EVENINC POST EXTRA.
PAY AS YOU GO!
OB
THE UNCONSTITUTIONALTY OF THE NINE MILLION DEBT
BILL DEMONSTRATED.
I. Letter from the Hon. SAMUEL J. TILDENS
II. Letter from the Hon. JHuN A. Dix.
III.  Opinion of the Hon. LEVI D. CHATFIELD, Attorney General.
IV. Protest and resignation of the Twelve Senators.
V. The Legislative Address.
VI. The Canal Enlargement Act.
VII. The Financial Article of the Constitution.
N3w Tork:
PUBLISHED BY WM. C. BRYANT & CO., 18 NASSAU ST.
1851.








The Canal Bill and the Constitution.
MR. TILDEN'S LETTER.
NEw YORK, April 7th, 1851.
Dear Sir: Your letter found me, as you supposed it would, " immersedin business,
and having neither leisure nor inclination for politics;" indeed more oppressed for
a few days with professional and private engagements than at almost any former
period. But your call to "find or make the opportunity" to contribute what I am
able " to expose the character of the Canal bill" now pending before the Legislature,
and hurried so rapidly to an enactment, is one to which, ably as that duty has been
performed in your columns, and will be performed by our friends in the Senate, I
cannot be indifferent. The obligation to maintain the provisions of the constitution
in regard to the state finances-to adhere to the wise and salutary policy which
they established-to preserve our faith and honor solemnly pledged to the public
creditor-and to rescue the noble trust for the million and for posterity which our
state works will form when disencumbered from the debts that now press heavily
upon them, is common to us all. But I owe, in addition, to the memory of Michael
Hoffman, by whom these provisions of the constitution were mainly prepared, and
to whom they are an imperishable monument,-and scarcely less to the memory of
his friend and ours, who, during the sessions of the convention, lent to the Executive
station the lustre of his transcendant personal qualities, and at whose instance I
undertook to aid, according to the measure of my inferior abilities, the labors of
Mr. Hoffman,-to show that his work was not so imperfectly done that the measure
proposed can ever be invested with the authority of law so long as the constitution
itself shall remain unchanged.
Until I received your letter and a similar one from Mr. Burwell, I did not suppose
that the Legislature could be induced to adopt Governor Hunt's recommendation.
I have just succeeded in getting a copy of the bill and report, and of the opinion of
Mr. Spencer, concurred in by Messrs. Stevens and Lord; and shall make some observations upon them, although the period is so short before the question will be decided
as far as the Legislature is concerned, and my engagements so numerous, that I
cannot hope to do full justice to the discussion.
If the constitution is to be violated under the advice of counsel, Mr. Spencer has
qualifications to be a leader in the case which none will dispute, and few can rival.
He has addressed himself to the work, with an enthusiasm worthy of that class of
our Whig brethren, who, under the impulse of Mr. Secretary Webster, are just now
manifesting so profound a sense of the sanctity of constitutional obligations where
they merely require us to deliver an innocent, perhaps free, neighbor to bondagenot to pay our just debts. He has invented a mode of borrowing nine millions of
dollars without owing any thing, and has found authority for carrying through such
a fair business transaction in behalf of the state, in the third section of the seventh
article of the constitution, which provides that,
" After paying the said expenses of superintendence and repairs of the canals, and
the sums appropriated by the first and second sections of this article, there shall
be paid out of the surplus revenues of the canals, to the treasury of the state, on
or before the thirtieth day of September, in each year, for the use and benefit of the
General Fund, such sum, not exceeding two hundred thousand dollars, as may be
required to defray the necessary expenses of the state; and the remainder of the




4
revenues of the said canals shall, in each fiscal year, be applied in such manner as
the Legislature shall direct, to the completion of the Erie Canal enlargement, and
the Genesee Valley and Black River Canals, until the said canals shall be completed."
The question is, Can this surplus of the canal revenues be constitutionally anticipated and applied to the purpose specified, an indefinite period before st accrues or is
received?
MR. SPENCER'S CONSTRUCTION OF THE THIRD SECTION.
Mr. Spencer enters into an elaborate criticism of the word " applied."  He seeks
to throw light on its meaning from an exhaustless legal controversy, which never
yet threw light upon any thing-the vexed question whether the statute authorizing a trust " to apply" rents and profits to " the use of a person," authorizes a trust
" to pay over to" that person. And he concludes that " the expression," apply, " so
far from being a direction to pay out or expend, is with difficulty made to include
such an act"! He is very doubtful whether the mandate of the constitution that
certain surplus revenues " shall be applied to the completion" of the canals, permits
them to be " paid out" for such things as building a new lock or enlarging the prism
of a canal; but is quite clear that it does authorize those revenues to be used to
borrow money upon, to be afterwards " expended" for such purposes!
Most men would come to exactly the opposite result; would think the right to
pay out the money in the actual execution of the work, " to the completion" of
which it was to " be applied," undeniable, and the right to use it to borrow money
upon, at least very doubtful.
As a mere verbal criticism, there is little accuracy in Mr. Spencer's explanation
of the legal use of the word apply, and little analogy between that use and the
language of the constitution. It is a novelty to find a man so hacknied in the controversies in relation to the doctrine of trusts, saying that the phrase " to apply to
the use of," is with difficulty made to include the act of expending or " paying out."
The exact objection to the trust " to pay over" is, that the trustee cannot be said
" to apply to the use of" a person, because he does not exercise the active duty of
" paying out" and "expending."  Nor is this technical phrase substantially the same
as that in the constitution. To apply to the use of a person is, of itself, a grant of
much more extensive powers than to apply to the completion of an unfinished
structure. Nor does the trustee, in the case cited, derive all his powers from
the intrinsic force of that language.  The persons for whose benefit active trusts
are allowed to be created, are usually incapable of administering their own affairs;
and society has therefore assumed the care of their interests. An elaborate and
complex system of statutory and common law regulations has grown up, defining
the powers and duties of trustees; and from these regulations many particular
authorities are derived, which could not, independently of them, be inferred from
the words designating the trust.
Mr. Spencer not only refers to a use so purely technical to fix the general meaning of the word " apply," but argues that it includes the independent and substantive power to anticipate and pledge, because trustees, under the technical
phrase of which this word forms a part, sometimes possess such authority; that it
is not only consistent with. but actually confers such power. Now, the fact that it
is generally necessary for the trustee to apply to a court to sanction the exercise of
such authority, shows that, even in this case, the power is not derived from the intrinsic
force of language much broader than that of the constitution, but from accessary
circumstances or the general law. But, if the verbal criticism of Mr. Spencer were
correct, nothing can be more fallacious than to interpret common language by a
use purely technical. The tendency to do so is the vice of the legal profession, and
especially of minds more acute in discovering analogies than capable of determining
their relative values.
The Convention cannot be supposed to have been as much versed in the learning
of trusts as this expounder of their works. But those of them at least who had
been employed in making a blade of grass grow  where none grew before, might
console themselves that they had not lost the ability to understand ordinary language in its obvious meaning. They did not suppose that, in using a very common
word, they incorporated into the constitution any of the voluminous treatises on
trusts which grace our law libraries, or conferred upon the legislative agents the




5
special authorities sometimes exercised by trustees. They knew what they meant,
and expressed it in apt words, used in their ordinary and correct signification.
ITS RIGHT CONSTRUCTION.
They said, not that the surplus should be "set apart as a fund to promote the
completion"-not that it should " be applied to the benefit of the canals"-no such
loose and general phrase, but that it should "be applied to the completion" of those
works known at the time to be unfinished but in progress. If they intended
the direct expenditure of the surplus in the actual construction of the works, what
fitter or more exact language could they have selected?  They were familiar with
the distinction between appropriating as a fund and " applying" on a work in progress, both of which they provided for in this very article, in carefully discriminating language. They understood that the discretion conferred for managing as a
fund, and for applying a revenue to complete an unfinished structure, are of a
very different nature.  They could not have manifested their intention that this
surplus should not be held or managed as a fund to borrow money upon-or to
promote the general object in collateral or indirect modes, more clearly, except by
an express prohibition.
Their language, by its obvious signification, not only excludes any such use of
this surplus, but was adapted to the practical operation of the provisions, under the
system then existing of administering the canals and keeping the public accounts.
It first requires the payment of the expenses of collection, superintendence and
ordinary repairs, and the sums devoted to the two sinking funds which had been
created.  It says, " after paying" them-not after providing for-not after estimating or deducting or reserving for-but after actually paying them, which could
only be done when the revenues had been received. It next requires a payment to
the treasury or General Fund, as it is called, of an annual sum. It says here also
-shall be "paid," and paid " on or before the thirtieth day of September. in each
year."  It then requires that "the remainder of the revenues of the said canals,
shall, in each fiscal year, be applied to the completion of the Erie Canal enlargement,
until," &c. When applied? Not till after the revenues are actually received, and
the three classes of payments to which priority is given, are actually made.  It is
a monstrous perversion, to say that such language was intended to authorize or
permit that surplus to be anticipated and applied an indefinite period of years before
the revenue should accrue, or the surplus be ascertained.  Applied how, and by
whom?  Not by the Legislature, but by the executive officers-the canal commissioners, it would be as the law  then was and now is, "in such manner as the
Legislature shall direct." Discretion there is here, doubtless, in the apportionment
between the three canals, and in directing the expenditure for the different structures, the various parts, and numerous details of each; an ample field for the exercise of a discretion, which Mr. Spencer so strongly claims in behalf of the Legislature; but discretion in directing the application of the surplus when realized, and
not in expending it an indefinite period beforehand, or treating it as a fund to
borrow money upon, to financier with, or to " use in any way" which might conduce
ultimately to the completion of the canals.
ITS HISTORY.
If any thing more than the plain import of the language to every mind unsophisticated by technical subtleties, were needed to show the meaning of the Convention,
it can be found in the history of this section.  Its phraseology, so far as affects the
present discussion, was borrowed from a provision reported by the committee, and
drawn by Mr. -Hoffman with direct reference to a distinct plan for the progressive
improvement of the Erie Canal, by the application of the surplus, as it should be
realized, "in each fiscal year."
Mr. Spencer seems to suppose such a method of completing the canals so inadequate, that the Convention could not have intended to enjoin it upon the Legislature.
With deference to those financial geniuses who think that nothing wise or effectual
can be done with their own money, or without borrowing other people's, I must
entertain a different opinion. The plan contemplated by the committee was the
same on which the enlargement of the Erie Canal was originally commenced, and it




6
was believed by at least two members of the committee, that if that plan had been
adhered to and wisely executed, we should, in 1846, have been in the enjoyment of
nearly all the benefits of the finished enlargement, with the canals free from the
incumbrance of five and twenty millions of debt. In such a condition, we should
have been able to strike off, not merely a small part of the two-fifths of the whole
cost of transportation which went to the carrier as freight, but nearly all of the
three-fifths of that cost which the state was compelled to exact as tolls, in order to
pay the interest on improvident " anticipations" of future revenues. It was, therefore, not in authorizing new mortgages-it was not even in expending actual income
upon the improvements which we did intend adequately to provide for-but in
discharging the existing liens of the public creditor, that our power was most
clearly seen to make the great west tributary to the grandeur of our state and the wealth
of our citizens, by the blessings we should confer upon it-to cheapen exotic necessaries to our remote interior, and to cheapen bread to our crowded cities.
HOW THE CANAL WAS PRACTICALLY ENLARGED.
Thus warned how much could be lost by the improvident expenditure, which is
the characteristic of easy and eager borrowers, whether states or individuals, the
committee had learned also how much could be accomplished by that wise application of moderate sums, which is the characteristic of those who pay as they go.
The original excavation of the Erie Canal had been, in some parts of it, considerably less than the four feet required by law, and the brilliant financiers who encumbered it with its present debt, were too busy in planning magnificent improvements,
in borrowing money to make them, and in estimating imaginary'incomes with which
to pay the loans and enrich the State-to attend to the meaner duty of cleaning
out from the channel, the gradual deposits of wash from its sides. In the last year
of their administration, when thirteen millions had been spent on the enlargement, in
beginning everything, and finishing nothing so as to be available-when the works
had practically ceased because the treasury was inadequate to the current expenses,
and could no longer borrow-when the credit of this great State had fallen so low
that its six per cents were selling at two-thirds their present market value-the inconveniences from such obstructions to navigation became so great, that the ordinary time of a trip from Albany to Buffalo and back, increased from eighteen to
twenty-two days, and the Canal Board for the first time restricted the size of the
boats, by prohibiting the use of any drawing more than three feet of water. A half
year afterwards, Mr. Flagg was restored to the administration of the department.
He repealed this restriction, commenced bottoming out the canal and raising its
banks, and imparted his characteristic efficiency to its general management. During
the four years that intervened until the meeting of the Convention, the canal became able to accommodate boats of over eighty tons; and, notwithstanding the
smaller boats were generally continued in use until they wore out, the actual average of the down cargo had nearly doubled, and the price of freight had experienced a great reduction. The engineers, on whose official reports the enlargement
was originally authorized, held out the promise of a diminution in the cost of
freights, of about forty-five per cent. in a canal of seven feet by seventy.  One of
them estimated that thirty- five of that forty-five per cent. reduction, would be made
by the use of a boat of seventy-nine tons in a canal of six feet by sixty; a second
that forty per cent. of it would be attained by a boat of one hundred and three
tons in a canal of such dimensions; and the third, that it would be entirely realized
by a boat of eighty tons in a still smaller canal. Beyond that, neither of them  anticipated much reduction.
The canal had been improved by Mr. Flagg's judicious expenditure, so as to give
an easy transit to a boat of six and even nine inches greater draft. The size of the
boat had increased, and it could be more heavily laden. The freights had fallen so
as to realize, to a large extent, the results contemplated by the engineers from  the
enlargement, as the maximum of economical transportion.  This was a great mystery, especially to those whose experience had been in the opposite system  of borrowing all they could, spending all they borrowed, and having the canal, in the
meantime, grow smaller and smaller. It was freely charged, that while Mr. Flagg
resisted any law for the enlargement, he had actually been doing the thing of his
own discretion, under the head of ordinary repairs. But that item had not increased




7
as fast as the business of the canals; and, carefully as he had been saving for the
state, he was not supposed to have saved so mnch from his small salary as to have
done it from his private resources.  To satisfy a curiosity which was growing uncomfortable, the water in the canal was measured, during the sitting of the convention, on the upper and lower mitre sill of every lock, and sounded in the intermediate spaces, on each side of the boat, every four rods from  Albany to Buffalo.
Sworn returns, which were examined by members of the committee, and were open
to the inspection of every member of the convention, showed that the increase of the
tonnage of the boat, and the reduction of the freights had been effected in a canal of
not more, and at some points rather less, than four feet of water for navigation.
The increase of the aggregate capacity of the canal had been not less remarkable,
and scarcely less mysterious. In the period to which I have before alluded, as memorable for its magnificent projects and its humiliating bankruptcy-when the
draft of the boat was restricted and the time of the trip lengthened, because the repairs necessary to keep the channel in working order were neglected, the canal commissioners insisted that the speedy enlargement was not only a " measure of fiscal
and commercial expediency, but of immediate and vital necessity." The ground of
their urgency, was, in their own language, that, "there was a fixed and absolute
quantity, to wit, 225,000 tons which if added to the descending tonnage (then 467,000
tons) would exhaust the remaining capacity of the canal," and that " any further increase of the trade must seek another channel." In 1842. the Commissioners repeated these estimates, and said that experience had established their correctness.
Nevertheless, the increase had, in the year before the convention was held, been
more than double that quantity, and for the year then current was evidently to be
triple, and yet the whole business was done so easily, as greatly to lessen the time
of the trip. As a member of the committee, and in fulfilling an allotment of duties,
I had occasion to discuss the capacity of the canal. After analyzing the representations as to detentions, crowds and local obstructions, and showing that similar complaints had been loudly made within the first five years after the canal was completed, and when its business was comparatively inconsiderable; I admitted that it
was difficult to measure the extent of the details with sufficient exactness, to determine the aggregate result; but claimed that there was a test decisive of the whole
controversy-the comparative time of the trip from Albany to Buffalo and back.
And I ventured to assert, that the ordinary average time of the trip, in 1846, was not
longer than it had been in the year before the enlargement was first authorized, and
when the down tonnage was scarcely more than a fourth of its amount in the current
season. And this, notwithstanding the boat having more than doubled its capacity,
could not be expected to be as easily handled or rapidly moved. A fact so potent
to dispel honest illusion, and to silence misleading clamor, brought instantly upon
their feet, two gentlemen, of opposite politics, one of whom had ably maintained
the antagonist policy, and the other of whom had been prominent in the administration of the canals, to correct me; and unable to overcome their incredulity, I adjourned to the proofs.  The next morning, I submitted evidences'from original clearances, which had been just received at the office of the Collector at Albany, and
others received during the great pressure of business, created by the foreign demand
for bread stuffs, at the close of the previous season; statements from towing and
forwarding establishments, and citations from the official documents of former
periods, which seemed to settle the controversy. As far as I know, the fact was
not afterwards called in question. I have adverted to it, and the grounds on which
it rests, because I deem it important, and the discussion of it was not reported.
HOW THE CAPACITY OF THE LOCKS WAS INCREASED.
The increase of capacity was to be, in a great degree, ascribed to the enlargement
of the boat, the deepening of the water in the canal and to general efficiency of admiinistration. But there is another particular which merits especial notice. A practical
limit to the capacity of the canal is in the power of the locks to pass the boats. At
the time the enlargement was undertaken, their maximum power was supposed to
be to pass one in about ten minutes. In 1841, when the commissioners thought that
two hundred and twenty-five thousand tons added to the down tonnage would exhaust the utmost capacity of the canal, it was estimated to be to pass one in a little
over seven minutes. In 1843, a number of the locks at various points were watched




