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Hon. Erastus S. Prosser, Senator elect from the thirty-first district, in place of Hon. James Wadsworth, resigned, took and subscribed the constitutional oath of office. On taking the chair the Lieutenant Governor addressed the Senate as follows, to wit: SENATORs—I enter upon a discharge of the duties devolved upon me as presiding officer of this Senate, with but a limited knowledge of the forms or laws governing legislative action, and can only give you assurance of an intention upon my part to merit your confidence and respect by enforcing, with firmness and strict impartiality, such rules as you shall adopt for your own government and my guide; and I must rely upon your indulgence to overlook such errors as I may commit in the effort to which I have referred, with such endeavors upon my part, and the prompt and full co-operation and aid I may expect from each Senator, to maintain that order and decorum in our proceedings, so necessary to preserve the present high standing of this legislative body; and I trust that our intercourse here will not only be pleasant, but that our labors may result in benefit to the people of this State. On motion of Mr. Laflin, Resolved, That a committee of two be appointed by the President to wait upon the Assembly, and inform that body that the Senate is ready to proceed to business. Ordered, That Messrs. Laflin and Pratt, be said committee. On motion of Mr. Ames, * Resolved, That a committee of two be appointed by the President to wait upon his Excellency the Governor, and inform him that the Senate is ready to proceed to business. Ordered, That Messrs. Ames and Smith, be said committee. On motion of Mr. Foote, Resolved, That the rules of the Senate, adopted at its last session, be in force until otherwise ordered. On motion of Mr. Paterson, Resolved, That the Clerk of the Senate make the usual arrangements for the payment of all papers received by and sent out; also all public documents sent out by Senators and officers, during the Session. Mr. Paterson offered the following resolution : Resolved, That the Clerk of the Senate be directed to invite the clergymen of the cities of Albany and Troy, and village of Greenbush, who have charge of religious congregations, to open the daily sittings of the Senate with prayer, and to attend in such order as shall suit their convenience. by unanimous consent, the resolution was laid on the table. On motion of Mr. Noxon, Resolved, That until otherwise ordered, the hour of meeting of the Senate, be at eleven o’clock. Mr. Mather offered the following resolution:Resolved, That the whole subject of the question of an alleged vacancy in the Eleventh Senatorial district, be referred to the committee on privileges and elections.

Mr. Diven moved to amend by striking out all after the word “Resolved,” and insert, “Inasmuch as it is represented to the Senate that Hon. Wm. G. Mandeville has, since he was elected to this Senate, accepted the office of postmaster under the government of the United States, thereby forfeiting his office of Senator; therefore, “Resolved, That it be referred to a select committee of three to hear proof and report the facts to the Senate.” The President put the question whether the Senate would agree to said amendment, and it was decided in the affirmative. The President then put the question whether the Senate would agree to the resolution, as amended, and it was decided in the affirmative. Mr. Ames, from the committee to wait upon his Excellency the Governor, and inform him that the Senate was organized and ready to proceed to business, reported that the committee had performed the duty assigned them, and that his Excellency was pleased to say that he would communicate to the Senate in writing. Mr. Diven offered the following resolution : Resolved, That no person whatever except the Governor and State officers, the President of the Senate, the Senators, officers and members of the Assembly, and the officers of the Senate, be permitted within the bar, and that the Sergeant-at-Arms strictly enforce this rule. Mr. Scott moved to lay the resolution on the table. The President put the question whether the Senate would agree to said motion, and it was decided in the affirmative. On motion of Mr. Smith, the Senate took a recess for ten minutes.

ONE O'CLOCK.

The Senate again met.

Mr. Laflin, from the committee appointed to wait upon the Assembly and inform that body that the Senate was ready to proceed to business, reported that they had performed the duty assigned them.

Messrs. Goddard and Chanler, a committee from the Assembly, appeared and informed the Senate that the Assembly was organized and ready to proceed to business.

Mr. George Bliss, Jr., Private Secretary of the Governor, appeared in the Senate chamber and presented the annual message of the Governor, which was read by the Clerk, as follows:

To the Senate and JAssembly : I enter upon the discharge of the duties which the People of this State have committed to me, with less of political experience than many of my predecessors in this high station, and with some anxiety for the result. Upright intentions, a heart devoted to the interests of the Commonwealth, and unceasing application, are all the pledges I can give for the faithful execution of the trust delegated to me by the People of New York. Under such circumstances I cannot hesitate in this, my first communication to the Legislature, to invoke the presence and aid of that Almighty Being who controls the Councils of Nations, as well as the affairs of individuals, that he will enable every person employed in the administration of the State to execute successfully the duties of his station. The Constitution makes it the duty of the Governor to “communicate by message to the Legislature at every session, the condition of the State, and to recommend such matters to them as he shall judge expedient.” In conformity therewith, and as first claiming your earnest attention, I proceed to apprize you of the financial condition of the State, that you may early know of the necessity which exists for supplying its Treasury. The Funded Debt, on the 30th September, 1858, was $30,913,258.77; of which $6,605,654.37 was the General Fund State Debt, and $24,307,704.40 was the Canal Debt. Of the General Fund State Debt $350,000 becomes due in 1859, and $450,000 becomes due in 1860. There is also a Contingent Debt for Stock issued to certain railroad companies, amounting to $570,000. The Constitution disposes of the revenues derived from the Canals, annually, in the following manner: 1st. To pay the expenses of collection, superintendence, and ordinary repairs, which the Commissioners of the Canal Fund in their report to the Legislature on the 18th of February last, for the last fiscal year, estimated at $1,000,000. 2d. To pay the interest and provide a Sinking Fund to pay the principal of the Canal Debt, as it existed on the 1st June, 1846, including $300,000 then to be borrowed, $1,700,000. 3d. To pay the interest and provide a Sinking Fund to pay the principal of the General Fund Debt, $350,000, until old Canal Debt is provided for, and then, for the same purpose, $1,500,000. 4th. To pay interest, and provide a Sinking Fund to pay new Canal Debt in eighteen years, which debt now amounts to $12,000,000, and will require for interest, annually, $710,000. 5th. For the support of government, $200,000. . 6th. The remainder to be expended every year upon the canals until they are completed, and after that, as the Legislature may direct. The whole amount of receipts from tolls, rent of surplus waters, and interest on current canal revenues during the year ending September 30, 1858, was $2,072,204.88, viz:

