New York Commerce Commission Appointed -- Groping for a Canal Policy -- Canal Advocates Attempting to Rally -- Opposition and Discouragement Found Everywhere -- Suggested Remedy -- State Committee on Canals Appointed -- Call for a State Commerce Convention -- Results of Commerce Convention -- Work of State Committee on Canals -- Its Report: Recommendations: Other Alternative, Canal Abandonment and Ship Canal: Abandonment Discussed: Ship Canal Discussed: Estimates -- Commerce Commission Reports -- Governor's Message Transmitting Reports of Canal Committee and Commerce Commission -- Commerce Commission's Report: Commerce Decline Due Largely to Differentials: The Remedy, Canal Improvement: Recommendations.

After this rather lengthy digression into the national aspects of the waterway problems we return to events in New York state. Just as the work of deepening the canals to nine feet was coming to a close a commission was appointed by Governor Black which had a distinct bearing on the canal policy the State was later to adopt. This body was known as the New York Commerce Commission and it consisted of five members, Charles A. Schieren, ex-mayor of Brooklyn, Andrew H. Green, C.C. Shayne, Hugh Kelly and Alexander R. Smith. In his annual message to the Legislature the Governor had recommended such a commission and under a legislative act of April 29, 1898, he was given authority to appoint it. The duty of this commission was to inquire into the condition of the commerce of New York, the causes of its decline and the means for its revival, also to summarize its conclusions, suggest advisable legislation and report to the Legislature of 1899. On January 18, 1899, the commissioners reported that, owing to a defect in the creating statute, they were without funds properly to carry on their investigation, and they recommended the continuance of the commission and an appropriation for doing the work. In his message to the Legislature Governor Roosevelt endorsed this recommendation. As a result the commission was granted an extension of time and a fund for expenses. The work done by this commission was most excellent. Its report to the Legislature, which contained an abundance of valuable data, was submitted in 1900, almost contemporaneously with the report of the State Commission on Canals. We shall review the commission's report as we reach it in due chronological order.

We have said that after the failure of the nine-million plan the people of the state were bewildered as to what to do next. The same may be said of the political leaders and of the canal advocates as well, as we shall see presently. Governor Roosevelt's annual message to the Legislature of 1899 shows that in canal matters he was feeling his way. He said little of importance on this subject except that he would send a later communication.

The nine-million-dollar improvement had been carried on under a Republican administration. It followed naturally that all of the malodorous publicity, the adverse criticism and the charges of fraud and extravagance connected with the undertaking were eagerly seized upon by the opposing political party and used for partisan ends, and the effect was felt at the polls in the general election. Another Republican administration, however, came into office in 1899, but with the pall of the old administration still clinging to it. The new leaders felt it incumbent on them, therefore, not only to do their duty by the State but also in some way to retrieve the good name of their party.

With a considerable sum spent for improvement and the waterways no better fitted than before to handle a larger through traffic, the canal question could not be ignored. The people were in no mood to temporize and they expected some definite, constructive policy. And so it is that we find canal advocates beginning anew during the winter of 1898-1899 to rally their forces for further contest. And we find too the State officials seeking information to guide both themselves and the people at large in determining what was the best thing to do.

The New York Board of Trade and Transportation and the Buffalo Merchants' Exchange have been at the forefront of the canal battle line for the past quarter century and more. At this juncture it was the New York organization, and particularly its indefatigable canal workers, Frank S. Gardner, secretary, and William F. McConnell, assistant secretary, that first joined the fight. In the fall of 1898 the Board, fearing that grave danger threatened the very existence of the State canals, appointed a special committee to confer with other commercial organizations and with the friends of the canal generally throughout the state for the purpose of reviving the sentiment for canal improvement and, if advisable, calling a State canal convention.