8
and timed for the same twenty-four consecutive hours; and it was found that they
passed the boats in from four to six minutes each. Something of these results may
have been accomplished by manning and working the locks efficiently. But there
was a more potent cause.
In the lock gates are inserted paddle gates, as they are called, through which the
water is let in and out, until the lock gates can be moved. The main detention in
passing the locks is in filling and emptying them; and the rapidity with which this
can be done must depend upon the construction of these paddle gates.
Nobody condescended, so far as I could learn by a diligent search through a fearful library of official and scientific reports on the improvement of the canal, to pay
much attention to them. While we were incurring an expenditure of four-and-twenty
millions, and encumbering our noblest work with a mortgage that will for a generation rob it of its chiefest power to benefit the millions whose commercial intercourse
with the world it might still enlarge and cheapen-and doing this mainly on the
ground of its inadequacy to its business, these humble but useful servants were
getting improved as they could. They felt no difficulty in doubling or tripling the
capacity of the canal from what it was supposed to be when the enlargement was
undertaken, almost without cost. They went on working silently under the feet of
men whose eyes were in the clouds, and, by gradual approximations to what they
were capable of, confounding all calculations as to the quantity of tonnage which
the canal could accommodate.
About three miles above Schenectady is Alexander's lock. Through it must pass all
the tonnage that concentrates in the Erie Canal on its way to tide water. The
superintendent had at an early period kept an account of its lockages, and from its
power in this respect, the commissioners in 1841, had calculated the capacity of the
canal. In 1846, it was an old lock, built with the canal itself, and single. There it
stood, doing the business that came from both ways, and apparently never wearied
with showing how much less liberal were Mr. Ruggles' calculations of its power
than his estimates of business, surpluses and sinking funds. In analyzing the experiments of 1843, the manuscript reports of which were found in the Canal Department, I observe a whole hour, in which the average time of its lockages was three
and a half minutes; and I learned from the superintendent, whom Mr. Bissel was
good enough to send down to me, that its paddle gates were not of the best construction. He added two at one end of the lock, not finding it convenient to do so
at both, and reported a saving of twenty seconds. During the session of the convention, while the depth of water was being measured, the time required to fill and
empty the locks and to pass the boats, was also tested, and it was ascertained that,
with the best paddle gates and apparatus, it could be done easily in three minutes.
If the canal were able to give easy transit to boats of double the tonnage on which
its maximum capacity was calculated by Mr. Ruggles and Mr. Spencer in 1841, and
the locks were able to pass them in one half the time they supposed to be required,
the capacity of the canal would be quadrupled. It has been, in fact, tripled between
the time they left its administration and the session of the convention.
Hence, it was able to accommodate not only the increase from the 467,315 tons it
was carrying at the time of this estimate, to the 691,315 tons which were to exhaust
its utmost capacity, but to 1,107,270 tons in the year of the convention, and to
1,431,250 tons in the year after. More than four times the increase predicted as exhausting the maximum capacity of the canal, and more than three times the actual
aggregate when that prediction was made, were thus achieved, under the administration of Mr. Flagg, with additional facilities to business, and without much sw elling
the account of ordinary repairs. It is remarkable that Mr. Ruggles, whose name
heads the report of the Canal Commissioners which founded on calculations so fallacious, the disastrous policy that had almost bankrupted the state, has published an
elaborate letter in favor of the present project; and Mr. Spencer, whose name heads
reports of the Canal Board adopting the same general views, has published a labored argument to establish its constitutionality. The experience of such errors which
aroused the people to assemble in their delegated sovereignty to take from all future
agents the power to repeat them, seems to have been lost on these gentlemen. The
latter gravely argues, that the convention could not have intended to restrict the
Legislature to the expending of the surplus as it actually accrues, because it would
be so inadequate; forgetting how much more Mr. Flagg was able to accomplish by
a tenth of the present surplus wisely applied, in that manner, than had been done




9
by an expenditure of" anticipated revenues," which emptied the treasury-prostrated the credit of the state, and entailed oppressive mortgages upon the canals.
HOW THE ENLARGEMENT MIGHT BE COMPLETED WITHOUT BORROWING.
Looking forward to the future, the committee saw that these processes, so efficient and so inexpensive, were not exhausted. The average tonnage of the boat
would be brought up nearly one-third, as the old were gradually supplanted by new.
The paddle gates could be improved at very slight expense. The water could easily
be deepened a foot by bottoming out the canal to the level of the mitre-sills of the
locks, and by strengthening its banks. The enlargement could be made, to a considerable extent, immediately available, by judicious improvements at particular points.
A second line of locks, of the enlarged size, could be brought into use the whole distance between Albany and Syracuse-where the main pressure of business is-by
an expenditure of three hundred thousand dollars.  One such line might next be
completed to Buffalo; and then might be added whatever convenience should result
from doubling the tier of enlarged locks through the mountain ridge at Lockport.
An expenditure of two millions and a half-the engineers would say much lesscould accomplish these improvements, and would put us in immediate use of the boat
of one hundred and twenty tons, and again triple the capacity of the canal. Most
of the expenditures would be in execution of the general plan of the enlargement,
and the residue so small as to find an equivalent in the immediate results. If the
business did not increase, it would be more than accommodated; if it did, as the
committee expected, and it was not found necessary to accelerate the inevitable reductions in the tolls, that increase would furnish a surplus, not only adequate to secure all incidental benefits, but to ultimately complete the work on a scale of costly
magnificence.
THE RISKS OF INCURRING MORE DEBT TO COMPLETE IT.
The ability of the canal to do its accumulating business from the very outset,
being thus adequately and certainly assured, the motive which was mainly urged
in favor of the enlargement, and was most influential in its adoption, was fully
answered. The accessory benefit of a reduction in the freights, further than was
already realized, or could be by these improvements, was not so sure in its extent,
that the attainment of it at an earlier period was an equivalent to the inevitable
evils of a large increase of the debt; the loss of the certain and extensive power
to cheapen transport by lessening the tolls-the accumulation of the annual charge
for interest, which already amounted to thirteen hundred thousand dollars, and consumed nearly all we could apply on the debt-the risk that future anticipalions
might be as inefficiently applied as the former had been, or that if, by any of the
errors to which human calculations are subject, they did not materially lessen the
cost of transport, they would deprive us of the ability we yet possessed, to effect
that result in other modes, or to gradually discharge the existing mortgages.
Anticipations of income or profits, to such an extent that the interest on the amount
expended, presses closely on the whole income or profits expected, usually prove
fatal to individuals, and will do so until human nature is changed, and hopes become
more real than facts. Experience has shown that they are not less ruinous to states.
Not even the unmatched power of the Erie Canal to realize sanguine conjectures as
to its business, were able to overcome miscalculations as to cost, or misapplications of
expenditure, or more obvious difficulties which should have been foreseen in such a
system of financiering,-so as to attain any of the benefits of the enlargement, or to
give to the sinking funds which figured so conspicuously in the original plans, any
existence, except in the imaginations of Mr. Ruggles and Mr. Spencer. But the anticipations of its future revenues had created enormous expenditure for enterprises which
ought never to have been undertaken-for the partial construction of works at extravagant prices, and without making what was done available-and for interest on such
misapplications of borrowed monies-in all, an actual waste sufficient to have enlarged the Erie Canal in a costly manner, and without a debt; and had encumbered
it, as yet unenlarged, with an annual charge for interest, which, added to the surplus,
would have been as much as the state could have applied, economically, or wisely
to such objects,-and withannual instalments of principal for a generation to come.




10
MOTIVES AND INTENTION OF THE CONVENTION.
With such convictions as to what had been lost by anticipations of future revenues,
of how little had been accomplished by the large amounts of them expended, of how
much had been done by the wise application of small sums of accruing revenues,
and how much could still be achieved by that policy; in the presence of such experience and facts as I have adverted to, the report of the committee was matured.
Need I say that it intended not to authorize-not to permit such anticipations for
the future? It contemplated the policy of applying the surplus, as it should accrue,
to the public works, and in such manner as to make the expenditure available at
the earliest period. Its language in every part is consistent with such a policy, and
with none other.
The same motives which dictated that policy, made the committee desire to secure
to some extent, a priority in the application of the surplus to the Erie Canal. To
improve that work in such manner as to make the previous expenditure, as far as
might be, available, seemed to be the most efficient way to complete it, and to
complete the other works. But so much apprehension was felt, that thejealousy of
other local interests would defeat such a proposition, that it was deemed prudent to
confine the priority to a sum which was supposed to be amply sufficient to make the
improvements I have mentioned as contemplated by the committee; and to leave
the rest of the surplus in the discretion of the Legislature. A provision was accordingly reported, that the surplus of the revenues " shall, in each fiscal year, be
applied to the improvement of the Erie Canal, in such manner as may be directed by
law, until such surplus shall amount in the aggregate to the sum of two millions and
five hundred thousand dollars." An alliance of the friends of the unfinished laterals
with many who professed to be the especial friends of the Erie Canal, but were unwilling to apply so much to the payment of the debt, aided by a few who wished to
leave the matter to the discretion of the Legislature, indicated that the convention
would not give any such priority to the Erie Canal. And at length, after a prolonged struggle, a small majority was formed to extend the provision to all the unfinished works. The committee were instructed to substitute for the clause reported
by them, the provision that the surplus "shall, in each fiscal year, be applied, in
such manner as the Legislature shall direct, to the completion of the Erie Canal
enlargement and the Genesee Valley and Black River canals, until the said canals
shall be completed." That substitute was adopted, and constitutes the third section
of the seventh article of the constitution, in respect to which the present question
arises.
THEIR CONSTRUCTION OF THIS SECTION.
The material words of this section-" shall, in each fiscal year, be applied," are the
same as those of the committee, and the words-" in such manner as the Legislature
may direct," equivalent to those of the committee "in such manner as may be
directed by law."  The language was chosen to command an application of the
surplus from time to time as it should accrue, and was intended to confine the expenditure to such a method. The plan of its application in that mode was stated
to, and discussed by, the convention. The provisions restraining the anticipation
of revenues and the contraction of debts, had not yet been adopted.  But this
clause was universally understood, not only not to authorize, but absolutely to preclude either. It was so intended by the committee, who carefully selected the
words. It was so construed by all who supported the policy of the committee.
It was so construed by all who opposed that policy. Whether it would have this
effect, was a question to which the attention of the convention was drawn during
all the discussions, if that may be called a question in which all agreed. The
amount of the surplus that could be applied under the operation of these words,
and the time when that amount could be applied, was the exact point upon which
all the great discussions on the finances, the sinking funds, the support of the
government, and the completion of the several canals, turned. Every man who
discussed the appropriations for the payment of the debts, or the provisions for the
treasury, both of which had priority, did so with reference to the amount of the
surplus that would remain to be applied, "in each fiscal year," to the public works,
and the influence which that amount would have in hastening or delaying the time
of their completion. And constantly and carefully as the attention of all was thus
attracted to the meaning in this respect of the words employed, I defy the production from the reported debates of a single expression of doubt that their effect




IIt
would be to preclude anticipations and confine the expenditure to the surplus as it
should accrue. Under this construction, thus universally assumed and expressed in
the convention, was this provision adopted.
MR. SPENCER'S ARGUMENT FROM SECTION FIFTH IN RESPECT TO THE SINKING FUNDS.
Mr. Spencer argues that the principle of applying revenues by anticipating their
receipt, is recognized and sanctioned by the provision, that if the sinking fund
shall prove insufficient to enable the state, on the credit of those funds, to procure
the means to satisfy the claims of the creditors of the state as they become payable,
the Legislature shall, by equitable taxes, make them sufficient perfectly to preserve
the faith of the state; and that this provision construes the word " apply" to mean
the borrowing of money on the mortgage of future revenues, and expending it in
advance. Without entering into a full discussion of this clause, I will remark, that
any person who will study the whole section and its history, will come to the conclusion that, if such a construction were not precluded by other express provisions,
it could not be justified.
The plan of the two sinking funds originally reported by the committee, made
them nearly adequate to pay the debt as it should fall due. The largest deficiency
at any time during the whole period for its extinguishment, was about three and a
half millions, and the average less than two. It was supposed that such an amount
could, without much inconvenience, be managed by the fiscal officer by temporary
advances from the specific funds belonging to the state-such as the school, literature and other funds, which could be employed to purchase such stocks; by the
application of the revenues of the Treasury or General Fund; and by the borrowing of money under the express exception to the general prohibition of new debts,
which allows them to be contracted to the extent of one million of dollars, " to
meet casual deficits, failures in revenues, or for expenses not provided for." If,
however, these resources should at any time prove insufficient, the Legislature was
commanded to have resort to the taxing power of the state, to make the sinking
funds " sufficient perfectly to preserve the public faith."
All the provisions of the financial article, as reported, had aimed to effect an
equitable settlement between the treasury and the canals, which, from the revenues
of the latter, should reimburse to the former the principal and interest of all its
advances. This was deemed to be mere justice to such tax payers as had not been
benefitted, and in some cases had been injured by the construction of the canals;
and was also designed, by a final adjustment of all their claims, to take from them
every apology for pensioning the government upon the canals after the debt should
be paid-thus levying a special tax on trade and transportation, obstructing the reduction of tolls and cheapening of exchanges on the one hand, and encouraging improvidence in the expenditure of the government on the other. This settlement, as
respects all the past, had been consummated by the provision from the revenues of
the canals for the sinking fund to pay the treasury debt, and for the annuity to the
treasury.
But, as this section was known to require future advances to the canal sinking
fund, the same principle was to be applied to them also, and they were to be made
" on the credit of the sinking fund."  And it was immediately added, in the same
section, that every contribution or advance to the canals, or their debt, from any
source other than their direct revenues, shall, with quarterly interest at the rates
then current, be repaid into the treasury, for the use of the State, out of the canal
revenues, as soon as it can be done consistently with the just rights of the creditors
holding the said canal debt." No borrowing " on credit of the sinking fund" was
contemplated, except that in which the treasury of the State should be in some
form the lender. The inconvenience which would be felt. in "nursing along" the
debt, was urged as a reason for not adopting the plans by which a less sum was to
be appropriated to the sinking funds; and tables showing this effect were exhibited.
When, at a subsequent period, that amount was reduced, the consequence in this
respect does not seem to have attracted attention.
That construction of this section which authorizes anticipations by borrowing,
from other parties than the state, for the sinking fund, is to be itself justified-it
cannot justify other anticipations which would operate to repeal express provisions
of the constitution, and produce practical mischiefs which could not result in this




12
case.  There is a certain technical sense in which the various amounts of stock held
by different persons can be deemed to be separate debts, and in which a transfer or
renewal of stock may be considered the creation of a debt as between the parties.
But the Convention, undoubtedly, treated the canal debt and the treasury debt as
entireties, described them as they stood, at a date specified, with a known amount
and an addition mentioned; and provided for them by the application of a fixed
annual sum. If the borrowing from parties other than the state itself, to meet the
payment of the debts as they fall due, can be justified, it must be on the ground
that it is only a mode of prolonging the existing debts, until the sinking funds are
able to pay them; that it is specially authorized in this case by the provision referred to; that it has no effect to increase the amount of the debts at the time the
constitution applied to them, or at any time afterwards, when that amount had been
reduced; that it does not create any debt against the state generally, or any mortgage or specific lien against any particular fund, revenue or property of the state,
beyond what existed before-and that the proceeds being actually and immediately
applied to cancel so far as they go the existing debt, the act is but a legitimate
operation of the sinking funds which fully satisfies the provisions in regard to them,
and does not violate the provisions which prohibit the contracting of debts. I do
not know whether the scrip issued for the loan made last year for the sinking funds,
confines the liability of the state to a lien on those funds.  I do not think it of the
slightest consequence.  No decent man would say, if the sinking funds were hereafter to fail, that the obligation of the state to pay from all its resources, would be
diminished by any such condition. And it is idle to say that there is any substantial analogy between an anticipation, which neither increases the debt to be paid,
nor diminishes the sum to be applied to its payment, and an anticipation which adds
its whole amount to the aggregate obligations to pay, whether in the form of a personal bond or of a mere mortgage.*
PROHIBITION OF ALL APPROPRIATIONS AND PCEDGES MORE THAN TWO YEARS IN ADVANCE.
But, fortunately, the constitution has limited the power of the Legislature to
contract obligations in either of these forms by express provisions. The Convention
found the power to expend, not merely what was in the treasury, but what could
be raised by anticipations of the revenues of the state, mortgages of its property,
and pledges of its credit in the ordinary form of debt, vested in the Legislature
without limit; and so far delegated by it to the fiscal officer, that the government
could get on almost without a Legislature.  It restrained both the delegation and
the exercise of all these powers. It first provided that the executive officers should
not apply, until the Legislature had authorized them  to do so by appropriating;
declaring that no "moneys shall ever be paid out of the treasury of the state, or
any of its funds, or any of the funds under its management, except in pursuance of
an appropriation by law." So far, it but established a rule with which the public
mind is familiar.  But it proceeded to enact another wholly new and of vast importance.  It added a prohibition that no such moneys shall be disbursed, "unless
such payment be made within two years next after the passage of such appropriation
act."
It was undoubtedly a part of the design of this clause to compel the Legislature
to review, at brief intervals, the ordinary standing appropriations. But it had an
object far more comprehensive and influential upon the action of the government.
An appropriation is an authority or direction by the Legislature to the executive
officers to apply money to a specified object.  This provision limits the power of
the Legislature to appropriate.  Observe how it operates on money in the Treasury,
at the time of the appropriation. The Legislature cannot say that this money, if it
remain in the Treasury two years, shall then be applied to the specified object; can
not empower the executive officers so to apply it. Any command or authority to do
* Since my letter was written, I have been enabled to see this scrip. It is in the ordinary form, and
expresses a full general liability on the part of the state. This is, therefore, a debt, even on Mr.
Spencer's construction. The authority of this anticipation of the sinking funds, proves too much for his
argument; it would sanction, not merely a pledge of a specific revenue without further liability, which
he cites it to justify, but a debt in the ordinary form, which he admits to be within the prohibition.




