JAMES RENWICK, LL.D.

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CHAPTER XVI.

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Memorial is presented to the Legislature. – Final Report of the Old Board of Commissioners. – Law to provide for the Improvement of the Internal Navigation of the State. – The New Board of Commissioners enter upon their duties. – Their Report. – Vast amount of field-work performed under their direction. – Scheme of Finance. – Law of Congress for promoting Internal Improvements. – Its Rejection by President Madison as unconstitutional. – Modifications rendered necessary in the Scheme of Finance. – The Bill to authorize the construction of the Canal becomes a Law. – Opposition of the City Delegation. – The Canal Policy made by them a party question.

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The memorial of which we have spoken in the last chapter was signed by a great number of persons in the city of New-York; it was enforced by a recommendation from the corporation of that city, and seconded by the action of public meetings in Albany, and nearly all the towns and villages to the west and north of that place. It was presented to the Legislature about the same time with the final report of the old board of commissioners. This report refers to the number and respectability of the applications before the Legislature in favour of an immediate prosecution of the canal, as an evidence that its advantages were appreciated by the citizens of the state. The report, in addition, recommends the construction of the Champlain Canal, and urges the superiority of the Erie over the Ontario route. The original draught, as in former cases, had been made by Morris; but, in consequence of alterations made in it by the other commissioners, he declined to sign it.

The time had passed when eloquent declamation could be received as a substitute for sound practical views. The community had been excited to the examination of the project upon its real merits by the brilliant effusions of Morris, but had, on consideration, seen that they pointed out schemes which were impracticable. To this expressed will of the people the commissioners found themselves compelled to conform; and, in spite of the respect they entertained for the character of that distinguished man, they, with absolute unanimity, concurred in the amendments and alterations.

Clinton, after the presentation of the memorial, proceeded to Albany to enforce, by his personal and political influence, its favourable reception, and to urge its being acted upon. Although many friends of the measure were desirous of obtaining authority to commence the work, no more was gained from the Legislature than the means of proceeding with the inquiry, in such manner that the surveys, which had hitherto been confined to mere exploration, should be directed to the actual location, and the rude calculations made from partial researches extended into close and accurate estimates of the probable cost. Clinton and the other memorialists prudently abstained from jeoparding their cause, by insisting upon any committal on the part of the state, until such estimates could be submitted, or any appropriation beyond the cost of survey, until a scheme of finance had been prepared adequate to the magnitude of the operation.

No time was lost by the commissioners in entering upon their duties, and sufficient corps of engineers were forthwith organized. Three of the commissioners assumed active duties in the field, and, dividing the work into the same number of parts, pressed the performance of the surveys in person. These gentlemen, thus devoting their whole time to the work, were entitled to, and received a compensation for their services. Clinton and Van Rensselaer, who performed at least equal services in another manner, would accept of no remuneration.

Clinton devoted much attention, during the recess of the Legislature, to the consideration of a scheme of finance. The first point to be ascertained was the possibility of borrowing a sufficient amount, provided satisfactory security could be exhibited. For this purpose he placed himself in communication with the most intelligent merchants of the City of New-York; and, as the intercourse was reopened, he had an opportunity, which he sedulously improved, of consulting the travellers who had repaired to England on the cessation of hostilities, and were from time to time returning. All accounts seemed to encourage the hope that no difficulty would be experienced in raising sufficient funds. A more important obstacle was therefore to be overcome, that of devising a system of finance. The Legislature had indeed, on a former occasion, clothed the old board of commissioners with power to borrow five millions of dollars on the simple pledge of the faith of the state. Clinton, whatever may have been his opinion on a former occasion, was now satisfied of the cardinal principle, that no debt ought in any event to be contracted by a government, unless a fund were at the same time provided for paying its interest and for its final redemption. The income of the canal itself might, indeed, be calculated upon for a part, if not the whole, of the latter object; but he felt convinced, that even if the absolute maintenance of the public faith did not require an income to be provided from other sources, yet the rate of interest at which a loan could be procured would be much lessened by exhibiting to the lender a pledge of resources which would render his remuneration sure, even were the project on which the capital should be expended to fail.

The commonplace-book of Clinton abounds with extracts made by him at this period from the best authors on the principles of finance and the management of a public debt, and manifests how attentively he studied this subject, and what labour he devoted to master the details.

The great success of the New-York canals has stimulated almost every other state of the Union to similar enterprises. Many of these have been judiciously planned and successfully prosecuted. They have furnished in such cases revenues which have at least paid the interest on their cost. There are, again, other instances, in which the plan as been so far judicious, that new wealth has been created more than equal to the expenditure on the improvement, but where the income has barely defrayed the cost of maintaining the work. The ease with which New-York has paid its interest, and the rapidity with which the sinking-fund has accumulated to the full amount of the original debt, has raised the credit of the nation in foreign marts, and has afforded to other states facilities for loans which even New-York did not at first enjoy. The mere pledge of the public faith has, in consequence, been of late found sufficient to obtain a loan. It has thus happened, that, in almost all recent instances, the wise precaution taken by the State of New-York has been neglected. Public works have been commenced to an extent wholly unauthorized by the business and population of the states to which they belong; no other funds than the prospective income of the finished work have been thought of; and, in almost all cases, the borrower, instead of endeavouring to ensure the redemption of the debt by a fund accumulating at compound interest, has trusted to new loans to meet the interest itself, and thus allowed the debt to accumulate in the same rapid manner. Such is the consequence of this method of accumulation, that if, on the one hand, the smallest excess of fund over and above the interest must in the end extinguish the debt, on the other the debt will increase so fast, that the most brilliant final success will hardly be sufficient to reduce it when thus compounded.

