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in favor of a policy that shall immediately restore the prosperity of the Union, and preserve the commercial advantages of our state. The currency heretofore established in this state, through the agency of safety-fund banks, had a safe and wholesome action while the currency of the nation was regulated by the federal government. But that system of banking became odious as a monopoly, and the unequal distribution of its privileges, and the corrupting tendency of applications for legislative charters, spread discontent and alarm throughout the state. From these circumstances resulted the passage of the law which authorizes the business of banking to be carried on by associations without charters. Either of these systems would, under ordinary circumstances, have furnished a currency for this state, which, within our own boundaries, would have been uniform and readily convertible into specie, and, as exchanges were generally in favor of this state, would have been equally useful in other states. Although our banking institutions have not, as on a former occasion, suspended payment of specie, the farmer, the mechanic, and the merchant, are obliged to receive bank-notes whose full value can not be realized without presenting them for redemption at a distant place. The commerce of the state is embarrassed, and agricultural and manufacturing industry are oppressed, by the extortion of brokers and usurers. Ilowever the federal government may choose to neglect its proper functions, the evils of our domestic currency are within your reach, and I trust they will be the subject of speedy and effectual reform. It is a high privilege to furnish a circulating medium, whether that privilege be conferred by charter, or enjoyed under the more equal operation of a general law. It partakes of the responsibilities and dignity which belong to the sovereignty of a state, and its profitableness has been evinced by extraordinary dividends and accumulations. It is, therefore, not demanding an unjust or unreasonable equivalent to require those who enjoy this privilege to maintain a sound and uniform currency. Various plans have been suggested to accomplish this important object. One of these contemplates the employment of the bank fund, with equivalent contributions from associations formed under the general law, to redeem in the city of Albany the bills of the several banks. It is probably a sufficient objection to this plan, that it would divert the bank fund from its legitimate object and jeopard its security. A sec
ond system is to require the country banks to redeem their notes either in the city of New York or in the city of Albany. The objection to this plan is, that it would be unjust to require a banking institution to provide funds for paying its liabilities at two places, at its own counter and elsewhere. The force of this objection is weakened by the fact that the operations of trade carry the currency of the country to the principal mart. If the amount of issues collected at the place assigned for redemption were to be made known to any bank, it could be required to transmit funds to that place after a reasonable interval, and thus be relieved from the necessity of providing an equal amount to meet demands at home. If this system should receive legislative sanction, the comptroller might be required to apply the safetyfund, without delay, to the redemption of the balance which a bank had neglected or refused to pay after receiving the requisite notice, if such balance did not exceed a just proportion of the whole fund. This system has been partially in operation, and is understood to have been very successful. These suggestions are submitted in the hope that they may be useful in your discussions of this important subject.
The necessity of a revision of the general banking law, as recommended in my annual message at the last session, has greatly increased during the past year. It is alleged, and with too many evidences of truth, that the stock deposited with the comptroller as a basis for circulating notes has been in some instances purchased or paid for with the notes issued upon the same stock. Such a proceeding is manifestly an evasion of the statute, and care should be taken to guard against it for the future. Some of the associations have issued post-notes as currency.
This practice is unquestionably a violation of the spirit of the law, reprehensible in itself and fraudulent against the community.
It ought not to excite surprise that the system of free banking should in its commencement have been embarrassed by difficulties, or that institutions should occasionally have been established where they were not needed. When we reflect that we have been for thirty years improving the system of banking by incorporations, we shall be satisfied that we ought to exercise forbearance toward one which has just come into existence. In the midst of a pecuniary revulsion only two of the associations have been closed, and they have occasioned no loss to the community. There is, therefore, no sufficient ground for doubting the final success of the system, with such modifications as experience may from time to time suggest. Among these there should obviously be a plan for the redemption of the notes of the associated banks, similar to that suggested in reference to the safety-fund banks. While the system affords all the requisite facilities and security for sound and safe banking, it is obviously so much more equal in its operation, and so much less liable to be perverted to political designs, that I trust you will omit no effort to correct its defects and insure its successful operation.*
Permit me to express a confident hope that you will not add longer delay to what has already unfortunately occurred in filling the vacancy in the representation of this state in the senate of the United States. The action of the federal government, always important, has within a few years past excited unusual interest. Under the uniform system of policy maintained since the foundation of the government our country long enjoyed a career of prosperity, interrupted only by brief intervals, in which that policy was counteracted by circumstances arising out of the violation of our rights by belligerent European nations. The country has experienced a great change within the last three years. A pressure is felt in all its interests and throughout its whole extent, and every effort to rise has been followed by greater depression. The federal executive, in his recent communication to Congress, extends no hope of relief from these evils, but urges the adoption of measures, the very discussion of which has produced only the most disastrous consequences.