13
so, is void. Compliance with such command, execution of such authority by the
public officers, is illegal. The Legislature has no power over, can confer no power
over the disposition of this money, unless that power be exercised within the period
limited.
In respect to money which does not come into the treasury within the two years,
revenue which does not accrue within the two years, it, at no time, has the slightest
control. There is no period when it can constitutionally command or authorize the
executive officers to make any disposition of such money or revenue.
Can it, then, bind its successors to impose a command or confer an authority
which, if imposed or conferred by itself, would be unconstitutional and void? It
has'sometimes been doubted how  far one Legislature can, in the exercise of a
discretion clearly legitimate in its present operation, absorb to itself the future
discretion of its successors. But I have never heard it claimed that one Legislature
-in a case where it can exercise no discretion, do no act-can absorb the discretion,
control the acts of its successors; that it can create a constitutional obligation that
they shall do what it has not the constitutional right to do itself.
Our habits of thinking and acting have been formed in reference to our national
and former state governments, which were not subject to this restriction of their
authority. They possessed the full powers of appropriating and borrowing. They
consequently had the power, within their proper spheres, to make contracts which
require, in order to fulfil them, the future exercise of the power of appropriation.
In such cases, an obligation of good faith was created to exercise that power when
it became necessary.
But we must divest our minds of former associations in order to see the exact
extent and effect of restraints so novel as those now imposed on the customary
action of our state government.  The power to make contracts which require
appropriations, is limited by the same restrictions which limit the power to appropriate, except in cases where the specific and express power to make the contract
is granted; and in such exceptional cases alone, can the obligation of good faith on
future Legislatures to make the necessary appropriations, be created. A  mere
agreement that a future Legislature shall, after the two years have expired, make
an appropriation, would be a mere evasion of the limitation, and would impose
neither a constitutional or moral obligation.
The power of appropriating is the most comprehensive that can be exercised
over moneys or revenues; includes every form by which they can be drawn from the
Treasury. This restriction upon it applies to all uses of those moneys or revenues.
It was intended to prohibit the application of them in any form more than two
years in anticipation.
" The object of this section," said Mr. Hoffman, in explaining it to the Convention,
as reported by Croswell & Sutton, "was to prevent the Legislature from PLEDGING
the REVENUES for more than two years in advance, and to compel them  to review
them every year to ascertain what appropriations would be necessary."
This section contains other important restrictions. It is adverted to because I
think its effect is not yet fully understood, or easily appreciated by those who have
been accustomed to the former action of the government, and because it illustrates
the settled abhorrence of the system of spending by anticipation which induced the
convention to multiply and repeat its prohibitions; and not because I entertain any
doubt that the particular form in which such anticipation of future revenues is now
attempted is included in the restriction against the contracting of debts.
MR. SPENCER'S DISTINCTION BETWEEN THE SALE OF A RIGHT AND THE
CONTRACTION OF A DEBT.
Mr. Spencer argues that the borrowing of money to be re-paid out of a particular
revenue pledged for that purpose and without any further liability, is not the contracting of a debt.
The bill of Mr. Allen he says, " provides for the sale of an article, of a right to
receive certain moneys expected to accrue from  a specified source."  This sale,
however, is of a peculiar character. It does not enable the buyer to acquire possession of the " article," or to himself collect " the moneys expected to accrue," or to
identify his purchase as constituting a particular revenue, or a proportional part of
such a revenue, or such a revenue for a specified period; but merely the right to




14
claim  of the seller a certain sum  of money to be paid out of a revenue belonging to the seller.-It would need a skilful lawyer to make the conveyance; and,
if the " article" were sold under price, I fear the courts would consider it a usurous
debt.
Mr. Spencer contends that an obligation to pay a sum of money out of a particular revenue, is not a debt, because there is no further liability. He cites some adjudications of the courts, but they only prove that where property is pledged without
a covenant to pay, there is no liability to pay beyond the property so pledged-a proposition which nobody questions. They do not show that the obligation, with the
remedy thus specially limited, is not a debt even in the general legal sense of that
term. The word is sometimes used with a meaning as restricted as that for which he
contends; but, although I have not time to look for illustrations, I have no doubt that
it will be found much more frequently employed, even in the statutes, with a meaning broad enough to include also the cases where the remedy is specially limited.
At any rate, its legal use often concurs with the generic and comprehensive sense,
which is its ordinary and popular signification.
TRUE CONSTRUCTION OF THE PROHIBITION OF NEW DEBTS.
The language of the constitution is to be interpreted, not according to technical
refinements which are exceptions to even the generallegal meaning, but according to
the common use of the terms. Mr. Lord, who does not seem to have given much consideration to the question, but is nevertheless more accurate than Mr. Spencer, confines his opinion to the conclusion that such a mortgage " is not a debt, within the
prohibition of the Constitution.
Where is the authority for claiming that the words of that prohibition were used
in a narrow and peculiar sense? There is none in the constitution. There is
none in the discussions that resulted in its formation and adoption. It speaks of
debts direct and contingent, and then declares that " no debts shall be hereafter
contracted," &c. It uses the word in the most generic and comprehensive sense-it
includes every kind of debt-every form of obligation to pay money.
The universally known purpose of the prohibition would be utterly defeated, if
the import of its terms can be so restricted by ingenious construction. If the Legislature may mortgage the surplus canal revenues, by abstaining from the covenant
to pay, why may it not also mortgage other special revenues and funds?  The
pledging of them will not import any more than the pledging of this does, a general liability to pay. Why may it not mortgage the revenues to accrue from  the
auction duty? from the salt duty? There is the general fund, as it is called, which
is the treasury.  Can there be any doubt of the power to anticipate a fund? Why
may it not mortgage the revenue to accrue from the half mill tax, and at last pledge
the taxing power itself? No distinction has been made between these cases. If the
construction attempted to be established in the first of them shall prevail, the Legislatures may do in detail what it is expressly forbidden, on this very construction,
to do in the aggregate.
A construction that thus fritters away the most important constitutional provisions
deliberately adopted by the people; that thus violates the general intention of the
instrument, as established beyond a shadow of doubt, is unworthy of rational and
honorable men discussing an important question; it is unworthy of any but quibblers, whose zeal to establish a conclusion is greater than their respect for truth
and right. In officers sworn to obey the constitution, it is not only a violation of
public trust, it is unconscientious and immoral.
THE PRESENT BILL CREATES A DEBT.
But, even on a construction so repugnant to reason and right, can the present bill be justified?  It contains a provision postively  commanding the
Canal Board to make the revenue sufficient to pay the mortgage to be contracted. Is that to be considered as a part of the pledge to those who advance
the moneys? It is undoubtedly designed to influence them to give the credit. If
it is not to be maintained, it is a snare and a fraud. If there is an obligation to maintain it, by every fair construction it creates a general liablility. Will even Mr.
Spencer say that a pledge by an individual of an income to repay an advance, with




15
a disclaimer of further liability but with a covenant positive and uncon ditional to
make that income adequate, would not, on failure to fulfil such covenant, give a
right of action?  The parts of the agreement might not be very consistent; and
questions might arise which should prevail
But as to the moral obligation to repay the money, especially if the reduction of
the income was subsequently made from considerations of policy and interest, could
a doubt remain? The state cannot be compelled to pay.  It can assume no obligation but that of honor and morality-and if this provision is to be considered as the
inducement to the advance, and public expediency or necessity should hereafter
requirea reduction of the canal tolls, and this revenue should prove insufficient,what reputable man would say that the state was not bound by as high an obligation as it could assume, to refund the moneys applied, under this agreement, to its
benefit? If there is the constitutional power to make this contract, whether the
revenue pledged be sufficient or not, the money must be repaid. It is a debt; to
refuse to pay it by such resources as the state shall possess, is repudiation.
CONCLUSION.
My letter has already extended so far beyond my intentions, that I cannot discuss,
as I desire, the questions of expediency, administrative policy and public morality
involved. I can scarcely allude to them.
This anticipation of the surplus revenues is without the pretence of necessity. The
canal, well administered, is more than amply adequate to do all its business. If we
have not now the enlarged locks and other improvements contemplated by the committee and the convention, and are not actually using the boat of 120 tons instead of
80, it is simply because those who have expended the FOUR millions which have been
applied to the completion of the public works since the new constitution, and which
were far more than adequate to these purposes, have chosen to expend it in the
improvident and inefficient manner which characterized the disastrous policy of
1841.-How far a reduction of freight would result from this new expenditure of
nine millions, beyond what would be effected by the use of the boat of one hundred
and twenty tons, is conjecture. No sufficiently reliable estimates or evidences have
been adduced; nor have we any reason to hope from former experience or fiom
the mode in which the four millions have been recently expended, that there would
be much wisdomin the application of the proposed loan. We have, therefore, no inducements to re-enter upon the debtor system that proved so ruinous before. It is
dangerous to part, as the bill does, with our discretion in the regulation of the tolls
-a discretion which the Convention dared not to tamper with,-and more so to
establish a fixed rule, as the bill also does, which, if it have any effect, must introduce fluctuations, vexations to the transporters and hazardous to the revenues.  It
is of very doubtful morality for the state to obtain money on mortgages for which
it disavows its general liability, inducing the lender to take the securities under the
promise to afterwards invest in them moneys which it holds as trustee. There are
other not less grave objections to this bill.
It would be a calamity to the state, and to the country, to break down the
barriers with which our new constitution has surrounded the credit of the stateto reverse the example which we have set, and, returning to a career of individual
oppression and social dishonor, inflict the inevitable consequences, not only upon
ourselves, but upon other states and our posterity. It is pleasant to borrow. It is
easy to spend. It is hard to pay. Stringent as the present constitution was said
to be in providing for our debt, we have reduced its amount, in four years of prosperity, but four hundred thousand dollars! In the first moment of expansion and
of speculative feeling, we propose to increase that debt nine millions! Constitutional obligations, formed after years of controversy-and in the bitter experience
of errors, against the repetition of which they were intended to secure us-agreed
to by a vast majority of all parties in the Convention assembled to enact them, and
adopted by the vote of nearly the whole people, have not th.e slightest power to
restrain us. The consequences I cannot now trace.  If folly and madness are to
guide our councils, I study not the future they will form for us. I do not believe
that it is inevitable. I look confidently to our true-hearted friends in the Senate.
I rely upon the people-their wisdom, honor and morality.
Very truly, your friend,
WM. CASSIDY, Esq.                                      S. J. TILDEN.








Letter from John A. Dix.
NEW YORK, April 3rd, 1851.
Dear Sir-Your favor addressed to me here, was received while I was at my
residence in Westchester county, and I regret that it did not reach me in time to
enable me to state in detail my opinion in respect to the bill "to provide for the
completion of the Erie Canal Enlargement, and the Genesee Valley and Black River
Canals." I have examined the bill, together with the report of the Committee on
Canals and the opinion of Mr. Spencer, with as much care as the little time at my
disposal would permit. My first impression, when the proposition was originally
made, was, that the creation of a debt by the issue of certificates to be paid out of
the surplus revenues of the canals hereafter to accrue, was a debt within the scope
of the constitutional prohibition; and nothing contained in the papers referred to, has
changed or weakened that impression.
That these certificates constitute a debt, no one, it seems to me, can deny, excepting upon the narrowest verbal distinctions. The canals are declared by the constitution to be "the property of the state;" the Legislature is expressly forbidden to
" sell, lease, or otherwise dispose of any" of them. The bill proposes a scheme for
raising money to enlarge one of these canals, and to complete two others; and the
revenues to be derived from them are pledged to the reimbursement of the money
so to be raised. The money is to be expended for the improvement of the public
property, and with a view to the augmentation of its productiveness; and yet it is
denied that a debt is created, and more than intimated, that if the revenues on which
the ultimate payment of these certificates are charged, should prove insufficient for
the purpose, the only remedy for the leaders would be, an equitable claim to the
benevolence or charity of the Legislature.
These views strike me as exceedingly narrow, and altogether inconsistent with any
fair construction of those portions of the constitution which concern the payment of
existing, or the creation of future, debts. The certificates authorized by the bill to
be issued, acknowledge the deposit of given sums, and entitle the depositor to receive
the interest, and ultimately the principal, out of the surplus revenues of the canals.
Every condition essential to the creation of a debt is fulfilled. There is a lender, a
sum loaned, and a borrower; and, what is not absolutely essential, a fund belonging
to the borrower, pledged to the re-payment of the loan. The state stands, in every
legal and equitable relation, excepting as respects the remedy, upon the ground of
a private borrower, hypothecating the income of a specific fund for the payment of
his debt. If the state were to receive deposits of money in the manner authorized
by the first section of the bill, and were to issue certificates to the depositors, payable out of any moneys in the Treasury, after a limited time, would it be contended
that no debt was thereby created? Certainly not. With what propriety, then, can
it be contended that no debt is created, merely because the depositors are to be
reimbursed from the proceeds or income of a particular fund?
The fallacy of Mr. Spencer's argument arises from the fact of treating the hypothecation or pledge of the canal revenues as a sale, in violation of all reasonable
analogies. If an individual were to borrow, or receive on deposit, (to use the crafty
phraseology of the bill,) a sum of money, and were to give the lender or depositor
a certificate of indebtedness, payable out of the interest of a bond and mortgage, or
2




18
rents and profits of a farm, there would, according to Mr. Spencer's reasoning, be no
debt, but a mere sale, creating no indebtedness. Moreover, if, as is contended, it be
a sale, the very grave question arises, whether a sale of the revenues of the canals
is not a virtual sale, for the time being, of the canals themselves, and therefore in
conflict with that provision of the constitution which prohibits the Legislature from
selling or otherwise disposing of them.
You have, no doubt, observed, that it is a common mistake in lawyers, whose
intellects (if I may so express myself), have been oversharpened by keen practice
to apply to the great business of states, the same technicalities which govern individual transactions.  Partaking strongly, as the argument in favor of the bill does, of
this fallacy, it seems to me, even upon the narrowest technical view of the subject,
to have failed in its purpose.
It is well known to the people of the state (for the circumstances which led to
a revision of the constitution are too recent to be forgotten) that the two great objects in view, were to provide for the payment of existing debts, and prevent the
contraction of new pecuniary liabilities, without the previous sanction of a popular
vote. Both these objects were supposed to have been accomplished. The debts of
the state were provided for, by setting apart specific portions of the canalrevenue for
their liquidation; and no further debts, excepting such as were particularly specified, were to be contracted without, submitting to the people a law imposing a tax
for their payment. After making provision for these and other kindred objects, the
surplus revenues of the canals were to be applied to the completion of the Erie
Canal enlargement, and the Genessee Valley and Black River Canals.
All these provisions are to be taken together, and to receive a reasonable interpretation; and I feel justified in saying, from my own knowledge of the events out
of which the amended constitution grew, and of the debates in the convention which
revised it, that a proposition to anticipate the revenues of the canals by pledging
them in the manner proposed by the bill, to the payment of moneys to be borrowed
or received on deposit, for the more speedy enlargement of the Erie Canal, or the
more speedy completion of the Genesee Valley and Black River Canals, would have
been rejected by at least as large a vote as that by which the restrictions on the
power of the Legislature to borrow money were adopted.  It is eminently to be
desired, that all these works should be completed at the earliest day practicable,
consistently with a faithful adherence to the requirements of the constitution-those
especially which concern the preservation of the public faith, and the fulfilment of
its pecuniary obligations.
But I doubt exceedingly, viewing the question in that light alone, whether either
of those works would be benefitted in the end, by the measures proposed. On the
contrary, apart from all constitutional impediments, there is reason to apprehend
that a further increase of the pecuniary liabilities of the state, direct or indirect,
legal or equitable, absolute or contingent, would defeat the very ends in view, by
impairing the credit of the state, and diminishing the value of its public securities.
There is another point of view under which the subject is to be considered. It is
contended that the state, by the issue of the proposed certificates, will incur no
obligation, excepting that of applying the surplus revenues of the canals to their
redemption. In other words, the state is to receive money from individuals, and
apply it to its own use, without incurring any obligation to refund it, if the revenues should fail. In an individual transaction, a court might not hold the party thus
benefitted responsible, if he had taken the precaution to fence himself in with the
disclaimers of liability contained in the bill.  But in a public transaction, there can
be no doubt as to the general judgment which would be pronounced upon it. The
state would be liable, under any fair and equitable view of the subject. It is difficult to conceive how a statesman should take a different view of the rule of public
obligation.
For all practical purposes, the disclaimers contained in the bill, as to the state's
liability, may be regarded as near akin to those declarations which railroad and
steamboat companies sometimes make: that they will not be answerable for articles
transported by them, though the law holds them responsible as common carriers.
Will it be admitted that the state is equitably, though not legally, bound to refund
these loans or deposits? This admission would involve the absurd conclusion, that
the restrictions in the constitution were designed to prevent the contraction of legal,




19
and not equitable, debts. There is one view, indeed, under which the state would
not be liable to repay those loans or deposits-that the certificates were issued in
violation of the constitution. This is my view of the subject. I should, nevertheless, hesitate long, before I could consent to place the defence of the state against
them, on a ground which would call in question the intelligence or good faith of the
Legislature. The reputation of the state is vitally concerned in the maintenance of
its credit; and it would be a painful alternative, to escape a pecuniary liability for
money expended for its own benefit, by impeaching the deliberate action of the
Legistature, as unwarranted by the unconstitutional compact.
Under any point of view in which it can be considered, I cannot doubt that the
people of the state, when they shall have had time to examine the measure under
review, will regard it as a device to evade the salutary restraints of the cons titution, by embarking in a system of disbursements, against which those restraints
were expressly designed to guard. And it is worthy of the serious reflection of
every legislator who is to pass judgment upon the measure, that the restrictions
referred to were pressed upon the convention by Mr. Hoffman, who framed them,
for fear, to use his own language, that "the Legislature might, without them, in
some way or other, by some contrivance, take these [canal] revenues, instead of
resorting to direct taxation." " Unless we make some provision of the kind," he
added, " there will be large debts, and these debts will fasten themselves upon the
future surpluses of the canals." The very " contrivance" which he deprecated, and
against which the proposed restrictions, adopted by the convention, under the
influence of his reasonings, were intended to protect the revenues of the canals,
has, after the lapse of five years, found form and vitality in the bill before you.
There is one point more on which I cannot forbear to say a single word. It is the
opinion of every sound financier with whom  I have conversed, that the use authorized to be made of the proposed certificates as a basis for the circulation of bank
paper, is uncalled for by any public necessity, and dangerous in its tendency. The
paper currency is already greatly inflated-so much so that a disastrous reaction, at
no distant day, is regarded by many as highly probable, if not certain. Under these
circumstances, fair business men deprecate all further expansion. Indeed, I believe
very few persons in this section of the state, excepting speculators, regard this provision of the bill with favor.
I regret that I have not time to elaborate or enlarge on these views, as I am just
going again into the country. I can only add, that the friends of a sound and solvent
system of finance, seem to be periodically called on to resist schemes to involve the
state in new expenditures, to the great detriment of its interests and credit. Whatever may be the fate of the bill, I earnestly hope our political friends may be united
and firm in resisting it. How much cause should we not have to congratulate ourselves, seeing that our opponents have the majority in both branches of the Legislature, if the sound men of both parties, disregarding minor distinctions, would range
themselves on the side of the constitution, and of a prudent administration of our
finances, and maintain for our great and noble state, the high character she has
earned, of late years, as a carful guardian of her own caredit, and a regulator, by the
influence of her example, of the financial systems of her sister states.
I am, dear sir, in haste, truly yours,
Hon. D. C. LE RoY.                                      JOHN A. DIX.