The system of borrowing without an intermediate provision for the interest is besides objectionable, inasmuch as the rate of interest will be continually rising upon the borrower, until it may happen that the funds for the completion of the works of improvement cannot be obtained, and thus the anticipated revenue may never be realized.

It is by a neglect of this cardinal principle that the new states of the Union are at this moment suffering under the evils of a total prostration of credit, and public works, undertaken and carried on at a vast expense, are lying unfinished, and, consequently, unproductive.

The question whether a public debt is to have its interest and final redemption provided for at the moment it is contracted, or whether it is to be sanctioned by a simple pledge of the public faith, has been among the distinctive characters of the two great schools of politicians which have divided our country from the time it became independent. At the head of one school stands Hamilton, and at that of the other Jefferson. In the practical action of the general government, no injury has arisen from the predominance of the opinions of the latter. The great debt contracted during the war of 1812 has been redeemed by the proceeds of the national domain, and the people, as a body, have not felt it as a burden. But the states stand in a very different position; they have, as a general rule, no landed estate to resort to for the payment of their loans; and any great debt contracted by them, beyond the limit which can be sustained by an existing revenue, must be followed by breach of faith, or even by absolute bankruptcy. It is highly to the credit of Clinton, that, educated in the school of Jefferson, and holding all its tenets, he was enabled to free himself from its shackles in this point of policy.

The canal commissioners reported in due season to the Legislature. It appeared that 440 miles of canal had been traced upon the ground, and the cost of construction estimated. This was found to be nearly six millions of dollars; and it is one of the peculiar features of the history of the canal, that, in spite of the amount of work in survey and calculation being greater than had ever before been performed in so short a space of time and at so small a cost, the actual construction has differed less from the estimate than in almost any similar instance. The commissioners, in order to ensure this, had laid it down as a principle, that every probable expense should be included in the estimate, and every possible contingency provided for. Such, however, was the distrust, arising from experience of the inaccuracy of estimates, that many of the best friends of the measure feared that the anticipations of the commissioners were to sanguine, while those opposed to it maintained that the estimates were made up with a view to deceive, in order to embark the state in a project which, if once begun, must be completed, whatever might be the cost.

When the report had been presented and referred, the committee to whose charge it was intrusted asked from the commissioners the draught of a law providing for the construction of the canal and creating a system of finance. This draught was made by Clinton. The scheme of finance created a canal fund, vested in a board, and pledged the faith of the state that it should not be diverted. No pledge was originally given in the draught of the credit of the state, to provide for either principal or interest, beyond the fund pointed out and made sacred. The question of finance appeared to have been much simplified, at the moment the report was presented, by an act which had just passed both Houses of Congress. By this act, the income of the stock held by the government in the Bank of the United States was directed to be distributed among the several states for the purpose of internal improvements. Under it the State of New-York would have received $90,000 per annum, which would have been equivalent to the interest on a loan sufficient to meet the estimated cost of one fourth of the canal. Upon this liberal measure, which would have diffused wealth and happiness throughout the Union, Mr. Madison set his veto in the very last moment of his administration. The cause assigned for this measure was, that the law was unconstitutional; yet he at the same moment approved a law making a large appropriation for the Cumberland road, and another making a grant to a road in Tennessee. The nice casuistry by which it has been decided that certain public improvements fall within the granted powers of the general government, while others do not, is beyond the comprehension of those who are not accustomed to thread the mazes of metaphysical investigation; while the dictates of plain common sense would seem to establish the conclusion, that the framers of the Constitution could never have intended to exclude the power of granting the surplus funds of the general government, in a fair ratio of distribution, among the individual states. The truth is, that the probability that the Union could ever have a surplus of income over expenditures seems never to have occurred to the framers of the Constitution, nor was there any precedent in modern times whence such an anticipation could have been drawn.

Those have not been wanting who have ascribed this act of Mr. Madison to a desire to prevent the construction of the New-York canal. If the admitted patriotism of that distinguished citizen be urged as evidence that such could not have been the case, still the assertion that such were his motives has been maintained by the most plausible arguments. Clinton was at the moment, by his strenuous exertions in the cause of internal improvements, acquiring a popularity, which one whom he had presumed to rival in the affections, not only of the country at large, but of the democratic party itself, might well have desired to lower. The State of New-York was to derive the most direct apparent benefit from the grant; and a Virginian might well have desired to check that prosperity which was soon to place New-York in the highest rank for population and wealth, and which has, in the end, substituted the "Empire State" for the "Old Dominion" in standing in the Union. Personal rivalry, political hostility, and local prejudice, may then have reasonably been expected to exist in the mind of Madison, if it had been capable of entertaining such feelings.