We are an industrious, economical, enlightened, and virtuous people. Our prosperity is hindered by no hereditary inequalities of political rights or social condition. We have enjoyed peace and tranquillity for twenty-five years. If then there be any virtue in forms of government, ours, if well administered, ought to secure national prosperity and general contentment and happiness. The power and influence of the executive department of the federal government are greatly increased, and the history of that government for the last few years exhibits a constant struggle on the part of the executive to control the opinions of the representatives of the people. His appeals from their decisions have been tried by popular elections for the first, second, and third time. In such trials the representative has to contend singly and unaided against the combined influence and patronage of the government. Not content with the already overshadowing powers of the national government, the president has arraigned before Congress the institutions of the states and the states themselves, and has discussed their domestic concerns with as great freedom as if they were responsible to the federal government, and were not sovereign in the conduct of their municipal affairs. These innovations furnish a new demonstration of the error of those who, at the adoption of the constitution, supposed the federal government too unstable, and the power and influence of the executive department too limited. The time seems to have arrived, when measures to restrain the increasing power of the executive and maintain the necessary independence of the states should no longer be delayed. Among such measures none would be more safe, more effectual, or more in harmony with democratic principles than amendments of the constitution of the United States, which should vest in Congress the appointment of the chief financial officers of government, and limit the tenure of the presidential office to a single term.
* The most important of these suggestions were adopted, and the currency of the state was restored. See Laws of 1840, chaps. 202 and 363.
+ This vacancy had existed since March 4, 1839, owing to the refusal of the senate to meet the Assembly in joint meeting for the purpose of filling it. The Hon. N. P. Tallmadge was subsequently elected. -Ed.
It is a source of the highest satisfaction, that notwithstanding all adverse circumstances, the prosecution of works of internal improvement with private capital has not been arrested during the past year, but has been carried on with patriotic and praiseworthy assiduity and with great success. That section of the New York and Erie railroad, about fifty-five miles in length, which extends from Tappan, on the Hudson river, to Middletown in Orange county, will soon be completed. The result will, it is hoped, vindicate the whole enterprise from unjust prejudices and contribute to hasten its consummation. The Long Island railroad has been extended far into the interior of the island. In consequence of the completion of the Utica and Syracuse and the Syracuse and Auburn railroads within the past year, only one hundred miles of railroad remain to be finished before our citizens will enjoy the facilities of a passage by steam power from one extremity of the state to the other, and the steam navigation
of the remote western lakes will be connected with the steam navigation of the Atlantic. The completion of the railroad from the coal mines at Blossburg, in Pennsylvania, to the termination of the western branch of the Chemung canal, is an event of great importance to the central part of the state, and among its beneficial results we may anticipate an increase in the revenues of that canal.
The various surveys directed by the legislature at its last session, with the design to improvement of the northern tributaries of the Hudson, to an extension of the Chemung canal to the line of the state of Pennsylvania, to an extension of the Black River canal to the St. Lawrence, and to the construction of a canal in the valley of the Connewango, have been successfully prosecuted. I transmit brief statements which have been submitted to me by the engineers engaged in the two first-named surveys. certain you will not withhold whatever of encouragement and support can be extended, consistently with the financial condition of the state, to our fellow-citizens who feel an interest in these several improvements. I recommend a continuation of the survey of the northern branches of the Hudson as necessary to a more perfect acquaintance with the extensive region of country which will be opened to commercial intercourse by the improvements contemplated in that section of the state.
The general policy of prohibiting the transportation of freight on railroads which run parallel to the canals is not altogether without question. There can however be but one sentiment as to the expediency of suspending the prohibition during the season in which the navigation of the canals is arrested by ice. A prohibition at that season operates injuriously to the agricultural interest, and tends to produce a monopoly of the necessaries of life, at a time when want and misfortune are felt most severely by the inhabitants of our populous cities.
Apprehensions prevail that the public credit may become too deeply involved in the prosecution of works of internal improvement. The project of enlarging the Erie canal was adopted by the legislature of 1835. It arose from the necessity of repairing such parts of the canal, especially the locks and aqueducts, as were worn by time and use. With the great increase of trade, delays and inconveniences were experienced in consequence of the limited dimensions of the canal and the want of double locks.