In the following winter the Board sent Mr. McConnell on this mission through the state, but the effort proved an entire failure. In a report to the Board a year later the committee on canals said that "on the first day of January, 1899, the canal improvement movement seemed dead beyond hope of resurrection. The temper of the people and the Legislature forbade any attempt at legislation looking to a continuance of the improvements. The policy of the Governor was undefined. With a view to revive interest, this Board sent Mr. Wm. F. McConnell to visit representative men and organizations in the interior of the state. Emphatic opposition and discouragement were found everywhere. The old friends of the canals had lost heart, and many of them were openly opposed to any further attempt to save the canals. We were unable to secure a single promise from any organization or individual for coöperation in an attempt to revive the canal movement. At that time the secretary of the board suggested the calling of a State convention on the broader ground of State commerce. He contented that State commerce embraced canal commerce; that the canal question would necessarily become prominent in any discussion of State commerce, and he predicted that the canal question would thereby be revived and possibly become the overshadowing topic in any representative gathering of the businessmen of this State. It was conceded everywhere that something must be done for our commerce, but no plan or policy had been formed, no measure outlined."

The Canal Improvement Union, which came into being in 1885, had been allowed to go out of existence with the beginning of the nine-million improvement. With no prospect of reviving this Union or of forming any new organization which should consider canal matters exclusively, the suggestion mentioned in the preceding paragraph was carried out and a call was issued for a State Commerce Convention. But before going on with this subject we shall see what steps the Governor was taking to solve the canal problem.

On March 8, 1899, Governor Roosevelt appointed a body of seven men to serve on what is known as the Committee on Canals. This has sometimes been called the Governor's Advisory Committee. A month earlier, on February 8, the New York Board of Trade and Transportation had addressed a communication to the Governor and on the same day had adopted resolutions which were sent to him, in each of which it was declared that the time had come for radical measures if New York were to preserve her proper commercial position. The resolution went on to recite that New York had not kept pace with the gigantic strides of sister states, the Dominion of Canada or competing ports in the way of improving or enlarging its canals and providing terminal facilities, and that, unless the abuses of railroad discriminations, elevator charges, wharfage exactions, port charges and all other kinds of taxes on commerce were corrected at once and the canals improved without delay, it was certain that New York would soon be compelled to surrender her commercial supremacy to more active and far-sighted competitors. Doubtless these communications helped to influence the Governor in his action.

The Canal Committee consisted of five citizens of New York state, General Francis V. Greene, of New York city, George E. Green, ex-Mayor of Binghamton, John. N. Scatcherd and Major Thomas W. Symons, U.S. Engineers Corps, of Buffalo, and Frank S. Witherbee, of Port Henry, and two State officials, Edward A. Bond, State Engineer and John N. Partridge, Superintendent of Public Works. General Greene and Major Symons were West Point graduates and army engineers of wide experience. Mayor Symons, as we have seen, had already given the New York State canal question careful study. The other members were men of business who were versed in transportation problems. It is said that ex-Mayor Green represented anti-canal sentiment, being himself opposed to canals when the committee began its investigations, but that he had become a staunch canal advocate by the time the committee's work was finished.

The Governor began his letter of appointment to the several members of this committee by saying, "I am very desirous of seeing the canal policy of the State definitely formulated," and he closed the letter with the words, "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."

The duty of the committee, therefore, was that of formulating a State canal policy, and, as we shall see later, such proved to be the service it performed. The committee spent nearly a year in making its investigation and during this period there was so much uncertainty as to what the findings would be that little could be done by canal men except to await the report. There was one step, however, which waterways advocates could take, and the preliminary call for a State Commerce Convention, of which mention has already been made, went out in May, 1899. In order to understand how through this and other agencies the apathy on canal matters throughout the state was gradually turned into new enthusiasm, we must look first at the objects the promoters of this convention hoped to attain, as set forth in the call, and then at the work done by the convention. In the call we read:

"How may commerce and manufactures be increased within the State of New York is the question for the State Commerce Convention to consider. What means may be employed for the advancement of these great primary interests?

"The first practical step in that direction is to get together. No part of the State but is deeply interested in this question. Every part of the State should be represented.

"The second practical step follows, viz., discussion, the presentation of needs, the statement of propositions, the suggestion of and agreement upon measures for a betterment of conditions.

"The third practical step is to unite the influence of all sections represented to secure from the Legislature the enactment of the measures which may be agreed upon."

