duly shorten the terms of imprisonment, as it will be taken into account by our courts in making sentence. It will improve the discipline of prisons and save the necessity for degrading punishments. It will diminish the number of pardons, which are always attended with great evils, and finally it will return the convict to society with such proofs of good character as will give him self-respect and the confidence of his neighbors. I earnestly urge the subject upon the attention of the Legislature. I also advise that the Inspectors of our Prisons be allowed to give the convicts, upon the same principles, the benefit of their good conduct in the past.

The Prison Association of New York is required by law to inspect the prisons in the State, and to report to the Legislature their condition. The work of inspection has been thoroughly performed. All the State prisons, the penitentiaries, and the county jails, with but few exceptions, have been visited and examined. The report of the association will lay before you the results of this investigation. I trust that the suggestions of this report will be considered by you. As the law imposes upon the Prison Association an annual examination of our prisons, I recommend a renewal of the appropriation to that end.

STATE BANKS.

The annual report of the Superintendent of the Banking Department shows that there were three hundred and nine banks, with an aggregate capital of $109,258,147, doing business on the 30th day of Sept., 1863, and that fifty-one banks were closing business voluntarily and from insolvency. The total amount of circulation issued by that officer on the 30th of September last, was $42,192,645. Of this

amount $35,252,219 was issued to banking associations and

individual bankers, and is secured as follows:

The increase and decrease in the kinds of security held,

Our Banking system, which has been tested by time, and has grown up with the business of New York, is threatened by an untried financial scheme of the General Government. It is proposed to build up in the place of State Institutions an organization with all the moneyed power of a National Bank, with the insecurity and discount upon its currency which must attach to the bills of corporations issued in remote or inaccessible points in the States or Territories, and which have no common centre for their redemption. I advise some legislation for the protection of our State system. This great commercial State must not, in the event of the failure of the National

scheme, be left without either currency or organization to carry on the business of our community.

NATIONAL BANKS.

I am informed by the Comptroller of the Currency that seventeen banks, with an aggregate capital of two million one hundred and forty thousand dollars, had, on the 10th of December last, been organized in this State under the National Currency Act. Three of these banks, with a total capital of one million dollars, are in the city of New York.

SALT SPRINGS.

The annual report of the Superintendent of the Onondaga Salt Springs shows an inspection during the year 1863 of about eight million bushels, which exceeds that of 1862 by nearly one million bushels. The duty received last year amounts to about eighty thousand dollars.

FINANCES.

The Comptroller, in his annual report to the Legislature in January last, estimated the deficiency in the revenue of the General Fund at about seven hundred and fifty-five thousand dollars. The large appropriations made in the Supply bill, and in special acts, increase this deficit to nearly twelve hundred thousand dollars at the close of September, as will be seen below:

STATEMENT OF THE GENERAL FUnd.

Balance in the Treasury to the credit thereof on

OTHER FUNDS.

Balance in the Treasury to the credit of all the funds except the Canal Fund, September 30, 1862 ..

Receipts of the year..

Payments

Treasury overdrawn, Sept. 30, 1862....

$1,355,732 02 10,821,972 54

$12,177,704 56

12,711,993 72

$534,289 16

The following are the principal appropriations made by the Legislature of 1863, not embraced in the annual esti

Of this about two millions one hundred thousand dollars has been drawn at the close of the fiscal year. To meet the draft for bounties to volunteers, the Comptroller made a temporary loan of two million dollars. This will have to be increased to three millions.

STATE TAX.

There was levied in 1863, a direct tax of five mills on the dollar on the assessed valuations of the property of the State, for the following objects: three-fourths of a mill for schools; three-eighths for canals; two mills for general purposes; one and eleven-sixteenths for bounties; and three-sixteenths for the Albany and Susquehanna railroad. The aggregate proceeds of the State tax levied in 1862 and received during the last fiscal year, was $5,749,930.71.

CANAL FUND.

Balance of the Canal Fund Sept. 30, 1862 ... Received during the fiscal year for Canal tolls, rent of surplus water, interest on revenues, &c.

Payments during the same period :

$4,589,903 83

6,722,268 45.

$11,311,572 28

Leaving a balance to the credit of the Canal Fund, in the treasury and invested, on Sept. 30, 1863, of ....

Revenues for the fiscal year ending 30th Sept., 1863:

$6,875,617 21

Canal tolls....

$5,028,431 32

The receipts from canal tolls for the navigation season of 1863 was $4,645,095.27, being a falling off as compared with the preceding year of $543,848.

INTERNAL CARRYING TRADE.

The following exhibits the extent of the carrying trade

of the State in 1863:

Tonnage of Canals for 1863, estimated.... Tonnage of Railroads to Sept. 30, 1863, ascertained

For the year