Opinion of the Attorney-General.
ATTORNEY-GENERAL'S OFFICE, 
Albany, April 9, 1851.!To the Senate of the State of New York:
I have the honor to acknowledge the receipt of the following resolution, adopted
by the Senate on the seventh of April inst:
Resolved, That the Attorney General be reqll ested to report, within three days, to the Senate, whether
in his opinion the engrossed bill from the Assembly, to provide for the completion of the Erie Canal
Enlargement and the Genesee Valley and Black River Canals, conflicts with the provisions of the
Constitution.
The questions submitted for my opinion are exceedingly grave and important, and
deserve the most careful and thorough examination. No man should be willing to
hazard an opinion on such a subject, without patient thought and faithful research,
justice to himself, to the subject, and the people demand it; but, the time limited to
my use in the resolution, invaded as it has been by other and unavoidable official
duties, has necessarily rendered it impossible for me to give these questions the
attentive examination I desired and they deserved. I have, however, thrown a few
suggestions into a form, quite crude, it is true, and submit them to the Senate, in
answer to the resolution.
On examining the bill transmitted to me by your honorable body and to which
the resolution points, it occurred to me that its provisions might possibly conflict
with sec. 10 of article 1 of the Constitution of the United States, which, among other
limitations of the powers of the States, declares that "no State shall emit bills of
credit."
Are the " Canal Revenue Certificates" authorized by the 2nd section of this act,
bills of credit, within the meaning of the Constitution?
1. They are drawn on the credit of a fund which has no present existence, and
which is uncertain in the nature of things. The holder relies and must rely on the
faith of the State and on its obligation to provide this fund. The certificate is
therefore based on the credit of the State.
2. They are negotiable by delivery merely in form, they are payable to A. B. or
his assigns.-Delivery of a chose is an assignment, and passes all the interest to the
payee.
3. They are intended to circulate through the community for its ordinary purposes
as money, and are redeemable at a future day. The bill makes them receivable in
payment of labor on the public works.
4. Superadded is the ability of the holder to re-deliver them to the State and thus
convert them into bank notes or bills, to be employed as the ordinary circulating
medium of the country.
In the case of Craig et. al., vs. The State of Missouri, 4 Peters, R. 431, Chief
Justice Marshall, in delivering the opinion of the Court, thus describes "bills of
credit."  "In its enlarged and perhaps literal sense, the term'bill of credit' may
comprehend any instrument by which a State engages to pay money at a future
day; thus including a certificate given for money borrowed. But the language of
the Constitution itself, and the mischief to be prevented which we know from the
history of our country, equally limit the interpretation of the terms. To'emit bills
of credit' conveys to the mind the idea of issuing paper intended to circulate through
the community for its ordinary purposes as money, which paper is redeemable at a




21
future day." The friends of this bill say that these certificates are not given for a
loan, they are not evidence of a deposit, they create no liability, but are given by the
vender on a sale of his property, to a vendee, as evidence that the vendee is entitled
to the thing he purchased when it comes into existence. Looking beyond that
mysticism to the real nature of the transaction, to my mind these amphibious certificates very strikingly resemble the Missouri certificates which were pronounced to
be " bills of credit." They differ in denomination, but in most other respects agree.
The Missouri certificates were issued on a deposit of money or its equivalent; so
are these issued under the authority of this bill. Those rested in an ample fund for
their redemption; nominally so do these -Those bore a certain rate of interest; so
do these. Those were issued in denominations convenient for the ordinary wants of
the community; so are these. Those were receivable in payment of taxes, and the
salaries of public officers; these are receivable in payment of labor on the public
works, and thus far the bill makes them currency. This is the immediate parallel
of the two cases, and it is significant, but the parallel is decidedly to the disadvantage
of the New York certificates, when, by passing through the transmuting crucible of
legislative ingenuity, they become bank bills and form the ordinary circulating
medium of the country. No such contrivance can change their character, and if, in
any stage of their existence, or any condition they may assume, they may come in
conflict with this 10th section, they are void. Speaking of the Missouri certificates,
Chief Justice Marshall says: "Had they been termed'bills of credit' instead of'certificates,' nothing would have been wanting to bring them within the prohibitory
words of the Constitution. Can this make any real difference? Is the proposition
to be maintained that the Constitution meant to prohibit names and not things?
That a very important act, big with great and ruinous mischief which is forbidden
by words most appropriate for its description, may be performed by the substitution
of a name?  That the Constitution, in one of its most important provisions, may be
openly evaded by giving a new name to an old thing?  We cannot think so. We
think the certificates emitted under the authority of this act, are as entirely'bills of
credit' as if they had been so denominated in the act itself."
I have already suggested the striking analogy of the two cases, and if the case
cited is authority, it is difficult to lift the certificates to be issued under the authority
of this bill, out of it, and I am not aware that the authority of that case has ever
been doubted.
If these certificates shall be declared to be within the prohibitory words of the
Constitution of the United States, some anxiety may be felt, in certain quarters, for
the stability of our present system of banking, but there is no occasion for alarm.
The stocks which have heretofore been deposited, or which may be deposited in
pursuance of the general banking law, as security for bank circulation, have been
legitimately created.  They are recognized by the Constitution, and were issued
upon actual and bona fide loans to the State Government. They do not contravene
the Constitution of the State or United States, and are as enduring as the Constitution itself.  The faith and credit of the State are pledged in the most solemn manner, for their redemption.
They stand upon a footing entirely different from  certificates, issued upon the
deposit of money with the Comptroller, accompanied by a declaration that the State
is not thereby made a debtor, and the deposit is not a loan of money. Stripped of
the obscuring machinery of the bill, this pretended transaction of sale is as transparent as the dew drop. A. deposits one hundred thousand dollars with the State, and
declares that it is not a loan nor to be treated as a loan. He receives a certificate,
declaring that he is entitled to receive one hundred thousand dollars from the State
in twenty-one years, and semi-annual interest at 6 per cent, and strange as such a
transaction may appear, both parties all the while insist that it is not a loan or
a deposit. On receiving this hermaphroditic certificate, he immediately delivers it
to the Comptroller, and receives in its stead one hundred thousand dollars of bank
bills, to be used as currency.
It is clear that the one hundred thousand dollars of bank bills rest on the one
hundred thousand dollars deposited as the security. If the certificate is no evidence
of debt, and the transaction has none of the characteristics of a loan, the certificate
might be wiped out, without at all affecting the nature of the transaction. No
legerdemain can change the thing, there it stands and will stand, in bold relief,




22
all the opinions of all the wise men of the world to the contrary notwithstandingThe intermediate certificate is a most clumsy contrivance to evade the Constitution;
but the Constitution does not war upon names, or, in the language of Chief Justice
Marshall, " it does not prohibit names."  Without the intervention of the " certificate," all will agree that the transaction would be a violation of the Constitution, on
the hypothesis that no loan is made and no liability created. If such an hypothesis
can be predicated of this bill, then I maintain that the certificate is wholly umimportant, and the bill unconstitutional.
If the deposit creates a debt or liability on the part of the State, it is by no means
clear that the transaction is not within the prohibitory words of the Constitution; the
certificate itself is not entirely free from this difficulty, and while it may, by a single
contemporaneous act, be converted into a circulating medium, it is almost, if not
entirely, impossible to avoid the constitutional prohibition.  I confess that I have
not examined this question with sufficient care to pronounce definitely upon it.  I
desire to call the attention of Senators to it, and I doubt not, that they will satisfy
themselves that the paper authorized to be issued by this bill is not prohibited by
the Constitution of the United States, before they yield their assent to this enactment.
There is, however, another constitution, which the oath of most public officers
requires them to support, and which cannot be knowingly over-rode in the passage
of bills, without criminality; and it is always important to inquire, " is this bill
opposed to the Constitution of the State of New York?"  Is this particular enactment prohibited by it?
This inquiry, it seems, was suggested at the very outset, in connection with the bill
"to provide for the completion of the Erie Canal enlargement, and the Genesee
Valley and Black River Canals;" for a very elaborate opinion of a distinguished
jurist, concurred in by two eminent members of the legal profession, accompanied
the report of the committee, by which this bill was originally introduced into the
Assembly.  It is not a matter of surprise that this unusual precaution, to fortify a
bill in advance, by the written opinion of eminent men, should have been taken in
this case, for nobody but a singularly bold man, would have ventured upon such an
expedient as is presented in this bill, however urgent the necessity, after reading
the Constitution which he had sworn to support, until his own doubts and convictions were removed by the authority of "great names."  These doubts, it seems,
were silenced by an ingeniouslinterpolation of a section into the Constitution, which
the instrument itself does not contain, and which the author himself admits is composed of synonims, framed for the occasion, by the substitution of " synonymous and
equivalent expressions"  After having made a Constitution to meet the bill, it is
easy to find that the bill agrees with the Constitution.  In examining this important question, I find myself obliged to test its provisions by the Constitution as it is:
as the convention framed it, and the people adopted it. I do not feel at liberty to
depart from it, to wrest and mutilate its context, and to construct out of the fragments, a provision consistent with pre-conceived opinions, or necessary to the
attainment of a particular end.
The main question is, is this bill in conflict with any of the provisions of the Constitution of this State? In construing constitutions, " the safest rule of interpretation
will be found to be to look to the nature and objects, of the particular powers, duties,
rights, restrictions and limitations, vwith the aids of cotemporary history, and to give
to the words of each such operation, and force, consistent with their'legitimate meaning, as fairly to secure and attain the ends proposed." To ascertain the proper and
legitimate meaning of such an instrument, words must be understood in their ordinary
sense, and sentences must be read as they stand; the framers of the instrument must
be supposed to have used the language of the country according to its natural import; and courts and legislatures must read and understand it as it is read and understood by the millions. Applying these rules of construction, it is important for us
to know what were the objects in view, and the ends to be attained by the 7th article
of the Constitution. This must be gathered from the instrument itself; by a correct
reading of each independent sentence; by a comparison of its parts, one with another,
and by the aids of cotemporary history. The language of the instrument is unequivocal. The first great object of the provisions of that article, as declared by itself, was
to secure the speedy and certain payment of the existing debt of the State, and to




that end, certain means of the State were placed beyond the reach of delegated power, and sacredly dedicated to that object. The motive which influenced this object,
secured the next. It was reasonable to suppose that the payment of one debt, would
be no possible advantage to the community, unless the creation of a future debt was
prohibited. The next object, therefore, was to remove from the Legislature the power
to create a State debt. To that end the Constitution declares, (sec. 12,) " Except the
debts specified in the 10th and 11th sections of this article, no debt shall be hereafter
contracted, by or on behalf of this State, unless such debt shall be authorized by a
law for some single work or object to be distinctly specified therein; and such law
shall impose and provide for the collection of a direct annual tax, to pay, and sufficient
to pay the interest on such debt, and also to pay and discharge the principal of such
debt within eighteen years, from the time of the contracting thereof." This law shall
not take effect unless adopted by the people at a general election. The debts authorized in the 11th section, are "debts contracted to repel invasion, suppress insurrection, or defend the State in war," and the 10th section allows the State "to meet
casual deficits or failures in revenue, or for expenses not provided for,"-to contract
debts, which shall not at any time, singly or in the aggregate, exceed one million of
dollars. These provisions show the object to be accomplished, and how effectually
that object is secured.
The third great object of this article was the completion of the public works which
were suspended by the financial pressure of 1842. The convention was deeply impressed with the importance of the certain completion of these works, and as speedily as could be done consistently with safety to the credit of the State, and with
justice to the public creditors. The patriotic devotion of the members of that body,
to the true interests of the country, is not to be questioned. They believe, (and the
people nobly responded to that belief,) that financial integrity, was the first duty of
a free people; that having met the just demands of the public creditors, the next imperative duty was to protect the citizens against the abuse of delegated power, and
posterity against the grinding and unjust oppressions of the past. These objects secured by the most explicit provisions of the organic law, their attention was turned
to the protection and improvement of public property. No hostility was manifested
or could be felt, towards these works; they are the pride and reliance of the State.
We point to them as noble monuments of the energy, sagacity, public spirit and
perseverance of a free people.  We claim them  as the legitimate achievements of
free institutions, and the devotion of the convention to the accomplishment of what
is everywhere regarded as a sacred duty, is signally manifested in the Constitution
which it framed. After meeting the claims of twenty-two and a half million of
State debt, and securing public credit, by imposing needed restrictions on legislative
power, the remainder of the annual revenues were sacredly dedicated to the completion of these State works. This provision is contained in the third section of this article. These are the objects sought to be attained by this article is apparent from
the article itself.
But I am willing to look beyond the article, to the history of the times, in search
of the occasion and necessity of its adoption, in aid of its true interpretation. I am
desirous to ascertain, if possible, whether there was anything in the history of the
eight or ten years anterior to the convention of 1846, calculated to originate a new
provision of the fundamental law, like the 7th article of the Constitution. Mr. Spencer has adopted this course, and I think has shown himself as faulty in his historical
recollections, as he is sophical in his reasoning. He says " great apprehensions were
entertained of the reckless creation of large debts for the accomplishment of objects
that would not reimburse the expense, and that thus the people would be ultimately
subjected to heavy taxation to repay the sum so borrowed. The apprehensions never
embraced works which would certainly and inevitably pay for themselves.  It was
confined to those which might produce taxation."
It is certainly to be regretted that a contemporary of the terrible financial struggle through which this State passed from 1838 to 1842, should, after the lapse of
less than a decade of years, have ventured upon remarks like those above quoted.
Mr. Spencer was a distinguished actor in the exciting and oppressive scenes of 1840
and'41, and no man knows better than himself, the cause of those "great apprehensions" of which he speaks. They were not confined to any particular works or
class of works, but grew out of the policy of the State and its consequences.  I affirm




24
without the possibility of successful contradiction, that it was the "new impulse,"
"the more speedy englargement," and the rapid accumulation of State stocks consequent thereon, which produced these "great apprehensions," prostrated the means
and credit of the State, and sent her stocks down in the market to a condition of
ruinous depreciation, under which no government can live. These "apprehensions"
were the legitimate consequences of the policy as a system of finance, and this
system embraced all the canals of the State. It was the over-stimulated superabundance of enlargement scrip, and Genesee Valley and Black River scrip, created by
the false promises of visionary men, whose opinions, unfortunately, were predominant in the Legislature, that begat these "great apprehensions."
No other State work was then in progress, no other scheme was then in contemplation, and it is idle, nay, worse than idle, to say that these apprehensions embraced
any other works than the three canals provided for in this very bill. If subsequent
history was silent, I would repose on the well-remembered calamities of the three
years next preceding the year 1842, in vindication of my historical accuracy, but
fortunately the legislation of the year 1842 was based on those very calamities and
the urgent necessities of the State growing out of the too rapid prosecution of the
enlargement and the unfinished canals.  At the opening of the session of that year
these apprehensions had grown to a crisis which could not be passed, and these
works which " would certainly and inevitably pay for themselves" were stopped
from the absolute and irresistible necessities of the case, and that very taxation, the
fear of which lay at the foundation of these "great apprehensions," was from the
same absolute necessity resorted to. The bill usually denominated the "stop and
pay bill" answered the most sanguine expectations of its friends, and the people
submitted to its exactions with cheerfulness, because they saw in it an earnest that
the faith and credit of the State would be preserved, and in evidence of returning
financial sanity in the representatives of the people. Confidence revived, and the
disreputable spectacle of the Comptroller of the State of New York shining " on
change" in pursuit of short loans at fifteen per cent discount, and seven per cent interest, no longer mortified the just pride of the citizens of a great state.  Nothing
is more historically true than that the financial policy of the years 1838, 1839, 1840
and 1841, originated the convention of 1846. The principal object of the convention
was to incorporate the substance of "the people's resolutions" in the constitution,
and thereby impose restrictions on the debt creating power of the Legislature. This
was one of the objects of the seventh article, and if that object was not accomplished,
the convention was a signal failure.
Having been honored with a seat in that body, I think I may speak with some
confidence of the views and opinions of the members of it, with regard to the
financial policy to be adopted as a part of the fundamental law. When I say, that
not a member of that body supposed, that any power was left with the Legislature
to contract debt, (beyond the million which was designed as an elastic provision to
meet unexpected contingencies,) except in the mode prescribed in the Constitution
itself. I believe the statement will be concurred in by every member who was in
his place while the 7th article was under discussion. In corroboration of this statement I appeal to the published proceedings of the convention. There was no compromise of the cardinal principle of compelling a submission to the people of every
project for the creation of a debt, beyond $1,000,000.
I shall assume, notwithstanding Mr. Spencer's running philological commentary,
on the words " applied" and "manner," that the convention intended to prohibit
the creation of any debt by the Legislature, and the anticipation of any of the
revenue of the State, except in the cases specifically provided for, and that it employed apt words to accomplish that object. 1st. Does this bill create a State debt?
and 2nd. Does it anticipate the revenues of the canals, which are by the Constitution required to be applied " in each fiscal year" to the Erie enlargement, and to the
unfinished lateral canals?
What is a debt? When may a State or an individual properly be said to be i
debt?  I answer when he or it, is under a legal or equitable obligation to pay
money, or its equivalent, to another at the present or any future time; and this
notion rests in the moral sense of mankind. The obligation to return value for
value, is coeval with the idea of a separate or individual estate; it is of very great
antiquity, and has found a place in the domestic polity of almost every nation under




