which will be duly presented.

Our prisons have not been for many years self-supporting institutions. I am satisfied they can be better managed, as well in respect to finances as discipline. The prison system of this State abounds in evils and errors. Many of these are, doubtless, due to the fact

that the persons appointed to discharge the duties of agents, wardens and keepers, are too often selected from political considerations only, without reference to their capacity and qualifications. The present contract system for the employment of the labor of the prisoners is an unwise one. It affects very unfavorably the discipline of the institutions, and does not produce satisfactory pecuniary results. The labor of the convicts should be directed and employed entirely by the Prison Superintendents, and the products of such labor should be sold by them for the benefit of the State. This system would remove many existing causes of complaint in regard to convict labor, and result in material advantage to the public.

The law passed some years ago, allowing to convicts, for good behavior, a certain number of days' deduction from their terms of imprisonment, by way of commutation of sentences, has been beneficial in its operation; and if, under a system by which the Superintendent should directly employ the labor of the prisoners, provision should be made that a small portion of their earnings be laid aside for their benefit, to be paid to them on the expiration of their sentence, the effect upon their present conduct and future lives would, I think, be useful alike to them and to society. I cannot in this message enter into detailed statements and suggestions of all that is necessary for prison reform. I commend to your consideration the report of the Prison Association, which, under a resolution of the last Legislature, was directed to investigate the financial administration of the State prisons and the reformatory agencies employed in them.

It is time that the great State of New York, throughout which extends such a grand and liberal system of education and charity, should give to this subject of prison management and reform the attention which its importance demands, and which, hitherto, it has failed to receive.

I commend to your favorable consideration the various houses of refuge and other institutions for the reformation of juvenile delinquents. It is wise economy to aid them, and to provide for their

increase and extension.

I respectfully call your attention to the present practice of detaining witnesses in criminal cases, when unable to give security for their appearance at the trial of the accused. They are generally poor, sometimes strangers temporarily visiting the State and made the victims of crime, often have families dependent upon them, and are kept in prison upon the claim that public necessity requires their actual presence at the trial. It frequently happens that while

the unfortunate witness is in prison, the alleged criminal is at large, on bail. The unnecessary detention of the innocent to convict the guilty is a cruel wrong. I submit whether it cannot be remedied by proper legislation.

INSURANCE.

Inasmuch as the report of the Insurance Department is not due until after the assembling of the Legislature, I am unable to communicate any information in regard to its workings during the past year. I refer you to the report when presented.

BANKS.

The number of financial institutions having relations, more or less intimate with the Banking Department, on September 30, 1868, was four hundred and eighty-eight (488).

Of these, two hundred and forty-eight (248) were banks that had voluntarily taken the final steps to close their banking business under the laws of this State, by providing for the redemption of their circulation within six (6) years.

Three (3) others are insolvent, but their circulating notes are amply secured. Forty-eight (48) banking institutions, not above enumerated, have been converted into national banks or are otherwise changing their condition, but have not availed themselves of the provisions of the law for finally closing their circulation account.

One (1) trust company and one (1) savings bank are voluntarily winding up their affairs, and one (1) savings bank, the Niagara County, is closing its business in consequence of insolvency, with liabilities, however, supposed to be less than four thousand dollars ($4,000).

Forty-seven (47) incorporated banks, whose charters have expired, still have notes outstanding, for the redemption of which they have not made any final deposit.

One hundred and one (101) savings banks, with an aggregate of deposits exceeding one hundred and fifty millions of dollars ($150,000,000); forty-five (45) banks of discount and deposit, including some of the oldest and most substantial and popular institutions in our State; and four (4) trust companies, with large capital and extensive business, still retain relations with this Department, unaffected by the financial changes of the last few years. On foe these, The Mechanics' and Farmers' Bank of Albany, has evinced its confidence in the free banking system of the State of New York