When Theodore Roosevelt was inaugurated as Governor of New York in January, 1899, the most important and the most difficult question which he had to solve was that of the State canals. His party had narrowly escaped defeat -- and but for his own personal popularity probably would have been defeated -- at the election in the previous autumn on account of their mismanagement of the $9,000,000 improvement authorized by the legislation of 1894. Governor Roosevelt was extremely anxious to retrieve these mistakes of his party, and equally anxious to find a proper solution of the canal question the importance of which to the State of New York was universally acknowledged. After considering various projects, he finally decided to appoint a committee of private citizens, to serve without pay, to study the question in all its bearings and make a report to him as a basis for his recommendations to the Legislature. He appointed this committee by letter, dated March 8, 1899. I was selected as chairman, and the other members were Major Thomas W. Symons of the Corps of Engineers, United States Army, then stationed at Buffalo in charge of river and harbor improvements, Hon. Frank S. Witherbee of Port Henry in the Champlain district, Hon. George E. Green, State Senator from Binghamton in the southern tier of counties, Hon. John N. Scatcherd of Buffalo, and the two State officials most intimately connected with the administration of canals, viz., Hon. Edward A. Bond, State Engineer, and Hon. John N. Partridge, Superintendent of Public Works.
The request of the Governor was simply that we should study the canal problem and advise him. His own words were as follows: "The broad question of the proper policy which the State should pursue in canal matters remains unsolved, and I ask you to help me reach the proper solution."
We devoted the greater part of the year, 1899, to a study of the subject and made our report to the Governor under date of January 15, 1900. It is a printed document of 231 pages with 7 maps, 36 charts and 69 tables of statistical information. The Governor promptly transmitted the report to the Legislature, adopting the conclusions and recommendations which it contained, and advising that legislation be enacted to carry them into effect. This was done in successive years, and meanwhile, additional surveys and estimates of cost were prepared under the direction of the State Engineer. The State printed an edition of several thousand copies of our report, and scattered it broadcast throughout the State for examination and discussion; and finally the project was ratified and adopted by an overwhelming vote of the people in the election of 1903.
It will be noticed that the question on which the Governor asked our advice was the policy of the State in canal matters; in other words, should the canals be abandoned, or maintained in their present condition, or enlarged, and if so, to what extent and at what estimated cost? In order to reach an intelligent conclusion upon these fundamental questions, and in order to convince others of the soundness of any such conclusion, we set to work to obtain statistical information concerning the rates of transportation by rail and on the ocean, the lakes and the canals, not only of New York, but of other states and of other countries. The information thus gathered was unusually full and complete, and had never before been presented in similar compact form. It formed the basis of the argument in the debates which followed in the Legislature and before the people on the adoption of the project.
As to our conclusions and recommendations, the first question to be decided was whether or not the canals should be entirely abandoned. It was claimed by many that canal transportation was antiquated and altogether out of date; that "the railroads, with their large capital and scientific management, their durable roadbeds, powerful locomotives, larger cars, greater train loads, greater speed, and more certainty of delivery, will be able now or in the early future to reduce the cost of transportation below what is possible on the canals." If it should seem probable that the railroads could accomplish this, then it would be manifestly unwise and improper to expend any more public money upon the canals. A careful study of the actual facts in regard to transportation rates led us to form the following opinion: "In our judgment, water transportation is inherently cheaper than rail transportation. It varies slightly with the size of the vessel and the restriction of the waterway. On the ocean, where the waterway is entirely unrestricted and the size of the vessel is the maximum, it averages about half a mill per ton mile; on the lakes, where the vessels are not so large, and occasional restrictions are encountered on the waterway, it is about six-tenths of a mill per ton mile; on the canals of New York, where the boats are very small, the waterway greatly restricted, and obsolete methods are employed for handling the business, it is about two mills per ton mile. By the enlargement of the canal which we recommend, and the introduction of improved methods of management, we believe that the canal rate can be reduced to two-thirds of one mill per ton mile, or very nearly as low as the lake rates. All of these rates have varied in the past and will vary in the future to correspond with prosperity or depression in general business. But there is every reason to believe that they will maintain a corresponding ratio, the ocean, lake and canal rates being from one-third to one-fourth of those by rail. The reductions which may be made hereafter in the railroad rate can be met by similar reductions in all three classes of the water rates, provided the same methods of skilled management are applied to all."