25
the sun, civilized or savage. I know of but a single instance of the ability of a
nation to borrow largely, and with such consummate ingenuity as to create no debt;
but unfortunately for the example, the ill-gotten gold and jewels having been
wrought into an object of idolatry, were ground to powder and strewn upon the
waters, and the people were compelled to drink of the bitter waters.
Mr. Spencer says, "the terms debt and credit are reciprocal." Undoubtedly they
are, and when an individual parts with his title to a valuable thing to a State or
another individual, on the faith of future payment, he gives credit and the recipient
becomes the debtor. A promise to pay is no payment, a specific lien on a thing or
fund, from which future payment may certainly be realized is not payment; until
that lien has been enforced, the debt exists. No matter whether, by the stipulations
of the contract, payment is to be made from the general or a specific fund of the
debtor, the obligation to pay continues, and according to my old fashioned notions,
until that obligation is discharged, the relation of debtor and creditor exists.
Although a State cannot be sued in its own courts, this circumstance does not change
the relation of the parties. At the present day, all debts honestly contracted rest
against the property and not the person of the debtor, and against that property in
severalty. It must be sold, article by article, and no more can be sold than sufficient to pay the amount of the debt. A State cannot repudiate its debts, it must
pay them-its property and the property of the citizens stand constantly pledged
for its honor, and when it receives the money of an individual, no matter how
vehemently it may protest against a general liability, it must pay it. The obligation of a State rests on the highest considerations of honor and integrity, for this is
the only security of its creditor, and to deny payment on a clumsy and disingenious
technicality would cover it with eternal disgrace.  Such an idea is not at all
admissible.
Where a State is concerned, it is idle to talk of a sale, or of a specific lien on its
unearned and anticipated revenues. It takes the money of the citizen, call it borrowed or not, and pays or expends it for the general good, it goes into its treasury,
and it must pay, yes pay it again. It owes the amount, it is a debtor for it, and no
legislative trickery, can convert it into anything but a debt.
The advocates of this scheme are driven to extremities to maintain that this bill
creates no debt. The reasoning on which that notion is based is alike peurile and
disreputable, and ought never to be heard in the halls of legislation. It is this
" So where a mortgage is given without any covenant, or other engagement to pay,
no debt is created, and the only remedy is on the property mortgaged;" " so where
there is a sale, with the option of re-purchasing at an advance price, no debt is
created." I would ask the author of the above extract, what does the State of
New York mortgage by this bill? What does it sell with the right to re-purchase
at an advanced price? It is a certificate given on the loan, deposit or delivery of
money to the State, declaring that the person delivering it is entitled to receive the
the amount delivered (if that is the least offensive word,) in 21 years, with interest
semi-annually, until paid, a mortgage? Does such a certificate entitle the State to
re-purchase it, or the surplus revenues of the canals, at an advanced price? No, it
is a loan, a naked, bold, palpable loan of money on the credit of the State, to
which it is loaned, and nothing else. But suppose it to be a mortgage; is the position of the learned jurist correct? Clearly not. A specific lien on an article
without covenant to pay, as in case of a mortgage on real estate, without covenants, creates a debt of the most solemn kind. The want of covenants only effects
the remedy.  The creditor must be satisfied with the property mortgaged, for his
debt. The courts have never held that an unsatisfied and unforeclosed mortgage,
without a covenant to pay, created no debt, and they never will be guilty of any
such folly. The mortgage itself creates a debt, (the very name of the instrument
conveys the idea of debt, and a pledge for payment) on it the debtor pays interest,
and finally the principal, or he loses his property. There can be no such thing as
interest and principal without debt, and if the debtor does not pay the interest and
principal, the lien is foreclosed, and the property sold; this is the creditor's remedy.
If it sells for enough the creditor realizes his debt; if for more, the overplus belongs to the debtor. The law calls a debt thus secured a mortgage debt, in contradistinction to a simple contract debt. Before foreclosure the debtor owes the whole
amount; after foreclosure, the balance remaining after applying the proceeds of




26
sale, if there is a covenant to pay; if there is no covenant, no personal action will
li e to recover the balance, and this is the length and breadth of the principle.
But if the mortgage should contain a covenant that the mortgaged premises
should, on foreclosure, produce the full amount of the mortgage debt, I think it
would be difficult for the most accomplished ingenuity to show that the debtor
would not be liable for any deficiency that might arise on the sale of the mortgaged
premises.
If this transaction can, under any aspect in which it may be viewed, be regarded
as a mortgage of the anticipated revenues of the canals, it is accompanied by precisely such a covenant as I have described.
In my opinion the receipt of the money for which the " certificates" are to be
given, and the giving of the certificates, create a State debt.
A brief statement of the material provisions of this bill, will aid us in arriving at
a just conclusion as to its character, with reference to its constitutionality. The bill
finds the State in this condition: it is in want, or supposes itself to be in want, of
nine millions of dollars for present use, but the money is not in the treasury, and
cannot be obtained, unless the words " loan" and " debt" can be cheated out of their
ordinary signification. The State owns property, the annual income of which can
be safely estimated at a given sum, but the whole of this income is pledged by the
Constitution to certain specified objects; two millions five hundred thousand dollars
being pledged for the payment of the existing State debt and for the ordinary re
pairs of this property, and the balance to the Erie Canal enlargement and the
completion of the Genesee Valley and Black River Canals. The friends of the bill
deem it for the public advantage to anticipate this "remainder" pledged to these
canals, and to realize present money, by pledging them to such capitalists as may
choose to advance money on the credit of this fund, and the bill is drawn to effectuate this object.
The second section of the act authorizes the Comptroller to issue " canal revenue
certificates," of denominations from fifty dollars to twenty thousand dollars, chargeable
on the surplus revenues of the canals, bearing an interest not exceeding six per cent.,
payable semi-annually, and the principal redeemable at a future day, not exceeding
twenty-one years. The form of the " certificate" is given, and it declares that the
holder or his assigns is entitled to receive a given amount of money at a given day,
and interest at a given rate, semi-annually, and the certificate contains an adenda, to
the effect that the holder shall receive his money and interest, " without any other
obligation, liability or pledge on the part of the State of New York, than such as is
contained in this act."  These certificates are to be officially signed by the Comptroller and countersigned by a transfer agent. When so signed, they are to be
thrown into the market in quantities of three million dollars annually, and sold
to the highest bidder, at not less than par. If not sold, canal contractors may
receive them at par in payment of labor. The proceeds of the sale of these certificates " shall be immediately paid into the treasury of this State," and are to be paid
out of the treasury in the same manner as the canal revenues are.
Section 3 appropriates the canal revenues for four years to the enlargement, &c.,
and afterwards to the payment of the interest and the redemption of the principal
of the "canal revenue certificates," until they are fully paid or bought up by the
State.
Section 5 authorizes the Comptroller to turn these illegitimate stocks into the
constitutional stocks of the State, by investing the canal revenue fund in stocks,
&c.
Section 6 authorizes banking on these " certificates."
Section 10 empowers the Legislature, after the year 1854, to direct the sum of
three hundred and fifty thousand dollars to be applied to the necessary expenses of
the government.
Section 11 requires the canal board so to regulate canal tolls, as to produce a' remainder" of at least eight hundred thousand dollars annually, until the canal
revenue certificates are fully redeemed.
Sec. 12 requires the completion of the canals in three years, and authorizes the
payment of contractors in the revenue certificates created by the act.
The above are the material features and provisions of the bill, and I regard it as
directly in conflict with the Constitution in its whole scope.




27
1. It creates a state debt in violation of the 12th section of article 7 of the Constitution.
The state throws its credit into market and sells it to the highest bidder. It is
true it pledges a fund for the redemption of its promises to pay, and declares that
it will not be liable beyond that fund; but it covenants that that fund shall be
amply sufficient to meet its engagements. Without this covenant, is there any
doubt that a state debt is created? but with it, the transaction contains a most
solemn guarantee to the creditor that he shall be paid. Suppose Mr. Van Rensselaer,
desiring to raise a sum of money for present use, should throw his notes into market
for sale, payable ten years after date, pledging therein the future rents of his leasehold estate for their payment, with a condition that he would not be liable beyond
those rents; would those notes in the hands of a purchaser, make Mr. V. R. a debtor,
and would they create a debt? If to this limitation there should be added a covenant that the rents should amount annually to a sum certain amply sufficient for the
ultimate payment of the notes and interest, the debt would become strictly personal,
but the transaction would create a debt, with or without the covenant. That part of
the canal revenue known in the constitution as " the remainder," is the money of the
people; it is the produce of property on which they have expended nearly
$50,000,000, some portion of which has been raised by direct taxation, its income is
raised by another mode of taxation, levied upon the citizens of the state, and is
often times onerous and oppressive. When that income is received, it goes into the
people's treasury, and is their property; any lien upon it or upon the future earnings of the canals, which in the Constitution are declared to be the property of the
people, becomes a debt in the strictest sense of the term; a debt which the property of
the people must pay. The state says to the creditors under this bill that it will pay the
debt, and pledges its property to that object, and covenents in the most solemn
manner that that property shall be sufficient to pay it. If this was an ordinary
transaction of bargain and sale, the thing sold should be delivered or be capable of
delivery. The vendee should be put in charge of the canals, and receive the income.
But the bill puts him in no such condition. The state receives the money and pays
it out to the creditor. Suppose the canal revenues should fall short of the anticipations of the present day, or some subsequent legislature believing this bill to be unconstitutional, should devote the canal revenues appropriated by it, to the purposes of
education, in what attitude would the public creditors holding " canal revenue certifcates" be placed? In either contingency, would not these men be creditors of the
state, and legally and morally entitled to payment of their debts? I think they
would. It is a solecism to say that the state can receive $9,000,000, agree to pay
interest on it semi-annually, and to pay the principal in 21 years, out of the earnings
or income of its property, and all this while owe no debt for it.
2. This bill is in conflict with sec. 3 of article 7 of the Constitution. That section
requires the application of the revenues remaining after meeting the appropriations
of the 1st and 2nd sections to the specific objects provided for to be made annually.
The language of the section will admit of no other construction. It is plain, clear
and explicit. It is as follows: "And the remainder of the revenues of the said
canals shall, in each fiscal year, be applied in such manner as the legislature shall
direct, to the completion of the Erie Canal enlargement and the Genesee Valley and
Black River Canals until the said canals shall be completed." This section to meet
Mr. Spencer's construction should read as follows: "And the remainder of the
revenues of the said canals of each fiscal year shall," &c. As it stands when shall
the remainder, &c. be applied?  Obviously " in each fiscal year."  By whom  are
they to be applied? By the legislature of each year. The time of the application
is specified, it is not left open to doubtful construction. It "shall" be "in each
fiscal year." There is no occasion to resort to lexicons or lexicographers for the
signification of the word " applied"  It is a word of very common use, and its
meaning well understood, and standing where it does in the sentence it can mean
but one thing, and that is that this annual "remainder" shall be annually used in
the completion of these public works. The object and the time of the use are both
specified, and cannot be changed by construction. This view is strengthened by the
concluding words of the sentence, " ntil the said canals shall be completed." When they
are completed, the application of the "remainder" to that object shall cease, not
when the debt contracted for their completion shall be paid, but when "the said
canals shall be completed." If these canals are completed in three years does not




28
this "remainder" became relieved from this constitutional dedication, and subjected
to the disposal of the legislature. If they do, the intention of the convention is violated. and such is not the reading of the Constitution. That instrument requires
this " remainder to be applied in each fiscal year to the completion of these works,
until they shall be completed."  When this section was under discussion, calculations were made by several members of the convention, to ascertain in what time
the canals would be completed, by an annual application of this remainder, and in
order to secure as large a " remainder" as possible, only $200,000 were given to the
general fund for necessary expenses, and the pledged funds in the 1st section were
cut down from $1,500,000 to $1,300,000. No man supposed that this remainder
could, consistently with the language employed, be anticipated, nor can it, without violating the plain unequivocal language of the Constitution.
By referring to sections one and two of this article, senators will see that the
same terms are employed, in relation to the contributions to the sinking funds.
In section 1, the sum of $1,700,000 "in each fiscal year," &c., and shall be sacredly applied, &c.; and in section 2, $1,500,000 " in each fiscal year," &c. I trust
it will not be contended that the State could, by issuing and selling " sinking fund
certificates," anticipate these pledged funds, and convert them into ready moneypledging the fund, and the fund only, for the ultimate redemption of the new certificates. If such a contrivance could be resorted to, certainly no one possesses the
hardihood to say that the State had wiped out her entire debt by the operation. A
strong temptation to this course is apparent, in the fact that"a premium of from 10
to 20 per cent. might be anticipated to arise on such a sale, and the transaction
would be quite as constitutional as the scheme contained in this bill.
I beg to call the attention of senators to the last paragraph of section 3 of this
article, as it has a material bearing on the proper construction of the words " shall in
each fiscal year," in the foregoing part of the section. This paragraph provides for
a diversion of $350,000 annually to defray the necessary expenses of the government, but this cannot be resorted to until eight years from the adoption of the Constitution have expired; from that time until the canals shall be completed, or the
debts paid, this diversion cannot exceed $350,000 annually, but after the happening
of either of these events, the sum may be increased to $672,500 annually-clearly
contemplating that, under the annual appropriation and application of this " remainder," the canals would not be completed in eight years, and that there would be a
period between the expiration of the eight years and the finishing of the canals,
during which this $350,000 might be used, and such, beyond all doubt, was the settled intention of the convention. This provision is utterly inconsistent with the
construction which is indispensably necessary to uphold this bill.
Mr. Spencer has attempted such a use of the word " manner," found in this section, as willjustify the passage of this act. But when it is remembered that the
time and object of the application are specified, the discretion left to the Legislature
to prescribe the' manner" of doing it, is subject to these precedents: The Legislalature may direct what distinct portion of the " remainder" shall be applied to each
of the specified works, how it shall be employed in the construction of the works,
what portion of each work shall be first constructed, how locks shall be built, &c.,
&c.; in short, how, or in what manner, this money shall be applied, in each fiscal
year in the construction of these works.
Legislative power in a free government, is necessarily perpetual. The changing
circumstances of such a country as ours, requires that its sessions should be annual.
The Legislature of this year cannot rightfully judge of the wants and the interests
of the community at any given period of the future, nor can it tie up or foreclose
the legislative power of the State for a quarter of a century to come. No men
better understood this cardinal principle of legitimate government, than the members of the convention, and intending to confine the legislative powers to the necessities of the present, they denied it the power to bind the future. The most irresistible inclinations of present power to bind the future, have always been manifested
in the constant accumulation of public debt andfurther burthens.  Admonished, as
we were, by the history of every civilized government of which we have any knowledge, we saw the absolute necessity of restraining, within very narrow limits, the
power of the Legislature to contract debts, and even the people, in adopting the
Constitution, bound themselves not to contract debts, without making ample con



29
temporaneous provisions for speedy payment. This 07th article was intended to
control the prevalent mischief of governments, of loading prosperity with burthens
not their own; but if the convention and the people have both failed to accomplish
that great object, the principle itself may as well be surrendered as utterly impracticable.
3d. It is believed that this bill is inconsistent with section six of the seventh
article of the Constitution.
By the bill, the canal revenues are pledged, or mortgaged by certain public creditors
for a probable period of twenty-one years; certainly for a period but a little short
of that time; and the management of the canals is so tied up, that they must produce a remainder of revenues applicable to the payment of the debt created by the
revenue certificates of at least $800,000 annually.  The term  canal, I trust, does
not signify, simply, the ditch in which the water flows, but all its incidents and appointments, including the revenues. The canals cannot be encumbered, or disposed
of by sale, lease, mortgage, or in any other manner: and by purity of reasoning,
the only valuable property of the canals, to wit: their revenues, cannot be disposed
of in any like manner.
If this Legislature can sell the canal revenues for twenty-one years, it can do so
for five hundred, and by a pledge that a certain amount of surplus revenue shall be
annually received, not only create a stupendous debt, and perpetuate the tax upon
trade, by heavily taxing the highway, but deprive the state of that management of
the canals contemplated by the Constitution. The state, in the sense here employed,
means the representative authority of the state-the Legislature-and it was thought
unwise, both for the interests of commerce, and of the community, to place the
canals under the constant protection and management of the representatives of the
people. They could judge, from year to year, of the state of the treasury, the wants
of the state, the effect of rivalry, and the necessities of every class, affected by the
imposition of tolls. This constant supervision was contemplated, when the Constitution placed the management of the canals in the hands of the state forever.
This bill not only mortgages the canal revenues for twenty-one years, but prescribes
such a condition in the management of the canals, as is wholly inconsistent with this
constitutional provision. Such seems to me to be the obvious effect of the provisions of this bill, and I respectfully ask the attention of senators to the subject.
4th. This bill is repugnant to section 8 of the 7th article of the Constitution.
The 8th section provides, that " no moneys shall ever be paid out of the Treasury
of the State, or any of its funds, or any of the funds under its management, except in
pursuance of an appropriation by law, nor unless such payment be made within two
years next after the passage of such appropriation act," &c. This bill makes a specific
appropriation of the surplus revenues in the years 1851, 1852, 1853 and 1854, to
the enlargement, &c., and after the close of the fiscal year in 1854, it applies, and
appropriates the whole of the surplus revenues, " at the end of each fiscal year," to
the payment of the interest on the canal revenue certificates as it falls due, and to the
redemption of the principal of said certificates, &c. This bill is intended to be complete
in itself, and does not contemplate any future legislation to carry it into full effect, in
all its parts. We are to test its constitutionality by an examination of its own provisions, without conjecturing what future legislatures may, or may not do. Without
a syllable of future legislation, a large share of the canal reveunes will be paid out
of the treasury under this bill, extending over a period of at least 10 years, and
probably of 21 years. It makes ample, and minute provisions, in detail, for the
receipt, investment, transfer and disbursement of the canal revenues, for the whole
period that the revenue certificates, or any portion of them, shall run.
Sections three, four and five of the bill, are in direct conflict with the eighth section of the Constitution, and cannot be upheld. The appropriations made by these
three sections, are also obnoxious to the latter clause of this eighth section-no
specific sum being appropriated, and the objects are too general and multifarious. I
do not claim the right, and perhaps, in the language of Mr. Spencer, " it would not
be respectful," in me to say, that this bill was obviously drawn to foreclose all
future legislation in reference to the canal revenues-that it was probably suspected
that some future legislature, mindful of its constitutional obligation, might neglect
to divert the pledged funds of the State from their constitutional destination, and
by that means fatally derange this mischevious theme-that it was important so to
Irame the bill that it could be carried out without the aid of the representatives