From tolls:

Erie canal,--------------------- $1,791,527 98
Champlain canal, --------------- 90,486 10

& $1,882,014 08 Oswego canal,------------------------------- 83,939 46 Cayuga and Seneca canal,--------------------- 14,400 67 Chemung canal, ----------------------------- 13,347 95 Crooked Lake canal, ------------------------- 520 82 Chenango canal,----------------------------- 15,305 64

Black River canal,--------------------------- 4,998 48

Genesee Valley canal,------------------------ 25,651 07 Oneida Lake canal, -------------------------- 1,235. 32 Baldwinsville canal, ------------------------- 14 13 Oneida river improvement, -------------------- 3,725 19 Seneca river towing path, - - - - - ** * * * * * * * * * * * * * * * 99 69 Cayuga inlet, -------------------------------- 190 18

$2,045,442 68 From rent of surplus waters, -- - - - - - - - - - - - - - - - o 1,948 33 From interest on current canal revenues, - - - - - - - - 24,813 87

$2,072,204 88

The payments during the year for superintendence, and ordimary repairs, collection of revenue, salaries chargeable to the Canal Fund, and miscellaneous payments, have been $1,078,878.91, “surplus revenues,” $993,425.97. It will be thus seen, that for the last fiscal year, after paying the expenses of collecting, superintendence, and repairs, chargeable upon the canal revenues, there is a deficiency of $706,574.03 of the sum needed to pay the interest, and provide a “Sinking Fund,” to meet the first constitutional requirements of $1,700,000. The interest upon the canal debt alone is annually $1,358,892.30. The interest upon the General Fund debt is annually $354,606.10. If the entire surplus revenue from the canals was now to be appropriated to the payment of interest on the canal debt, there would be a deficiency of $365,466.33. If the General Fund debt should be included, there would be a deficiency of $712,710.74, to be provided for in some other manner. From a statement made to me by the Auditor of the Canal Department, it appears there have been drafts made by the Canal Commissioners, up to the 30th September, 1858, for $1,330,033,30 beyond the ability of the treasury; none of which have been paid ; and that the amount of these drafts will, in the opinion of the Auditor, by the first January, 1859, reach $1,700,000. From another source, the estimate for the same period, and for the same object, is $2,000,000. To meet the claims upon the treasury, actual and estimated, which relate to the canals alone, the following sums will be required : To pay outstanding drafts for work done on the canals, and awards for land damages, (partly estimated,)------ $1,700,000 For one year's interest on the debt of $12,000,000, contracted under section 3, of article 7, of the Constitu

tion. ----------------------------------------- 710,000 For the principal and interest on the temporary loan of $200,000, due 1st July, 1860,-------------------- 220,000

Estimated amount required, under the act chapter 263,

of the Laws of 1858, to pay interest on drafts and

awards, the principal of which was liquidated at the department, prior to April 10, 1858,-------------- 25,000

Total,-------------------------------------$2,655,000

equivalent to a State tax of nearly two mills on the dollar of the valuation of 1857. The above estimate of twenty-six hundred and fifty-five thousand dollars does not include all the damages for land taken for the construction and enlargement of the canal, which it is supposed will require $1,000,000 additional; and that $500,000 will be required to pay the fifteen per cent reserved out of estimates of work done under contract. If these figures prove to be correct, obligations to the amount of upwards of $4,000,000 already exist against the State for the canals alone, (without any estimate for work yet to be performed in the completion thereof,) a large part of which obligations have been created regardless of that part of the Constitution which provides that “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 contracting thereof.” Thus, without the power to create a debt, unless first submitted to the peóple, a debt has been created for canal purposes, without the means of payment in the treasury, or at the command of those who made it ; and it requires your early and deliberate consideration as to the measures necessary, and proper to be adopted, to save unimpaired the public faith; for under no circumstances will the State of New York ever refuse to acknowledge and pay, any and all just claims that exist against her, or that may have been contracted by any of her authorized agents. I regret the necessity for this exhibition of the financial affairs of the State, wherein is shown a floating indebtedness of such magnitude; but justice to a Legislature that will be expected to provide for its extinguishment, requires that it should be stated. From information derived from the State officers, I am led to believe that one million of dollars for the Erie canal; six hundred thousand dollars for the Oswego; two hundred thousand dollars for the Cayuga and Seneca; and three hundred thousand dollars for the other canals, would essentially complete our system of canal enlargement, except for a portion of the Erie, where remain what are called wall benches, on which the slope or protection wall is built to secure the inside bank of the canal. The remoyal of these has been recommended in former official reports, but it will not be necessary for the immediate purposes of navigation. i am also informed that very essential advantages can be attained by deepening the whole of the channel of the Erie canal to seven feet, and by leaving the width of the small portion yet remaining to be widened at forty-five feet. The cost of this partial enlargement is estimated for the Erie canal at three hundred thousand dollars, in which would be in

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