The convention met in Utica on October 10 to 12, 1899. There were present delegates from 53 chambers of commerce, boards of trade or other business associations, and four county boards of supervisors; also the mayors of 11 cities and the presidents of 19 villages. Hon. John D. Kernan of Utica was elected permanent chairman. One of the three days was devoted chiefly to canal and canal terminal questions and strong canal resolutions were adopted with but one dissenting vote.

In speaking of this convention, Frank S. Gardner, who was elected as one of its secretaries, says:

"The greatest enthusiasm over the canal question was immediately aroused throughout the State, and as had been anticipated it again became the most prominent State issue. So strongly was the influence felt at once that both of the great political parties were easily induced to place planks in their platforms which endorsed the improvement.

"The resolutions of the conventions as printed in the abstracts of the proceedings expressed the policy and wishes of the commercial interests of the State but they can give no conception of the labor involved in presenting them to the Legislature, in spreading them abroad among the people and in meeting and finally defeating the forces of the opposition. The State Commerce Convention served the purpose for which it was called into existence, to revive the discussion of the canal improvement question at a time when it appeared to be a lost cause. It not only revived the discussion, but it brought to the support of the canals thousands of the most influential business men and politicians in the State."   ¹

During the summer and fall of 1899 the committee on canals of the New York Produce Exchange held a series of meetings for discussing the canal problem. The result of its deliberations was the adoption of a resolution favoring the construction of a canal of a depth of not less than fourteen feet of water and corresponding width, with a new alignment of canal, if necessary, by canalizing rivers. In October this committee received the State Committee on Canals, at the suggestion of the latter, and expressed its views on the subject of canal enlargement. A little later the Produce Exchange invited the commercial organizations of Greater New York to meet its canal committee for a consultation relative to the State canals. This meeting was held on December 12 and in addition to the commercial organizations the State Committee on Canals was present.

In pursuing its investigations the State Committee on Canals held various public hearings and conferred with interested business men and also sought through correspondence the opinions of many who were qualified to give helpful information or advice. The meetings with the Produce Exchange were in line with this policy. These meetings are chosen for mention here because they are typical of what was taking place and also because this was the most prominent among the organizations or individuals to recommend an enlargement somewhat like the plan which was eventually adopted.

The Committee on Canals carried on its work with zeal throughout the year 1899. One of the members, Mr. Witherbee, visited Europe during the summer and made a study of the canals of France, Belgium and Germany. The Committee called to its assistance distinguished engineers and experts in canal matters and in its report it was able to present a document replete with well-considered and authoritative statements, supplemented by a large collection of valuable information, the statistical tables and data relating to canals and commerce being compiled by the Committee's competent secretary, John A. Fairlie.

For the welfare of the canals a committee such as this proved itself was indispensable. The people of the state had evinced a willingness to make whatever improvement seemed best, but after the failure of the nine-million project they were bewildered and distrustful and they needed guidance, and it was necessary that their leaders and advisers should be those in whom they could have implicit confidence. The personnel of the Committee, together with Governor Roosevelt's well-known reputation for straightforward dealing, furnished ground for this confidence and the report when it was rendered gave evidence of being an able, unbiased and authoritative decision.

On January 15, 1900, the Committee on Canals transmitted its report to the Governor. It recommended that the Erie, Oswego and Champlain canals should not be abandoned but should be maintained and enlarged and that the Black River and the Cayuga and Seneca canals should be maintained as navigable feeders but not enlarged at that time; that the project of a ship canal to enable vessels to pass from the Lakes to New York city or beyond without breaking bulk was a proper subject for consideration by the Federal government but not by New York state; that the enlargement of the Oswego and Champlain canals be completed according to the 1895 project, the estimated cost being $2,642,120; that the State should consider two projects for enlarging the Erie canal, first, to complete the nine-foot deepening of channel but with locks capable of passing boats 125 feet long, 17 1/2 feet wide and 8 feet draft and 450 tons capacity, one of the double locks to pass a single boat and the other to pass two boats traveling tandem, and with pneumatic or mechanical lift locks at Cohoes and Lockport and new locks at Newark and Little Falls, a new canal by river canalization between Clyde and New London and from Cohoes to Rexford and possibly to Little Falls and a new route from Cohoes falls to the Hudson river, this project being estimated to cost $21,161,645, or second, to construct a canal along the same route but of sufficient size to carry boats 150 feet long, 25 feet wide and of 10 feet draft and a cargo capacity of 1,000 tons, and with locks about 310 feet long by 28 feet wide, this project, estimated to cost $58,894,668, being the one recommended; that money for the improvements be raised by 18-year bonds to be paid by taxes levied on counties bordering the canals, the Hudson river and Lake Champlain; for the efficiency of the canals that all restrictions as to the amount of capital of canal transportation companies be removed; that mechanical traction be substituted for draft animals and mechanical power for hand power in lock operation; that the force of canal operatives be organized on a permanent basis; and the unbalanced contract bids be made impossible by a revision of the laws.