30
of the people, and plunder the treasury, ad-libitum, by the force of its own provisions-that if innocent individuals became public creditors, under its solemn
guaranties, it would be thought to be a monstrous violation of the public faith, to
interpose so rickety an " obstacle" as the Constitution to their prejudice, and thus,
from the necessity of preserving the public faith, the bill would be permitted to run
its course without interruption. These considerations are always potential with
governments, and they become doubly so when the strong bonds of interest encircle
the sinews of labor, and the leprous distilment of public corruption has penetrated
all classes of the commonwealth.
If this bill shall pass, in all human probability, nine millions of dollars
of bank bills, resting on the funds represented by these " revenue certificates" for
their basis and security, will be scattered broad-cast over the State, and will be
found in the hands of the people, who receive money in small amounts, and pay it
out for daily subsistence, as well as in those of the more active and enterprising,
who mould public opinion to their purposes, and direct it by exciting the apprehensions of the less intelligent. When such a combination of interests, much of it
honest but ill-directed, and much of it knavish and corrupt, shall be brought to bear
on this question, who will be found to stand by the Constitution and breast the storm?
Who will be found with courage commensurate to the crisis, to stand up in the Legislature of the state, and oppose the authority of the Constitution to the daring and
flagitious robberies of this bill? History answers, no man. No, not one!
5th. It is submitted that the 10th section of this bill cannot be constitutionally
adopted, at this time. Whether it can be in 1854, depends on a contingency that
cannot now be known, and the present Legislature can make no disposition of the
revenues, which may, or may not, be diverted to supply the deficiencies of the
general fund, until the period has arrived, when it may be determined that the unappropriated revenues will not be sufficient for the ordinary expenses of the government. The Legislature can make no binding provision on that subject, until the
year 1854. Although this section is not a very important one, nevertheless it is an
attempt to do what cannot be constitutionally done.
I have examined all the provisions of this bill, which the time allowed me by the
Senate has permitted; and.I have come to the conclusion, unhesitatingly, that the
whole scheme is a direct, open and palpable infraction of the Constitution. The
sections examined in detail, are harmonious parts of a system, and I hesitate not to
say, a system of bold and daring aggression upon the rights of the people, and one
which deserves the condemnation and reproach of all just men. The battle for
financial integrity was fought in this State in 1842, and again in 1846, and resulted
in the triumph of sound and correct principles. The war is again renewed by this
bill, but a new and deeply interesting element mingles in the contest. The preservation of a constitutional government is involved in this issue; and although it is by
no means the first attempt which has been made to overleap the barriers set by the
people, to protect themselves against the rapacity of irresponsible power, it is the
last effort which can be made in behalf of the fundamental law of the land.
The breach made by this bill is too wide to be closed or defended, and when the
pledged funds of the State can be invaded in very contempt of the Constitution by
which they are surrounded, and should be protected-and that too, by the men who
have solemnly sworn to guard this trust, and respect the instrument which declares
it to be " sacred," our hopes of the future perish within us, and our confidence in the
fidelity of the representative, and in the power of the Constitution by which he is
created, withers and dies. I have the consolation of being able to reflect, that
during the whole of this struggle, I have been upon the ramparts, and stood firmly
by the right, and now again I am cheered by your indulgence. Your kindness has
permitted me to declare my opinion of this measure. I have done so, boldly, but I
hope respectfully. I have done what I have conceived to be a solemn duty, and I
have an abiding conviction, that come what will, yours will be done also.
Respectfully submitted,
L. S. CHATFIELD,
Attorney General.




Protest of the Twelve Senators.
To THE HON. SANFORD E. CHURCH,
President of the Senate:
SI:-The undersigned members of the Senate of the State of New York, consider
the bill now about to be put to a final vote, authorizing a loan of nine millions of
dollars on a pledge of " the remainder of the canal revenues in each fiscal year," as
clear, direct and flagrant violation of the plain and intelligible financial provisions
of the Constitution.
The 12th section of the 7th article of that instrument, and which we were all
sworn to support, when we took our seats in this Senate, declares that, except the
debts specified in the 10th and 11th sections of that article, (which are debts to meet
casual deficits or failures of revenue, or for expenses not provided for, not exceeding
at any time one million of dollars, and to repel invasion, suppress insurrection, or
defend the State in war,) no debt shall hereafter be contracted by or on behalf of
the people of this State, unless such debt be for a single work or object, and a tax
be imposed sufficient to pay the principal and interest within eighteen years from
the time of the contracting thereof; and that every law authorizing a loan, shall,
before it takes effect, be submitted to the people at a general election, and be approved by a majority of all the votes cast for and against it at such election.
The sixth section of the same article declares that " the Legislature shall not sell,
lease, or otherwise dispose of any of the canals of the State, but they shall remain
the property of the State, and under its management forever."
The third section of the same article provides, that " after paying the expenses of
superintendence and repairs of the canals, and the sums appropriated by the first
and second sections of this article, (one million six hundred and fifty thousand to
pay our existing State debt,) there shall be paid out of the surplus revenues of the
canals, to the treasury of the State, on or before the 30th day of September in each
year, for the use and benefit of the general fund, such sum not exceeding two
hundred thousand dollars, as may be required to defray the necessary expenses of
the State, and the remainder of the revenues of the said canals shall, in each fiscal
year, be applied in such manner as the Legislature shall direct, to the completion of
the Erie Canal enlargement and the Genesee Valley and Black River Canals, until
the said canals shall be completed." The bill referred to, which is entitled an act to
provide for the completion of the Erie Canal enlargement and the Genesee Valley
and Black River Canals, clearly violates, according to our understanding, both the
letter and spirit of these provisions of the Constitution. It authorizes a loan of nine
millions of dollars, without submitting the law to the approval of the people, and
without imposing a tax to pay the debt created as the Constitution requires.  It
authorizes the creation of a debt of nine millions of dollars, and pledges the future
revenues of the canals, which are by the Constitution to be applied to their completion, for its payment. It creates an obligation or pledge on the part of the State,
so to arrange and regulate the tolls on all of our canals as to produce a surplus of at
least eight hundred thousand dollars in each year, until the Erie Canal enlargement
is completed, and after that, sufficient to provide a surplus of at least one million of
dollars in each year, until a sufficient sum shall have been collected and safely invested, to pay the sum borrowed, thus mortgaging the canals of the State, and
binding the State to impose tolls and taxes on transportation, on all our canals, so




32
as to produce, at least, a given amount of revenue to pay the mortgage, however
oppressive such impositions mav be to the forwarders or destructive to the trade
and business of our canals. Such obligations, contracted on the part of the state,
with its creditors, amount to a conditional disposal of the canals of the state,
and violate both the letter and spirit of that clause of the Constitution, which
declares that the Legislature shall not sell or otherwise dispose of the canals, but
they shall remain the property of the State, and under its managementforever.
The bill also violates those provisions of the Constitution which direct "the remainder of the revenues of the canals in each fiscal year," to be applied to their
completion.
It appropriates for years to come, a portion of the remainder of the revenues of
the canals to the payment of interest on money borrowed, instead of applying such
remainder in each fiscal year to the completion of the canals.  It pledges the
remainder of the revenues in each fiscal year for the payment of money borrowed,
and which, when borrowed and placed in the State Treasury, may be appropriated
with a less violation of good faith than it is borrowed, to other purposes than the
completion of the canals.
The bill also directs portions of the money borrowed, on a mortgage or pledge of
the revenues of the canals, to be applied to the payment of the interest on the
money so borrowed, thus recognizing and establishing the principle that the state
may borrow money and create debt to any extent in its power, on a pledge of the
future income of our canals, and may increase that debt by other loans on like security,
to pay interest on the money previously borrowed, and may bind itself forever to
tax transportation on our canals to the extent necessary to pay the debts thus
contracted.
The establishment of this principle nullifies those provisions of the constitution
which plainly and expressly prohibit the Legislature from contracting debts, without
first obtaining the sanction of the people, and from in any way selling or disposing
of the canals, and may, in its results, impose on the State the obligation to tax
transportation on all our canals, by such high tolls as to destroy their usefulness, by
driving business into cheaper and untaxed channels of transportation, or else compel
the State to lay a direct tax on the people, to pay the money thus borrowed.
We are in favor of the enlargement of the Erie Canal, and the completion of the
Genesee Valley and Black River Canals, and we desire to have the work done in
the manner which the Constitution authorizes and requires, and we are willing to
submit the decision of that question to the people; but we will not consent, for the
purpose of accomplishing that or any other object, however desirable, knowingly,
to violate the Constitution and trample it under our feet.
If the policy of the democratic party, adopted in 1833, of enlarging the canal by
the application of the surplus revenues to that work, had been continued, the enlargement would now have been completed, and our State Debt so far reduced, that
the Legislature could at this time remove the greatest obstacle in the way of the
forwarder, high tolls.
We regret to say that this is not the first instance in which we have felt constrained to differ from the majority in the decision of an important constitutional
question, which this senate has been called on to decide. We allude to the decision
recently pronounced here, that a member of this body, duly elected and returned as
a member of Congress, with his consent, and not declining to accept the office, was
entitled to sit here as a senator after the commencement of his official term as a
member of Congress, notwithstanding the constitutional declaration, that " no person
being a member of Congress shall hold a seat in the Legislature." Whether the decision made by a majority of this body in that case, was in any degree influenced by
a desire on the part of the majority to retain the power in this body to carry this
and other favorite measures, we will not assume the right to determine, but will
leave the decision of that question to the impartial judgment of our constituents.
We have felt constrained by the obligation which we are under to support the
Constitution, to oppose the passage of this bill in every stage of its progress through
the Senate. We cannot but regard its final passage as a prostration of all the barriers
intended to be erected by the Constitution against the abuse of legislative power to
borrow money, contract debts, and impose taxes. It now seems that our arguments,
our appeals, and our remonstrances, are in vain, to arrest the passage of this bill.




33
Under these circumstances, we cannot consent, by longer retaining our seats here,
to be accessory to what seems to us a deliberate infraction of the Constitution under
which our government is formed, and by which it exists. All other matters before
the Legislature, when compared with this, sink into insignificance.  We regard the
preservation of the Constitution, in its full force and meaning, as paramount to all
other considerations, and we do therefore, for the reasons herein stated, as the only
means left to us to prevent the attempted prostration of the provisions of the Constitution restricting the debt-creating power of the Legislature, (that instrument
requiring a quorum of three-fifths [20] of all the members elected to be present on
the final passage of this bill), resign our offices respectively as Senators of this State,
and we submit the propriety and justice of the act to the impartial judgment of
those whose interests and rights we were sent here to represent and protect.
WM. HORACE BROWN,
Senator from the 1st district.
JOHN SNYDER,
Senator from the 8th district.
JAMES C. CURTIS,
Senator from the 9th district.
GEORGE H. FOX,
Senator from the 16th district.
SYDNEY TUTTLE,
Senator from the 17th district.
JOHN NOYES,
Senator from the 18th district.
WM. A. DART,
Senator from the 15th district.
CHAS. A. MANN,
Senator from the 19th district.
ALANSON SKINNER,
Senator from the 21st district.
HENRY B. STANTON,
Senator from the 25th district.
G. B. GUINNIP,
Senator from the 26th district.
APRIL 17, 1851.
To THE HON. SANDFORD E. CHURCH,
Lieut. Governor and President of the Senate:
I hereby resign my office of Senator of the State of New York, from the 20th
Senatorial district.
Your obedient servant,
A. C. STONE.
APRIL 17, 1851.




34
The Legislative Address.
To the Democratic Republican Electors of the State of New York:
FELLOW CITIZENS: The undersigned, democratic members of the Legislature during its recent session, now about to return to our homes, feel it our duty to give you
some account of the present condition of our State affairs, and of the manner in
which we have endeavored to discharge the important trusts committed to us. The
session of the Legislature which has just terminated in a sudden and unexpected
manner, has been, in many respects, of an extraordinary character, and will be remembered in the history of the State.
The executive, legislative and administrative departments of the government, are
in the full possession of a political party, whose doctrines and policy have ever been
antagonistic to good government, based on sound republican principles. That party
had, until the 4th of March, 17 of the 32 members of the Senate, and 82 of the 128
representatives in the Assembly. They from that time, by continuing Mr. Schoonmaker in his seat in the Senate, notwithstanding his being a member of Congress,
possessed uncontrolling power over the course and action of both branches of the
Legislature, and must be held responsible to the people for the policy pursued and
the measures brought forward and adopted, or rejected.
The Governor, in his annual message, recommended to the consideration of the
Legislature, various subjects of general interest to the people of the State; but such
has been the course of action, on the part of the controlling majority,that but few subjects of that character have received that careful attention which they deserved
from the representatives of the people. Subjects of a political or private nature
have engrossed more of the time and attention of the Legislature, than those of a
general and public character, and have exercised so pernicious and corrupting an influence on the whole course of legislation, that suspicion has been unavoidably cast
on its purity and integrity. The subjects of a general nature which have engaged
most of the attention of the Legislature, have related chiefly to the finances and internal improvements of the State, and matters intimately connected therewith. These
are always subjects of great importance to the whole people, and deserve and should
receive the careful attention of those whom they have sent here to protect their interests and guard their rights.
The party now in power has had uncontrolled possession of the State administration, for three out of the four years since our present Constitution was adopted, and
a brief statement of the results of their management of the financial interests of the
State during that period, cannot be otherwise than useful. The people, in the adoption of our present Constitution, incorporated into that instrument, such financial
provisions as would insure the certain and gradual payment of our large State debt
of twenty-two and one-half millions of dollars; and in that way, in a few years, relieve the transportation of property on our canals from high tolls, and at the same
time secure to the people ample revenues for the payment of the annual expenses of
government, and thus free them from the burthen of a direct tax, now imposed for
that object. It should not be forgotten that this large State debt, and the necessity
for a direct tax to support the government, have been imposed on the people of this
State by the whigs, when in power, departing from the financial policy always sustained and advocated by the democratic party.
The whigs, as a party, have always been distinguished both in the State and National administrarion, more for their ability and willingness to contract, than to pay




35
debts; and this marked feature in their character, seems to remain unchanged and
unchangeable. They have ever treated the financial provisions in our State Constitution, as " an obstacle across their path."  They seem to have held, that the "adoption of a Constitution, containing so many valuable provisions, could not be regarded
as an expression in favor of the financial article; and that that article was not rejected, because its rejection could only be purchased by the rejection of a Constitution, containing many, very many, wise and enlightened provisions."
Their actions have corresponded with their views as to the financial policy of the
government. The framers of the Constitution, and the people who adopted it, made
a sure provision for the certain but gradual extinguishment of our State debt, by
sacredly pledging, in the Constitution, one million six hundred and fifty thousand
dollars, annually, from our canal revenues, to that object; but the people of the State
cannot learn but with surprise, that, although this large sum has been annually set
apart and appropriated to pay our State debt in each of the four years since the
Constitution was adopted, the debt has, nevertheless, been diminished only the small
amount of $406,854. The official reports from the Comptroller's office, show that
our entire State debt on the 30th September, 1846, was $22,937,656, and that it was
on the 30th September, 1850, reduced only to the sum of $22,530,802.
You will very naturally inquire into the causes which have produced this result;
a result for which the party now in power is responsible. To us it seems clear, that
it has been produced by the bad administration of our finances. Money has been
used with a profuse and lavish hand, to reward followers, to benefit localities, and to
procure supporters of the party in power. The expenses of the general administration of the government, and of our canals, have been largely increased; old claims
against the Treasury, of doubtful obligation, have been revived, and finally allowed,
by persevering and combined pressure on the Legislature and Canal Board, and funds
dedicated by the Constitution to the completion of our canals, have been used for the
benefit of other localities, in violation of law.
But one abuse exercising a corrupting influence and strongly demanding the condemnation of the people, is that which has arisen from the great and unprecedented
increase in the expense of the public printing. The average annual cost of doing the
public printing for eight years, next preceding the 30th September, 1846, was $45,405.
But under the present administration, its annual cost has been greater by one hundred per cent., than the average of the eight years next prior to September 30th,
1846. This expense is paid out of what is called the General Fund of the State,
which is, in part, derived from a direct tax levied annually on the property of the
people. During the year 1848, ninety thousand dollars were appropriated and paid
for public printing. In 1849, seventy thousand dollars were appropriated and used
for the same object. In 1850, eighty thousand dollars were appropriated for the
same purpose, and there was paid out of the Treasury, from September 30, 1849, to
Jan. 1, 1851, a period of fifteen months, for the public printing, engraving and binding, over the sum of ONE HUNDRED AND SIXTY-SEVEN THOUSAND DOLLARS, leaving still
due on January 1, 1851, the sum of thirty thousand dollars for printing, as stated in
the annual report of the Comptroller, made at the present session of the Legislature.
This enormous absorption of the public money for printing, has arisen from the practice of ordering large editions of books and reports to be printed, having no connection with the proper business of legislation; and the last act of the Assembly was,
to postpone for twenty minutes, the motion to concur in the joint resolution for adjournment, so that a resolution could, in the hurry and excitement of the moment, be
pressed through for printing a large edition of the Documentary History of the State,
for the use of the members, at a cost to the Treasury, as estimated, of from thirty
to forty thousand dollars. This last act of the present Assembly, may justly be regarded as the crowning and closing act of the session, and as in some manner characterizing the majority who controlled its action in that matter.
The measure of the greatest importance to the people of this State, which has
been brought before the Legislature for its adoption, during its recent session, was
a bill to authorize nine million of dollars to be borrowed on a pledge of the " remainder of the revenues of the canals," for the purpose of completing, within three
years, the Erie Canal Enlargement and the Genesse Valley and Black River Canals.
It is proper that we should advert to the circumstances under which this measure
was brought forward, and its final passage unyieldingly insisted on.