The phenomenal growth of the enormous tonnage on the lakes and the prosperity which it has brought to the states bordering on the lakes convinced us that a proper waterway across the State of New York would bring similar prosperity to this State; and we called attention to the fact that "New York has certain topographical advantages which it would be folly not to utilize. Through the valleys of the Hudson and the Mohawk and the comparatively low and level lands west of Oneida lake, it is possible to construct a water route connecting the Great Lakes and the Atlantic coast, and no such water route can be constructed through any other State.
We were also guided in reaching these conclusions by the action of the principal countries on the continent of Europe in regard to water transportation. Mr. Witherbee visited Europe in the summer of 1899, and traveled through France, Belgium and Germany, collecting a large amount of valuable reports relating to the economic and engineering features of the canals in those countries. From the information obtained by him, and from other sources, we were enabled to show the enormous development of inland navigation, by means of canals and rivers, which had taken place during the previous twenty years in France, Belgium, Germany and Russia. In all of these countries the traffic of internal waters had increased far more rapidly than the transportation by rail.
From a consideration of all these facts we reached our first conclusion -- which, like all the other portions of our report, was unanimously adopted -- to wit, "That the canal connecting the Hudson river with Lakes Erie, Ontario and Champlain should not be abandoned, but should be maintained and enlarged." The next point to be considered was, to what extent should they be enlarged, what size of vessel they should be adapted to carry, and what would be the estimated cost of construction.
As to the proper size of the enlarged canal, widely different views were held by engineers and by economists. He contended that the nine foot canal authorized in 1894 was sufficiently large; others brought forward the supposed advantages of a ship canal large enough to carry ocean-going steamers without breaking bulk from Duluth to Liverpool, or any other port; others contended that a canal of intermediate size would be found to be the most economical, would cost the least amount of money for the results produced, and would, in fact, produce a lower freight rate than either the small canal on the one hand, or the ship canal on the other.
To these questions we gave the most careful study. The ship canal had many glittering attractions, and there was a large sentiment along the lakes which had found expression in Deep Waterways conventions, which had been held in recent years and had advocated a water route of either 21 or 28 feet depth from Lake Erie to the Atlantic ocean. Congress had appropriated considerable sums for the purpose of making surveys and estimates of cost. It was argued that there was such a strong sentiment from so large a section of the country in favor of this project that the United States would adopt it and thus save the State of New York from any further expense in tile matter. But a careful examination of the facts led us to the conclusion that while a ship canal of 21 or 28 feet depth would cost enormously more than a barge canal of, say, 12 feet depth, it would not produce as low a freight rate, and we based our conclusion on the following reasons. The cost of a barge adequate for transportation on the canals was less than $8 per ton of carrying capacity; the cost of a vessel to navigate the lakes was about $36 per ton; and the cost of a vessel to navigate the ocean was about $7l per ton. It was manifest that a barge suitable for transportation on the canals was not suitable for lake navigation; and that a vessel could be built with ample strength for navigating the lakes which would certainly be destroyed in the first gale it encountered on the Atlantic. The lake and canal vessels could, therefore, not be used on the ocean. Moreover, the ocean vessel, being so much more expensive than the lake or canal vessel, and being designed for comparatively high speed, could not economically be used on the canal where the speed is limited to five or six miles an hour. The only advantage of a vessel sailing from any part of the lakes to any part of the ocean was the saving of the reloading of the cargo at Buffalo and New York, but we found that this was less than the loss involved in using an ocean steamer for canal and lake transportation. We summarized the argument in these words:
"We have, then, the difference in first cost between $71, $36 and $8 per ton of carrying capacity for the three types of vessels which, in the evolution of business, have been produced as the most economical for the particular class of work each has to do. We do not believe that it is possible to combine these three types into one vessel, which will be as economical for the through trip as to use the three existing types with two changes of cargo, one at Buffalo and one at New York, or to use the boat of 1,000 tons capacity going through from the lakes to New York and there transferring its cargo to the ocean steamer."
And this led us to our second conclusion, which, as previously stated, like all others, was unanimous: "That the project of a ship canal to enable vessels to pass from the Upper Lakes to New York City (or beyond) without breaking bulk is a proper subject for consideration by the Federal Government, but not by the State of New York."