The Committee in its report sets forth in considerable detail its reasons for the recommendations it made. In our present study it is not necessary that we should review these discussions. The report is readily available to anyone who desires to examine it. It is important to know, however, that the arguments and the conclusions seem to have been convincing to the public and to have furnished a definite and satisfying policy for the people of the state to adopt. The comprehensiveness of the report tended toward this result. In addition to these discussions it contained the detailed estimates, reports of the engineers, a report on European canals, a study of costs of transportation by various sizes of boats and canals, copies of correspondence, the minutes of hearings and a valuable collection of statistics and canal data.

The report also discusses at some length the two alternative propositions which might have been chosen in place of the one recommended -- one, the abandonment of the State canals and the consequent dependence solely on railroads, and the other, the building of a ship canal. These are questions which we must comprehend if we are to perceive the trend of events and know why the people of the state both decided to improve the canals and also determined on the barge canal type of improvement. To show by what reasoning the Committee arrived at its conclusions in these matters a few excerpts have been chosen.

"The question which now confronts us," says the report, "is whether the railroads, with their large capital and scientific management, their durable road beds, 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 they can do this, then it is obviously unwise and improper to expend any more public money upon a method of transportation which, however important in the past, would no longer be able to compete with other and improved methods. The determination of this question seems to us to lie at the very foundation of the canal problem, and we have therefore given it the utmost attention."

After considering the facts carefully the Committee concludes, "In our judgment, water transportation is inherently cheaper than rail transportation." In further consideration the report says:

"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... . If the water route is abandoned, then New York must take its chances in the railroad competition with Portland, Boston, Philadelphia, Baltimore, Newport News and Savannah. In this competition it is hardly on an equality even, but is subject to many disadvantages; ... If the city and State of New York are to take their chances in open railroad competition, then we must look to see the relative proportion of exports through New York constantly decreasing, as it has been for the last ten years.

"It is evident that the water route via the St. Lawrence on the one hand, and the short rail lines to Gulf ports on the other, will inevitably prove serious competitors in the future to the export trade of New York. If it desires to retain its export grain trade, it must improve its own water route to the utmost limit of which it is capable; it cannot retain this trade by taking its chances in the railroad competition of a half a dozen routes from the lakes to the Atlantic.

"It is not alone, however, the export grain trade which requires enlargement of the Erie canal. ... But the changes which are now taking place in the iron trade give reason to believe that if an adequate waterway can be secured between Lake Erie and the Hudson river the center of the iron industry can be brought within the state of New York. ... We believe that a suitable enlargement of the Erie canal at the present time is justified by the prospect of its use in connection with the manufacture of steel and iron and shipbuilding, fully as much as its original construction was justified by the prospect of transporting breadstuffs.

"The possibilities of manufacturing development along the banks of the Niagara river between the Falls and Buffalo should not be overlooked in considering the transportation problem."