36
The Governor, in his message at the commencement of the session, said, "It affords
me much satisfaction to congratulate you on the sound and healthful condition of our
State finances." From this official announcement, we were naturally led to suppose
that our financial condition was of the most prosperous character, and that all the
great interests of the State, as well as of our canals, were in the most flourishing condition. We were also told in the Comptroller's report, that the General Fund was
in " a healthy condition," and had been found sufficient to meet all the demands upon
the Treasury during the year, and that the balance of cash in the Treasury on the
30th September last, was $54,521, but on analyzing the statament of the condition
of the various funds, it was found that the money reported as in the Treasury on the
30th September, all belonged to the School and Trust Funds of the State, and that
there was not, in truth, a dollar of money in the Treasury on that day, out of which
any current expenses of government could be legally or constitutionally paid.
The canal funds of the State, it was also soon found, were in but little better condition. It was shown, by the reports of the State officers, that there were two millions four hundred and twenty-one thousand dollars of work under contract on the
Enlargement and Genesee Valley and Black River Canals, yet to be paid for, and
that there was not, on the 1st February last, a dollar in the Treasury from which payment could be made to the contractors, and that the sum of only $403,749 would, as
estimated by the Auditor of the Canal Department, be received into the Treasury
during the remainder of the current fiscal year, which could, under the Constitution,
be applied to the prosecution of the public works. The contractors were accordingly
notified that the work, which they had engaged to perform for the State, must be
suspended for want of means in the Treasury to pay.
The mismanagement of the State officers in letting contracts without means in
their hands to fulfil them, and the bankruptcy of the Treasury, could be no longer
concealed from the people of the State, unless some device could be invented to
borrow money by violating the safe financial provisions of the Constitution.
To submit the whole matter fully and unreservedly to the people, and ask them
to change the financial provisions of the Constitution, or to give their assent to the
contracting of a debt in the manner authorized in that instrument, would not meet
the exigencies of the case. The time required to obtain relief in this constitutional
manner, was too long, and besides, it was feared that the people would not be
willing to abandon the protection they had secured to themselves and their property
by the adoption of the financial provisions of the Constitution, or give their assent
to the contracting of a debt in the manner pointed out in that instrument for these
objects. Some mode must, therefore, be devised of obtaining money by borrowing
it for the use of the State, without contracting a debt, by or in behalf of the State,
for the money borrowed.  To perform this feat of legerdemain, certainly required
the nicest dexterity of " able jurists;" but still the trick was attempted to be performed by a bill introduced into the Assembly, entitled " an act for the completion
of the Erie Canal Enlargement and Genesee Valley and Black River Canals."
By the provisions of this bill, the Comptroller was authorized to borrow, on what
were to be called canal revenue certificates, nine millions of dollars, within three
years, on a pledge of the future surplus revenues of the canals, for the re-payment
of the interest and the principal, within twenty-one years.  And the State was, by
the bill, to obligate itself so to arrange and fix in each year the tolls on our canals,
as would, taking the average of the tonnage of the three preceding years, yield a
surplus of revenue, after setting aside the sums pledged in the Constitution for repairs
and the payment of our State Debt, of at least eight hundred thousand dollars in
each year, until the canals were completed, and then a surplus of at least a million
of dollars in each year, until the money borrowed should be fully paid. These
canal revenue certificates were to be issued in sums not less than fifty dollars, payable to the lender of the money or his assigns; and authority was given, by the
provisions of the bill, to make them receivable by the Bank Department, as security
for circulating bank notes, and also to the Canal Board to issue them to the contractor or contractors on the public works, in payment of the work performed for
the State.
The bill further provided, "that the Canal Commissioners shall, upon such terms,
and in such manner as the Canal Board shall direct and approve, contract for the
completion of the canals," but such contracts shall be awarded to such parties being




of sufficient responsibility, as shall agree to execute their work, so as to insure
the completion of the canals by the opening of navigation in the spring of 1854,
"terms which shall, in the judgment of the Canal fioard, be most safe and advantageous to the State." These extraordinary provisions of the bill indicate clearly the
real designs of the political jobbers who were its authors and advocates. The party
in power have a majority of one in the Canal Board, while two out of the three
Canal Commissioners are democrats.
It was necessary, therefore, to change the laws which have been in force for many
years in this State, by which the Canal Commissioners were required to award
contracts for the execution of the public works to the lowest bidder, irrespective of
their party attachments, so as to secure to the peculiar friends of the party now in
power the patronage arising out of the expenditure of nine millions of dollars, and
of the remainder of the revenues of the canals for twenty-one years, and thereby
save them from the political ruin which they perceive is rapidly approaching, to
prostrate and overwhelm them. Such a concentration of power and patronage, in
the hands of a few men, would tend to corrupt the purity of the elective franchise,
and would prove greatly destructive to the best interests of our system of internal
improvements.  Under the provisions of this bill, judging from the experience of
the past, it is fair to infer that contracts would have been made by the favor of the
Canal Board, only with those who would use the means placed in their hands, so
as in the best manner to sustain and perpetuate the power of the men by whose
partiality the contracts were awarded to them.
Although the nine millions of dollars were to be borrowed in three years, yet,
under the peculiar and extraordinary provision of the bill, contracts could have
been made, not with the lowest bidders for the work, but with such individual or
individuals as the Canal Board deemed of sufficient responsibility, and without any
security for performance, to do the entire work required in the completion of the
Erie Canal Enlargement and the Genesee Valley and Black River Canals; and in
that way the present Canal Board would have disposed of, pledged or appropriated,
the whole of the nine millions to be borrowed, as well as the surplus canal revenues
for the next twenty-one years.  This unprecedented job thus to be farmed out by
the present Canal Board, would have been used, as the canal patronage has been
used, solely for the perpetuation of the party now in power.
As your representatives, sworn to support the Constitution, which the people had
adopted for our guidance, we could not, according to our understanding of what
seemed to us its plain import and meaning, give any support to the proposed bill
for borrowing nine millions of dollars on a pledge of the future revenues of our
canals.
The twelfth section of the seventh article of the Constitution, declares that, except
as therein specified, no debt shall be hereafter contracted by or on behalf of this
State, unless such debt shall be authorized by a law for some single work or object,
which law shall not take effect until it has been submitted to and received the
assent of the people at a general election.
The sixth section of the same article of the Constitution, declares that " The Legislature shall not sell, lease, or otherwise dispose of any of the canals of the State,
but they shall remain the property of the State, and under its management forever."
The third section of the same article provides, that the remainder of the revenues
of the canals, (after setting aside the sums pledged by the Constitution for repairs,
and to pay our State Debt), shall, in each fiscal year, be applied in such manner as
the Legislature shall direct to the completion of the Erie Canal Enlargement, and
the Genesee Valley and Black River Canals, until the said canals shall be completed.
These provisions of the Constitution seem to us so plain, that no man can misunderstand or misconstrue their meaning. They were intended to guard and protect
the people against hasty legislation and corrupt schemes of public plunder, sanctioned
by faithless representatives in the Legislature, for the purpose of rewarding party
adherents, and perpetuating their own power at the expense of the tax payers of
the State.
The twelfth section before referred to, plainly declares that no debt shall hereafter be
contracted by or on behalf of the people of this State, except in the manner therein
authorized, and yet an attempt has been made, notwithstanding that plain declara



38
tion, to borrow nine millions of dollars under the pretence that no debt will be
thereby created. Our minds are not acute enough to understand how the State can
borrow nine millions of dollors on a pledge or mortgage of its own property and
for its own use, and agree that it shall be repaid with interest, and not owe a debt
for the money thus borrowed; nor are we able to understand how the Legislature
can mortgage or pledge the revenues of our canals without violating that plain
injunction of the Constitution, which declares that the Legislature shall not sell,
lease, or otherwise dispose of any of the canals of the State, but that they shall
remain the property of the State and under its managnment forever.
The third section of the Constitution has provided for the certain completion of
the Enlargement of the Erie Canal and of the Genesee Valley and Black River
Canals, by declaring that the surplus revenues shall, in each fiscal year, be applied
to these works until they shall be completed. This provision was agreed to by all
parties in the Convention which framed the Constitution as a compromise between
conflicting interests, and should be faithfully adhered to.
We have felt it was a duty we owed to our constituents and to the cause of constitutional government, to resist and defeat by every means in our power, the adoption
of a measure, which to us seemed a clear and wholly indefensible infraction of the
plain provisions of the Constitution. In our view it is better to have no Constitution of government than to have one which is set aside and trampled in the dust by
the people's representatives in the Legislature, whenever the interests or wishes of
the corrupt leaders of a party demand the deed to be done.
But we could not regard the adoption of the measure in question, irrespective of
the constitutional objections, as either wise or expedient. The bill in question
required the enlargement of the Erie Canal to be completed in three years. We are in
favor of the completion of that work, and of the other canals, at the earliest practical
period in which the work can be done under the provisions of the Constitution and
the circumstances of the case, but we do not believe that over 246 miles of the excavation on the enlargement, (185 miles of which is not yet under contract), can be
properly or economically executed in three years, when, in order to preserve the
navigation of the present canal, a great portion of the work must be done during
the winter months in this severe climate. The completion of the enlargement under
such disadvantages in doing the work, in the short period of three years, would probably cost nearer twenty than ten millions of dollars.
Since the resumption of the work on the enlargement, and on the Genesee Valley
and Black River Canals, in 1847, six millions twenty-three thousand one hundred
and fifty dollars of work, at the estimated cost, has been put under contract, and
payments made to the contractors to the amount of three million six hundred and
one thousand five hundred and ninety-seven dollars; and, during the same period,
there has been paid on these canals for engineering, $558,355, and $525,549 for land
damages and miscellaneous charges; and within the four years ending the 30th of
last September, there has been paid for interest on the canal debt of the State, the
sum of $3,616,414, all of which has been levied on transportation on our canals.
Now, it is proposed to increase the annual expenditure for construction, at the rate
of three millions of dollars a year, by borrowing that amount, and levying the
interest on the money borrowed as well as the principal, by high tolls on transportation for the next twenty-one years. In our judgment, it is much better policy
to pursue the safe and prudent course always adhered to by the democratic party,
for the completion of these canals, and which, by a wise, faithful, and economical
application of the means placed at the disposal of the State, would complete them
as rapidly as the necessities of business, or the interests of the people demand.
Another fact in relation to the enlargement was incidentally developed in the
discussion of the nine million bill, which deserves notice.
We allude to the changed plan adopted, or intended to be adopted by the Canal
Board, in the size of the enlargement between Rochester and Buffalo, and which has
not hitherto been communicated to the Legislature or the public by the officers
having charge of the canals in any of their official reports, required by law to be
made. It is now, however, admitted that the canal, from Lake Erie to Lockport, or
the greater part of that distance, is to be nine feet deep and ninety feet wide, and
from Lockport to Rochester the size is to be gradually diminished until it shall be at
Rochester 7 feet by 70.




39
Whether this change in the plan is required to maintain a good navigation, or to
give an additional water power to Lockport, does not appear in any official report
from the Canal Board. A resolution of the Senate, requesting the Canal Board to
communicate their plans and copies of the resolutions adopted by them in respect
to an increase of size in the enlarged canal, west of Syracuse, has remained unanswered.  Why this fear of disclosure of plans for the enlargement, unless it is
that an apprehension exists that the plans adopted or proposed will not meet the
approval of the Legislature or of the people, or that the actual cost of executing
the work may far exceed the estimates on which legislative action was to be predicated.
Fellow Citizens-We have thus briefly given to you a statement of the provisions
of a highly important measure, deeply affecting the interests and welfare of the
State, which has been originated and brought forward since you have had an opportunity of choosing representatives in the Legislature, and which you have had no
opportunity of examining or considering, or of expressing your wishes in relation to
it, to those who, as your agents, were called on to give to it the form and sanction
of a legislative enactment.
The measure in question had been pronounced by the Attorney-General, the legal
adviser of the Legislature, and the highest law officer of the government, to be clearly in conflict with the plain provisions of the Constitution. Under these circumstances, we felt constrained, by our sense of duty to you, and by our obligation to
support the Constitution, to oppose the passage of the bill in question by every
means in our power, but all our arguments and remonstrances were unheeded by an
overbearing and tyrannical majority in both branches of the Legislature, and the
bill was about to be forced through, when thirteen members of the Senate, as the
last and only means of resistance left to them, resolved to resign their seats, if necessary to defeat so unconstitutional a measure, and to appeal to the people for a
justification of the act.
Twelve of these Senators felt compelled to tender their resignation, and the remaining one avowed his determination to do so, in case it was necessary, all declaring at the same time a willingness to retain their seats in case the nine million bill
should not be passed, and thus enable the Legislature to complete the large amount
of other business then matured and ready for final action, and having, according to
all legislative usages, a priority in point of time to the bill for borrowing nine million of dollars. But the majority, in their rage and disappointment at the threatened defeat of their favorite scheme of public plunder, resolved that, if that could not
be passed, all other bills which had been previously matured, and which deeply affected public and private interests, should be lost with it; and they accordingly
adjourned with both branches of the Legislature without day, with a recommendation to the Governor to convene an extra session, at a large expense to the State,
for the pretended purpose of doing what could have been done, and what the twelve
Senators who resigned offered to remain and assist in doing, by continuing in session
for a single day longer; and there can be no doubt that the session would have been
so continued by the majority and the business transacted, notwithstanding the resignation of the twelve Senators, if the nine million bill could have been passed.
It is urged by some that, if the nine million bill was in violation of the Constitution, an appeal should have been made to the judicial tribunals to arrest its execution; but under a law of this character, the mischief might have been done before it
could be arrested by an appeal to the courts, and it is not yet well settled whether
the courts have jurisdiction in a case of this kind to afford a complete remedy by restraining the executive officers of the government from executing a law enacted by
the Legislature, authorizing the borrowing of money, for or on behalf of the State.
A proposition so to amend the bill as to give unquestioned jurisdiction to the courts
to adjudicate the questions raised, was rejected by a unanimous vote of a majority
in the Senate.
We have thus given you a brief account of the present condition of affairs in our
state government, and of the manner in which we have endeavored to discharge the
responsible trusts committed to us as your representatives.
We submit our conduct in respect to the important matters on which we have
been called to act, to your impartial judgment, with undoubting confidence that the
free and independent electors of the State of New York will, at all tidnes and under




40
all circumstances, manifest a firm determination to maintain and preserve for themselves and their posterity, the Constitution which they have adopted for their government, inviolate and sacred.
ALBANY, April 17, 1851.
SENATORS.
WM. HORACE BROWN, 1st Senate District.
B. BRANDRETH,          7th
JOHN SNYDER,           8th
JAMES C. CURTIS,       9th
THOMAS B. CARROLL, 12th
THOMAS CROOK,         14th
WILLIAM A. DART,   15th
GEORGE H. FOX,        16th 
SYDNEY TUTTLE,   lPth
JOHN NOYES,           18th
CHARLES A. MANN,  19th
A. C. STONE,          20th 
ALANSON SKINNER,  21st          "
HENRY B. STANTON, 25th
G. B. GUINNIP,        26th
MEMBERS OF ASSEMBLY.
ROBERT BABCOCK, Albany County.
ELI PERRY,             
ANSON CONGDON, Allegany
S. MINIER, Chemung
SAMUEL DOYLE, Delaware,  "
CHARLES ROBINSON, Dutchess"
JOHN STEWART, Fulton and Hamilton Co.'s
HENRY KINSLEY, Greene County.
JOHN H. WOOSTER, Herkimer"
DANIEL SHALL,         "
JOHN POOL, Jr., Jefferson
LOREN BUSHNELL, "'CONRAD P. SNELL, Montgom'y "
HENRY J. ALLEN, New York"
MICHAEL DOUGHERTY, " 
A. A. THOMPSON,        " 
LEWIS RYDER, Oneida
D. C. LE ROY, Onondaga
DANIEL DENISON, "
JOHN F. CLARK,  "
MILTON BARNES, Orange 
W. WRIGHT, Otsego
WM. BOWNE, Putnam
JAMES MAURICE, Queens
0. C. THOMPSON, Rensselaer
WM. RUSSELL,
J. J. SICKLES, Rockland
SMITH STILWELL, St. Lawr'ce"
JOHN HORTON, 
NOBLE S. ELDERKIN, "
LEWIS ROCKWELL, Schoharie "
A. L. LAWYER, 
C. G. HIGBY, Steuben
E. T. SMITH, Suffolk
J. STRATTON, Sullivan
W. F. RUSSELL, Ulster
JOHN P. DAVIS, "
DAVID NOBLE, Warren
SAMUEL JAYNE, Jr., Yates 
B. F. LEWIS, Oswego