Having rejected the ship canal project, we had then to consider what size of enlarged canal we should recommend. In any event, we were satisfied that the route of the canal should be changed so as to use the waterways of the Seneca and Oneida rivers, Oneida lake and the Mohawk river in place of the present route; but the question was whether the depth of the canal should be 9 feet, capable of carrying a boat with cargo capacity of 450 tons, or a depth of 12 feet, carrying a boat with a cargo capacity of about 1,000 tons. With such data as we could obtain in the short time at our disposal, and without adequate surveys, we estimated the cost of the smaller project at a little more than $21,000,000, and of the larger project at a little less than $59,000,000.
Our conclusion was in these words:
"In our judgment, arrived at after long consideration, and with some reluctance, the State should undertake the larger project on the ground that the smaller one is at best a temporary makeshift, and that the larger project will permanently secure the commercial supremacy of New York, and that this can be assured by no other means."
Major Symons made an exhaustive analysis of the methods of canal transportation as actually used, and a comparison of the ton mile costs of transportation with boats of various sizes, and showed conclusively that not only would the l000 ton barge project produce the lowest freight rate, but also that, taking the comparative estimates of cost, this project would produce the greatest economic value of the canal. His memorandum on this subject, which was published in the report, was accompanied by diagrams showing the successive growth of the size of the boat used on the canals from 1825 to 1862, since which date no improvement had been made on the canal of any consequence. It also showed by comparison the dimensions of the proposed barge, and indicated the manner in which it would be used in actual practice. While some members of the committee were at first disposed to recommend the completion, with certain modifications, of the nine foot project of 1894, yet after a long study and discussion the committee became unanimously convinced that the 1,000 ton barge canal project was the only proper and adequate solution of the problem.
We made a fourth recommendation in the following words:
"That the money for these improvements should be raised by the issue of eighteen-year bonds in the manner prescribed by the State Constitution, and that the interest and principal of these bonds should be paid out of taxes specifically levied, for benefits received, in the counties bordering in whole or in part on the canals, the Hudson river and Lake Champlain; such taxes to be levied in proportion to the assessed valuation of the real and personal estate in such counties. These taxes will amount to about 10 cents per $l00 of assessed valuation annually during the period of eighteen years."
Our object in making this recommendation was to disarm the opposition of the non-canal counties which opposed the expenditure of State money for a project from which they claimed they could derive no benefit. In answer to this, it might be said that the whole State was benefited by the canal improvement, and that every county should bear its share of the expense. We also submitted statistics in tabular and graphic form showing that the valuation of the river and canal counties was 90% of the entire valuation of the State. In any event, they would bear 90% of the expense, and it was thought wise to suggest that they bear the entire expense so as to remove every ground of alleged injustice in taxing the counties which claimed to derive no benefit.
This recommendation was not adopted by the Legislature, nor submitted to the people. It was, in fact, some what cumbersome, and as we showed conclusively that the non-canal counties would only have to pay 10% of the cost of improvement, it was evidently thought not worth while to introduce a new method of taxation for State improvements.
At the election the non-canal counties voted against the project by large majorities, St. Lawrence county, for instance, being 12 to 1 against it, and Steuben county, 10 to 1 against it; but, on the other hand, the canal counties voted in favor of it by almost equally large majorities. New York being 9 to 1 in favor of it ; Kings, 8 to 1 ; Queens, 5 to 1, and Erie, nearly 5 to 1. For same unexplained reason Monroe county, in which Rochester is situated, and Onondaga county, in which Syracuse is situated, voted against it. The overwhelming vote, however, in the counties at the two terminals. New York and Buffalo, made a majority of 245,312 in the entire State in favor of the project, and a total vote of 1,100,708.
In regard to the term for which the bonds were to run, this was changed from eighteen to fifty years by an amendment to the Constitution, adopted at the same election of 1903.
Our fifth and final recommendation was as follows:
"That the efficiency of the canals depends upon their management quite as much as upon their physical size, and that no money should be spent for further enlargement unless accompanied by measures which will accomplish the following results:
(a) The removal of all restrictions as to the amount of capital of companies engaged in transportation on the canals, and the encouragement of large transportation lines for handling canal business, in place of hampering them, as has hitherto been the case.
(b) The use of mechanical means of traction, either steam or electricity, in place of draft animals; and the use of mechanical power in place of hand power for operating the gates and valves, and moving boats in locks.
(c) The organization of the force engaged on the public works of the State on a more permanent basis, so as to afford an attractive career to graduates of scientific institutions, with the assurance that their entry into the service, their tenure of office, and their promotion will depend solely on their fitness, as determined by proper and practical tests.