Concerning the ship canal project the Committee says:

"It seems to us that there are certain insuperable difficulties in the way of such a canal ever being a success, no matter by whom constructed, It is intended to be used by a vessel which can navigate the ocean, the canal and the lakes. We do not believe that such a vessel can be constructed so as to be economically and commercially successful. The ocean steamer is built to withstand the fierce storms of the Atlantic, and costs in its most modern type about $71 per net ton of carrying capacity.   ²

"The vessel to navigate the lakes is built to withstand less frequent and dangerous storms; it has less draft, on account of the smaller depth of the harbors on the lakes, and it is built much less substantially; its cost is about $36 per ton of carrying capacity.   ³

"The cost of a canal fleet, consisting of a steamer and three consorts, with a total cargo capacity of 3,900 tons, according to figures furnished us by boat builders, would be $28,500, or $7.31 per ton.

"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 1000 tons' capacity going through from the lakes to New York and there transferring its cargo to the ocean steamer."

The Committee gave $62,000,000 as its estimate of cost for carrying out its recommendations. This is a rounded form of a total of $61,536,788, made up of $58,894,668 for enlarging the Erie canal to a size suitable for barges of 1,000 tons capacity, and $818,120 for the Oswego canal and $1,824,000 for the Champlain canal, each to be completed to a nine-foot depth along the line of the improvement already begun. The Committee stated that in its opinion the estimates were sufficiently accurate for submitting the proposition to the voters at the next November election, but it advised that in the meantime the Legislature appropriate $200,000, to be immediately available, so the detailed surveys could be completed during the current year, since such surveys were indispensable, so the Committee said, to the proper making of contracts.

Ten days after the Committee on Canals presented its report, or on January 25, 1900, the New York Commerce Commission submitted to the Governor a voluminous report of about 2,200 pages, together with a book of maps. This is the commission which was appointed by Governor Black in 1898 to inquire into the causes of the decline in New York commerce. The commission had held its hearings not only in New York state but also in the West and in addition had visited all the important seaports which were business rivals of New York city.

In Governor Roosevelt's message transmitting the Commerce Commission's report we find several paragraphs pertinent to our study. His words are important because they reveal the opinion of a careful thinker, one who characteristically was incisive in reaching the core of things. Moreover he did not let political expediency control his honest convictions and was fearless in voicing his opinion. We shall see that within the next four years one of the sorest trials of canal advocates was the hesitancy of politicians to espouse a cause which they feared might be unpopular with some of their constituency and so might injure their personal prestige. The Governor sent this report and also that of the Committee on Canals to the Legislature on the same day. We quote from his message. If one is at all puzzled to know why the canal problem would not go down, even after many rebuffs, as we shall see later, perhaps he may find the reason in the following paragraphs:

"The Canal Committee of which General Greene is the chairman (the report of which I am transmitting at the same time) was appointed solely to consider the canal problem. The Commerce Commission was appointed to consider the whole problem of New York's loss of commerce, inquiring into all the causes, and seeking to find out all possible remedies. It speedily discovered, however, that the question of the canal was really the central question around which hinged all others concerned with benefitting the commercial development of New York or arresting the decline of this development. This is a further proof, if any be needed, of the immense importance of the canal and of the extreme unwisdom of abandoning it as an outworn institution.

"The commission, as of the first importance, recommends action on the State canals themselves. They agree with the committee of which General Greene is chairman that in the first place, the canals cannot be abandoned; that in the second place, a ship canal ought not to be built by the State; and that in the third place, the present canal must be enlarged."

There is another paragraph which we must quote, not because of its bearing on the subject immediately in hand but because it helps us to understand why, after their nine-million-dollar experience, the people were willing to authorize another and vastly larger expenditure. We believe that those who know the facts have come generally to accept the view expressed here by the Governor. He says:

"I desire especially to call your attention to that portion of the Commerce Commission's report which shows the main source of the trouble over the nine million dollar expenditure for improvements under the Act of 1895. The Commerce Commission's report makes it perfectly clear that there never was sufficient authority, or indeed any authority, for supposing that this nine million dollars would be enough to complete the work, and that a sum was named which was entirely insufficient. It was doubtless believed to be easier to get the small sum than a large one."