The loss of so large an anticipated source of income rendered it necessary to amend the project of finance submitted by Clinton, after it had been reported to the House of Assembly. Mr. Tibbitts, then a member of the Senate, claims that the whole of the important changes which were made in the bill, grew out of his suggestions.

Clinton, in a history of the proceedings, published under the signature of Tacitus, ascribes great improvements in his original draught to the "useful suggestions of Messrs. Van Rensselaer (J. Rutsen), Tibbitts, and Few." One of the features introduced into the bill was unquestionably contrary to the wishes of Clinton. A large duty was levied by the authority of the state upon sales at auction in the City of New-York. This had at first been applied to local purposes within that city; one half had then been withdrawn for the general purposes of the state, and the bill, as passed, deprived the city of the other half, and threw the whole into the canal fund. To this Clinton was opposed. He would have preferred to see the execution of his darling project delayed rather than give his sanction to an act of injustice. The auction duty has been represented, and thus its diversion into the general funds of the state justified, as a tax upon the consumer, when all who have watched its operation know that it falls almost wholly on the importers of the City of New-York who voluntarily submit to it as the price of a more speedy and safe return for their capital.

On the other hand, a feature which contributed mainly to the passage of the bill, and which was just in itself, was introduced by William A. Duer. He was a representative from one of the counties which could not, in any event, be benefitted, and might possibly be injured by the canal; and his constituents were, in consequence, opposed to it, particularly if it would have subjected them to any risk of taxation for its support. In order to conciliate this opposition, he added a clause to the bill, by which the lands for twenty-five miles on each side of the canal were made liable to taxation. This went far to satisfy those parts of the state which derived no immediate advantage from the construction of the canal, and was not objected to by its friends. Circumstances have rendered it unnecessary, but the strict justice of the measure, and its expediency at the moment, no one can doubt.

In the Senate, Mr. Van Buren, the present President of the United States, who had in the preceding session opposed any measures beyond those of inquiry, and had, in consequence, been considered as hostile to the canal, came out as its supporter; and, not content with supporting the bill as it came from the Assembly, proposed the addition of a clause pledging the general credit of the state in addition to the funds set apart as sacred for the redemption of the canal debt. This addition, if admitted to have aided in obtaining the necessary funds, has not been salutary either to the State of New-York, or as an example to other states. The revenue of the canal fund, and the income of the canal, if kept separate upon the books of account from the general finances of the state, have, in point of fact, been mixed with them into one common mass. The state, apparently possessed of ample funds, has abandoned taxation as a source of revenue for its annual expenses, and is thus largely in debt to the canal fund; while the enlargement of the canal itself, and the extension of the benefits of internal improvement to other regions of the state, has been retarded, if not prevented altogether.

That the canal shall, by its operation, have done away the necessity of continuing to resort to an annual tax, is, however, one of its most popular features.

After a long and severe contest, the bill at last passed both houses of the Legislature. This result may be ascribed almost wholly to the exertions of Clinton, who, going before a legislature, a majority of which was either actually opposed or wholly indifferent on the subject, brought public opinion to bear upon its members with such force, that opponents were converted or silenced, and the indifferent convinced.

Even after the battle had been fought in the Legislature, a difficulty remained to be overcome in obtaining its passage through the council of revision. This was achieved by the vote of Chancellor Kent, who had doubts for a time as to the feasibility of the project; but, according to his own statement, was brought to give a casting vote in its favour by the very arguments which Governor Tompkins urged against it.

Among the steady and determined opponents of the canal bill, in every stage, were the delegation in Assembly of the City of New-York, and the senators of the Southern District. The former had been elected in the place of a delegation which was friendly to the canal, and in declared opposition to the name and the policy of Clinton. Hostility to him prevailed over all considerations of public benefit; and this being made the ground of their vote on the canal question, converted the decision of the Legislature into a personal triumph.

It thus happened, as in more than one other instance, that the measures adopted by the political opponents of Clinton only brought out in more distinct relief the importance of his agency in preparing the way for that decided expression of public opinion by which the construction of the canal was in a manner forced upon cold friends or decided enemies. By making the canal policy of the state a party question, they compelled Clinton to do the same, and the attainment of the end for which he strove became to him a political victory. It is thus, by the necessity under which he was placed of bringing the whole weight of his influence to bear upon the canal question, and the firm and unflinching manner in which he ventured his whole political fortune on its result, that his name has become inseparable from the history of the canal policy of the state. All other persons, however useful they may have been in promoting the desired result, made the canal no more than a secondary consideration in their respective projects of ambition. Its success or failure would neither have elevated nor depressed them in the public view, while with Clinton it was the primary object of his aspirations; and its success so far exalted him in the eye of the people, that his political opponents were finally compelled to enter with apparent ardour into the support of the canal policy for the purpose of defeating him.

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Transcribed from the original text and html prepared by Bill Carr, last updated 12/10/99.