(d) A revision of the laws in regard to the letting of public contracts by the State, so as to make impossible a repetition of the unfortunate results of the $9,000,000 appropriation."
Legislation has already been adopted to carry into effect (a) and (c); the adopted plans for the canal are in accordance with (b); and the specific form of contract which we recommended in connection with (d) was not adopted, but another form of contract was adopted which will practically accomplish the same result.
It only remains to speak of the cost of the project. With such data as we had available and with such surveys as were possible during the year, 1899, we estimated the cost of the project we recommended at $58,894,668 for the Erie canal and $2,642,120 for the Oswego and Champlain canals, making a total of $61,536,788. This contemplated a canal with 12 feet depth and suitable locks for carrying a barge of approximately 1,000 tons capacity from Buffalo to the Hudson river, but as to the Oswego and Champlain canals, it recommended only the completion of the work already undertaken to provide for boats of six feet draft. While we believed these estimates to be adequate, yet we earnestly recommended an appropriation of $200,000 for the purpose of making detailed surveys and further estimates. This appropriation was immediately made by the Legislature and the work entrusted to the State Engineer, Mr. Bond, who had, been a member of the committee, who promptly and skillfully made, at a cost less than the appropriation, an exhaustive series of surveys on which final estimates of cost were made. It was ultimately determined to enlarge the Champlain and Oswego canals to the same size as the main canal between Buffalo and the Hudson river, and also to include the dredging of a 12 foot channel in the Hudson river, which we had anticipated would be done by the Federal Government. This enlargement of the project very materially increased the cost, and in the interval between the time of our report and the completion of the detailed report of the State Engineer, the prices of labor and materials had very largely advanced. In order to cover all possible contingencies, the State Engineer carried his estimate to $101,000,000, and this was the amount appropriated by the Legislature and ratified by the people at the election of 1903.
In our report we figured on bonds running for eighteen years, and showed that the annual amount of interest and sinking fund to extinguish the bonds in that period would amount to a little more than 10 cents per $100 of the then assessed valuation; that the aggregate State, county and municipal taxes at that time averaged about $2 per $100 valuation; and that the carrying out of the project would increase the tax rate from $2 to $2.10, or in other words, "to the person or corporation paying taxes on $1,000,000 of assessed valuation it would increase his tax bill from $20,000 to $21,022 per annum; to the man owning a $50,000 house in New York City or Buffalo it would increase his taxes from $1,000 to $1,051 per annum; and to the farmer with a farm valued at $5,000 It would increase his taxes from $100 to $105.11." We went on to say that --
"If the enlargement of the Erie canal will restore to New York its former proportion of the grain trade, and in addition will develop the iron and steel industry within its own borders; in a word, will permanently establish the commercial supremacy of New York, which is now not only threatened but partially lost, the foregoing sums are a small amount to pay to bring about such results. They are small as compared with what New York has done in the past for the same purpose."
We showed that In the past the canal debt at one time reached an amount equal to 3.8% of the entire valuation of the State, whereas what we recommended was less than 1.4% of the valuation. We showed that the taxation for canal purposes in the past had frequently been as high as 20 cents per $100, whereas what we recommended was barely one-half that amount. In point of fact, the financial burden will prove to be very much less than we anticipated, partly due to the fact that the assessed valuation of the State has increased much more rapidly than we anticipated, and partly to the fact that the cost is spread over fifty years instead of eighteen years. The assessed valuation of the State is already much in excess of $8,000,000,000, and the taxation for canal purposes has not as yet reached $1,000,000, or 1 ¼ cents per $100 instead of 10 cents per $100 as we estimated. It is believed that the total cost will fall several million dollars below the estimate of $101,000,000, but in case that entire amount should be expended, the assessed valuation of the State will at that time be close upon $10,000,000,000, and the interest and sinking fund to extinguish the debt at maturity will be not more than $2,250,000 per annum, or 2 ¼ cents per $100 of valuation, or less than one-fourth of the financial burden we estimated.
In many respects the barge canal project is comparable in extent, in magnitude, and in results with the Panama canal project; but in comparison with the immense resources of the imperial State of New York, in comparison with the vast sums which the city of New York is expending for public works, in comparison with the equally vast sums which the great railroad systems have within the last few years expended and contemplate expending in the immediate future, the expenditures for the barge canal are small. If, as it is confidently expected, they produce the desired results and retain the supremacy of the great trade route through the State of New York between the lakes and the ocean, then the price to be paid, measured by the results obtained, is almost insignificant.