There was no mistaking Governor Roosevelt's position on the canal question. New York owes him a debt of gratitude for taking the initial step in solving her problem, just as the nation is beholden to him for the Panama canal. He concluded his message by saying, "Prompt action should be taken to remedy the evils complained of. We cannot afford to rest idle while our commerce is taken away from us, and we must act in the broadest and most liberal and most energetic spirit if we wish to retain the State's commercial supremacy."

The Commerce Commission reported that the decline in New York's commerce had been steady and continuous for many years but more pronounced in recent years and had then reached serious proportions of actual loss; that, while New York had been steadily losing, Montreal, Boston, Baltimore, Newport News, New Orleans and Galveston had made substantial gains; that this loss was due in great measure to a discrimination against New York in railroad rates imposed by an agreement, known as a differential agreement, between trunk lines of the Atlantic seaboard, and as a result New York was prevented from receiving the benefit of her natural advantages; that this discrimination would be impossible without the participation of the New York Central Railroad Company and as this company had been the recipient of exceptional benefits from New York State its action was particularly culpable; that the principle of differentials is inequitable and unjust both in theory and in practice and New York had suffered much therefrom and should use every means not only to have it abolished but to render its restoration impracticable; that to abolish the differential would not only result in New York regaining the commerce then diverted to other ports but would also benefit the producers and exporters of the West; that the demand that the New York Central Railroad withdraw irrevocably from the differential agreement was made understandingly; that the State had it within its power through adequate improvement of its canal not only to prevent further loss of commerce but also to regain that already diverted; that this result could be achieved through completing the nine-foot deepening of the canals at an expenditure not to exceed fifteen million dollars, but to receive the full benefit of this improvement the State should provide canal terminals at Buffalo and New York; and that, while thus providing for competition with rail rates sufficiently to render difficult if not impossible a discrimination against New York, high port charges in New York city should be reduced.

The commission made eight recommendations for immediate legislative action, as follows: That the canals be completed according to the nine-foot plan without delay, a referendum to authorize fifteen millions for the purpose to be submitted to the people at the next general election; that canal terminal facilities be provided at New York and Buffalo; that the act regulating the fees and charges at elevators be amended so as to make evasion difficult, to fix a maximum rate and to provide a penalty for violation; that the act limiting to fifty thousand dollars the capital stock of corporations carrying on a navigation business on the canals be repealed; that the old provision be restored, reserving the canal piers in New York city exclusively for canal boats; that an act be passed prohibiting the conveyance in perpetuity of any land under water within the limits of New York city, but providing for the lease of such land with power of renewal; that legislative authorization should be given each year to enable New York city to carry out its plans for the construction of piers and the improvement of dock facilities, the city being urged speedily to supply the demands of commerce for modern piers, and the Legislature to aid such endeavors; and that New York city be authorized to acquire possession of the water-front between Gansevoort and Twenty-third streets.

This commission was appointed to investigate conditions which were universally recognized not only as existing but also as being detrimental to the interest of both the city and the State of New York. As was to be expected it found abundant evidence of these conditions and of their detrimental character, but the tenor of its conclusions was anything but despairing; rather a compelling optimism appeared in its vision of what the future would hold if proper precautions were taken. We quote some of its words of confidence, but they are words of admonition as well.

"It is within the power of the State," said the Commission, "to retain not only her commerce of the present; to achieve in the future not only the supremacy of the past; but to excel all former achievements. Her ultimate possibilities can be accomplished only through a comprehensive knowledge of the many divergent interests entering into commerce and transportation, and a systematic attention to commercial requirements, not possible of attainment within a limited period, nor by a temporary commission, nor by local officials with jurisdiction confined alone to either one of the two cities forming the termini of her system of water transportation.

"With a foreign commerce that still approximates one-half of the total foreign commerce of the nation, the part of wisdom would dictate as complete and well considered a method of official supervision as is usual among nations."

Footnotes:

    ¹   Buffalo Historical Society Publications, Vol. XIII, pp. 10-11.
    ²   "Report of Major T.W. Symons, in Report of Chief of Engineers U.S. Army for 1897, p. 3174."
    ³   "Ibid, p. 3176. These figures were based on the actual cost of vessels constructed between 1893 and 1896. At present time, owing to the increased price of steel, the cost of each would be largely increased."