41
The Proposed Canal Bill.
AN ACT to provide for the completion of the Erie Canal enlargement, and the Genesee Valley and Black River Canals.
ThePeople of the State of New York, represented in the Senate and Assembly, do enact
as follows:
SECTION 1. The remainder of the revenue of the State Canals, after defraying tne expenses of collection, superintendence and ordinary repairs, and after paying the several
amounts provided by the Constitution to be applied to the extinguishment of the canal
debt, and the general fund debt, and for the necessary expenses of government, shall be
applied in each fiscal year to the completion of the Erie Canal enlargement and the Genesee Valley and Black River Canals, in the manner hereinafter directed, until the said
enlargement and the said canals shall be completed.
SECTION 2. The Comptroller shall cause to be prepared certificates, to be denominated
" Canal Revenue Certificates," in the manner specified in the second section of chapter
three hundred and twenty of the laws of one thousand eight hundred and thirty-one, and
of the denominations therein specified, except that the same may be in any sums not less
than fifty dollars, which shall purport on their face to be issued by virtue of this act, and
without any other liability, obligation, or pledge on the part of this State, than such as is
contained in this act of the surplus revenues of the canals, and is to be redeemed, and
the interest thereon to be satisfied as provided in this act. Such certificates shall be
made payable at such time, not exceeding twenty-one years from the time of their issue
as the Comptroller shall designate as being the period when, in his judgment, the revenues provided by this act, will be sufficient for their redemption, and the payment of the
interest thereon; and they shall bear an interest of not exceeding six per cent. per annum, payable semi-annually, on such days, and at such places as the Comptroller shall
direct. All the existing provisions of law in relation to certificates of stock issued by,
or under the authority of the commissioners of the canal fund, so far as they are applicable, shall extend and be applied to the said Canal Revenue Certificates, and all the
powers and duties of the Commissioners of the Canal Fund in respect to the certificates
of stock issued by the State, under their direction shall devolve upon, and be performed
by the Comptroller, in relation to the Canal Revenue Certificates authorized by this act.
The said certificates shall be in the following form:
CANAL REVENUE CERTIFICATES.
This certificate is issued under the authority of an act of the Legislature of the State
of New York, entitled, "An Act to provide forthe completion of the Erie Canal enlargement and the Genesee Valley and Black River Canals," passed the       day of
1851, and entitles           or assigns, to receive         dollars, on the
day of          18; and the interest thereon, at the rate of    per cent. per annum, semi-annually, on the          day of          and the           day of
in each year, until the time when the principal sum will be receivable at         as
provided in the said act, without any obligation, liability, or pledge on the part of the
State of New York, than such as is contained in the said act. Dated this       18 
And they shall be signed by the Comptroller, officially and countersigned by any
transfer agent appointed by him.
SECTION 3. The surplus revenue specified in the first section of this act, which have,
and may accrue in the years 1851, 1852, 1853, and 1854, shall be applied to the completion of the Erie Canal Enlargement, and the Genesee Valley and Black River Canals,
until the same shall be completed. After the close of the fiscal year, in 1854, or at such
earlier period as the said enlargement and canals shall be declared by the Canal
Board to be completed, the whole of the said surplus revenue specified'in the first
section of this act, as the same shall be ascertained at the end of each fiscal year, shall
constitute a separate fund for, and be applied to the payment of interest on the said
canal revenue certificates so issued by the Comptroller, as the same shall fall due, ana to
the redemption of the said certificates as they shall become redeemable, or to the purchase of such certificates as hereinafter provided; and as soon as the amount of such sur




42
plus shall be ascertained in every fiscal year, the Auditor of the Canal Department shall
by his warrant on the Treasury, transfer the same to the credit of the said fund, until
a sufficient sum shall have been thus transferred, and safely invested to redeem all the
Canal Revenue Certificates, issued under this act, and to pay the interest thereon, such
sufficiency and safety to be certified by the Commissioners of the Canal Fund.
SEC. 4. The Comptroller and Treasurer shall keep proper accounts of the said fund, separate and distinct from all other funds, and shall annually report to the Legislature the condition thereof. The Comptroller shall from  time to time draw  his warrant on the
Treasurer, payable out of the saidfund only, for the payment of interest on the said canal
revenue certificates, as the same shall become due; and also for the redemption of the
said certificates, as they shall become redeemable, and for the purchase of such certificate as herein provided, and for the investment of any part of the said fund, and for the
payment of the expenses of preparing, issuing and transferring such certificates.
SEc 5. The Comptroller shall, from time to time, invest any part of the said fund,
which may not be required for immediate application, to the interest or principal sum
of the said Canal Revenue Certificates, in any stocks for the payment of which the
faith of this state is or may be pledged; or in the manner provided by law, for the
investment of the capital of the common school fund; and he may, from time to time,
purchase any canal revenue certificates issued under this act, on such terms as the
Commis-ioners of the Canal Fund shall judge to be most advantageous to the fund
hereby created; and he shall in like manner invest any income or interest arising from
anv investment so made by him.
SEC. 6. The Canal Revenue Certificates issued according to the provisions of this
act, shall be received from any person or association of persons, formed for the purpose
of banking, and intending to conduct banking operations under the laws of this state,
for circulating notes to be delivered to such person or association, in the same manner,
upon the same terms, and to the same extent as now provided by law, in respect to the
public stocks issued by this state, and the said certificates may also be received from
any insurance company organized in any other state, in compliance with any law requiring the deposit of certificates of stock as security for the performance of the undertaking-s of such company.
SEC. 7. The Comptroller shall sell canal revenue certificates issued as hereinprovided,
to the amount of three millions of dollars, within one year afterthe passage of this act,
and within the second year after the passage of this act, to the further amount of three
millions of dollars; and within three years after the passage of this act, to such further
amount, not exceeding three millions of dollars, as shall be certified by the Canal
Board to be necessary for the final completion of the Erie Canal Enlargement and the
Genesee Valley and Black River Canals, if such sales can be made for the full amount
of the principal sum for which the said certificates shall be issued respectively. The
same notice of all such sales shall be given by the Comptroller, as is now prescribed by
law, in relation to notices of loans to be made by the Commissioners of the Canal Fund.
SEC. 8. The avails of all sales of the said certificates, together with all premiums
received thereon, shall be immediately paid into the Treasury of the State, and the
bame, together with all interest that shall accrue on the deposit of such avails, shall be
applied exclusively to the Erie Canal Enlargement and the Genesee Valley and Black
River Canals, in the same manner as is or may be provided by law, in respect to the
canal revenues, and to the payment of interest on the certificates aforesaid, as herein provided; and the sum of three million five hundred thousand dollars is hereby appropriated, to be paid out of such avails, premiums and interest, and the surplus revenues of
the State canals, as hereinbefore provided, on the warrant of the Auditor of the Canal
Department, during the next year after the passage of this act; and the like sum of
three million five hundred thousand dollars, as hereby appropriated. to be paid out of
such avails, premiums, interest and surplus revenue and on the like warrant, during
the second year next after the passage of this act, to be applied to the completion of the
said enlargement and canals, and to be paid as the same may be required from time to
time.
SEC. 9. The sum of one hundred and eighty thousand dollars is hereby appropriated
for the payment of the first year's interest on the Canal Revenue Certificates issued
under this act, and the sum  of three hundred and sixty thousand dollars is hereby
appropriated for the payment of the second year's interest on the said certificates, to be
paid by the Treasurer on the warrant of the Auditor of the Canal Department, out of
the avails of the said certificates authorized by the act, and the premiums received
thereon, and the interest that shall accrue on the deposit of such avails.
Sec. 10 If, at any time after the year eighteen hundred and fifty-four, the Legislature
shall direct the sum cf three hundred and fifty thousand dollars, or any part thereof out
of the surplus revenues of the canals, to be applied to the necessary expenses of the
government, as authorized by the third section of the seventh article of the Constitution,
the sum so directed to be applied, shall from thenceforth cease to constitute any part of
the fund hereby created for the payment of the interest and redemption of the principal
of the Canal Revenue Certificates issued under this act, and such amount shall not be
transferred to the credit of the said fund, so long as such direction shall continue.




43
SEC. 11. In each year after the present one, the Canal Board shallregulate and arrange
the tolls on the canals of the state, in reference to the amount of articles transported
thereon during the preceding year, so that the same amount of articles transported in the
suceeeding year shall produce a sum sufficient to pay the expenses of collection, superintendence and ordinary repairs of the canals, and to satisfy the specific appropriations
in the Constitution, for the payment of the canal debt, and the general fund debt, and
for the necessary expenses of government, and also to produce a surplus of at least eight
hundred thousand dollars in each year, until the completion of the Erie Canal Enlargement, and when the same shall be completed, sufficient to produce a surplus of least one
million of dollars in each year, until a sufficient sum for the redemption of the Canal
Revenue Certificates, authorized by this act, shall have been collected, and safely invested, to be certified by the Commissioners of the Canal Fund, as hereinbefore provided.
SEC. 12. The Canal Commissioners shall, upon such terms, and in such manner as the
Canal Board shall direct and approve, contract for the completion of the enlargement of
the Erie Canal, and the Genesee Valley and Black River Canals, first having public notice in the manner now required by law; but such contracts shall be awarded to such
parties being of sufficient responsibility as shall agree to execute their work, so as to
insure the completion of the Genesee Valley and Black River Canals, and the completion
of the Erie Canal Enlargement by the opening of navigation in the spring of one
thousand eight hundred and fifty-four, on terms which shall, in the judgment of the
Canal Boar, be most safe and advantageous to the state. Such contracts shall contain a stipulation expressly limiting the liability of the state to the payment thereon, only
of such surplus revenues as shall be constitutionally applicable to the completion of the
said canals, and of the moneys realized fromthe sale of the certificates authorized by this
act; and the Canal Board may authorize the payment for any portion of the work performed under said contracts, by delivering to the contractors, with their assent, the certificates authorized by this act, at not less than the par value thereof; provided, however, that the contracts for the completion of the whole of the work upon such canals,
according to the plans and specifications adopted by the Canal Board, shall not exceed
to the amount of ten per cent., the sum of ten millions five hundred and eight thousand
one hundred and forty-one dollars, being the amount of the estimate for completing such
canals, except for structures or work not included in the specifications and estimates,
as contained in the report of the State Engineer and Surveyor, for the year one thoussand eight hundred and fifty-one, exclusive of land damages.
SEC. 13. This actshall take effect immediately.




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The Financial Article of the Constitution
SEC. 1. After paying the expenses of collection, superintendence and ordinary repairs, there shall be appropriated and set apart in each fiscal year, out of the revenues of
the State canals, commencing on the first day of June, one thousand eignt hundred and
forty-six, the sum of one million and three hundred thousand dollars, until the first day
of June, one thousand eight hundred and fifty-five, and from that time the sum of one
million and seven hundred thousand dollars in each fiscal year, as a sinking fund, to pay
the interest and redeem the principal of that part of the State debt called the canal
debt, as it existed at the time first aforesaid, and including three hundred thousand dollars then to be borrowed, until the same shall be wholly paid; and the principal and
income of the said sinking fund shall be sacredly applied to that purpose.
SEC. 2. After complying with the provisions of the first section of this article, there
shall be appropriated and set apart out of the surplus revenues of the State CanafQ, in
each fiscal year, commencing on the first day of June, one thousand eight hundred and
forty-six, the sum of three hundred and fifty thousand dollars, until the time.when a
sufficient sum shall have been appropriated and set apart, under the said first section, to
pay the interest and extinguish the entire principal of the canal debt; and after that
period, then the sum of one million and five hundred thousand dollars in each fiscal
year, as a sinking fund, to pay the interest and redeem the principal of that part of the
State debt called the General Fund debt, including the debt for loans of the State credit
to railroad companies which have failed to pay the interest thereon, and also the contingent debt on State stocks loaned to incorporated companies which have hitherto paid the
interest thereon, whenever and as far as any part thereof may become a charge on the
Treasury or General Fund, until the same shall be wholly paid; and the principal and
income of the said last mentioned sinking fund shall be sacredly applied to the purpose
aforesaid; and if the payment of any part of the monies to the said sinking fund shall
at any time be deferred, by reason of the priority recognized in the first section of this
article, the sum so deferred, with quarterly interest thereon, at the then current rate,
shall be paid to the last mentioned sinking fund, as soon as it can be done consistently
with the just rights of the creditors holding said canal debt.
SEC. 3. After paying the said expenses of superintendence and repairs of the canals,
and the sums apropriated by the first and second sections of this article, there shall be
paid out of the surplus revenues of the canals, to the Treasury of the State, on or before
the thirtieth day of September, in each year, for the use and benefit of the General
Fund, such sum, not exceeding two hundred thousand dollars, as may be required to
defray the necessary expenses of the State: and the remainder of the revenues of the
said canals shall, in each fiscal year, be applied, in such manner as the Legislature shall
direct, to the completion of the Erie Canal enlargement, and the Genesee Valley and
Black River canals, until the said canals shall be completed.
If at any time after the period of eight years from the adoption of this Constitution,
the revenues of the State, unappropriated by this article, shall not be sufficient to defray
the necessary expenses of the government, without continuing or laying a direct tax,
the Legislature may, at its discretion, supply the deficiency, in whole or in part, from
the surplus revenues of the canals, after complying with the provisions of the first two
sections of this article, for paying the interest and extinguishing the principal of the
Canal and General Fund debt; but the sum thus appropriated from the surplus revenues
of the canals shall not exceed annually three hundred and fifty thousand dollars, including the sum of two hundred thousand dollars, provided for by this section for the expenses of the government, until the General Fund debt shall be extinguished, or until
the Erie Canal enlargement and Genesee Valley and Black River Canals shall be completed, and after that debt shall be paid, or the said canals shall be completed, then the
sum of six hundred and seventy-two thousand five hundred dollars, or so much thereof
as shall be necessary, may be annually appropriated to defray the expenses of the government.




45
SEC. 4. The claims of the State against any incorporated company to pay the interest
and redeem the principal of the stock of the State loaned or advanced to such company,
shall be fairly enforced, and not released or compromised; and the moneys arising
from such claims shall be set apart and applied as part of the sinking fund provided in
the second section of this article. But the time limited for the fulfilment of any condition of any release or compromise heretofore made or provided for, may be extended by
law.
SEC. 5. If the sinking funds, or either of them, provided in this article, shall prove
insufficient to enable the State, on the credit of such fund, to procure the means to
satisfy the claims of tha creditors of the State as they become payable, the Legislature
shall, by equitable taxes, so increase the revenues of the said funds as to make them,
respectively, sufficient perfectly to preserve the public faith. Every contribution or advance to the canals, or their debt, from any source, other than their direct revenues,
shall, with quarterly interest, at the rates then current, be repaid into the Treasury, for
the use of the State, out ot the canal revenues as soon as it can be done consistently
with the just rights of the creditors holding the said canal debt.
SEC. 6. The Legislature shall not sell, lease, or otherwise dispose of any of the canals
of the State; but they shall remain the preperty of the State, and under its management
forever.
SEC. 7. The Legislature shall never sell or dispose of the salt springs, belonging to
this State. The lands contiguous thereto, and which may be necessary and convenient
for the use of the salt springs, maybe sold by authority of law, and under the direction
of the commissioners of the land office, for the purpose of investing the moneys arising
therefrom in other lands alike convenient; but by such sale and purchase the aggregate
quantity of these lands shall not be diminished.
SEC. 8. No moneys shall ever be paid out of the Treasury of this State, or any of its
funds or any of the funds under its management, except in pursuance of an appropriation
by law; nor unless such payment be made within two years next after the passage of
such appropriation act; and every such law. making a new appropriation, or continuing
or reviving an appropriation, shall distinctly specify the sum appropriated, and the object
to which it is to be applied; and it shall not be sufficient for such law to refer to any
other law to fix such sum.
SEC. 9. The credit of the State shall not, in any manner, be given or loaned to, or in
aid of any individual association or corporation.
SEC. 10. The State may, to meet casual deficits or failures in revenues, or for expenses
not provided for, contract debts, but such debts, direct and contingent, singly or in the aggregate, shall not, at any time, exceed one million of dollars; and the moneys arising
from the loans creating such debts, shall be applied to the purpose for which they
were obtained, or to repay the debt so contracted, and to no other purpose whatever.
SEC. 11. In addition to the above limited power to contract debts, the State may contract debts to repel invasion, suppress insu'rection, or defend the State in war; but the
money arising from the contracting of such debts shall be applied to the purpose for
which it was raised, or to repay such debts, and to no other purpose whatever.
SEC. 12. Except the debts specified in the tenth and eleventh sections of this article,
no debt shall be hereafter contracted by or on behalf of this State, unless such debt shall
be authorized by a law, for some single work or object, to be distinctly specified therein;
and such law shall impose and provide for the collection of a direct annual tax to pay,
and sufficient to pay the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within eighteen years from the time of the contracting thereof.
No such law shall take effect until it shall, at a general election, have been submitted
to the people, and have received a majority of all the votes cast for, and against it, at
such election.
On the final passage of such bill in either house of the Legislature, the question shall
be taken by ayes and noes, to be duly entered on the journals thereof, and shall be:
"Shall this bill pass, and ought the same to receive the sanction of the people I"
The Legislature may at any time, after the approval of such law by the people, if no
debt shall have been contracted in pursuance thereof, repeal the same; and may, at any
time, by law, forbid the contracting of any further debt or liability undersuch law; but
the tax imposed by such act, in proportion to the debt and liability which may have been
contracted, in pursuance of such law, shall remain in force and be irrepealable, and be
annually collected, until the proceeds thereof shall have made the provision hereinbefore
specified to pay and discharge the interest and principal of such debt and liability.




46
The money arising from any loan or stock creating such debt or liability, shall be
applied to the work or object specified in the act authorizing such debt or liability, or
for the repayment of such debt or liability, and for no other purpose whatever.
Nosuch law shall be submitted to be voted on, within three months after its passage,
or at any general election, when any other law, or any bill, or any amendment to the Constitution, shall be submitted to be voted for or against.
SEC. 13. Every law which imposes, continues or revives a tax, shall distinctly state
the tax, and the object to which it is to be applied; and it shall not be sufficient to refer,
to any other law to fix such tax or object.
SEC. 14. On the final passage, in either house of the Legislature, of every act which imposes, continues or revives a tax, or creates a debt or charge, or makes, continues or
revives any appropriation of public or trust money or property or releases, discharges,
or commutes any claim or demand of the State, the question shall be taken by ayes and
noes, which shall be duly entered on the journals. and three-fifths of all the members elected to either house, shall, in all such cases, be necessary to constitute a quorum therein.