After the opening of the canal, one of the first troubles experienced came from the rapid movements of packet and light freight boats, which were having a destructive effect on the banks of the canal by driving the water along the face of the banks, washing them away, and depositing the earth in the bottom. These boats also had the right of way in passing locks – another cause of dissatisfaction among boatmen – so that it was attempted to reduce their number to two daily, and in the course of time to abolish them entirely, for upon investigation it was found that the revenue collected from these packets amounted to about one-twentieth of that collected from the freighters. 1 The sides of the prism were repaired by building a slope wall of stone in some places and of wood in others; the banks were also raised in places. Up to 1828 about two hundred and fifty miles of canal had been protected in this way, at a cost of about $1,600 per mile, where both banks were walled. As early as 1822 it had been found necessary to enact a law (chapter 274), to limit the speed of boats to four miles an hour.

In 1834 came the first step toward an enlarged canal. The canal commissioners submitted a special report 2 to the legislature in relation to rebuilding the aqueduct at Rochester, taking an additional feeder into the Erie canal at Camillus on the Jordan level and doubling the locks upon the Erie canal east of the village of Syracuse. Traffic had increased so rapidly and the crowding of boats, especially on the eastern section, had become so great as to demand some relief. The commissioners, therefore, suggested the doubling of locks as a possible remedy. In speaking of this in 1851, State Engineer Seymour said: "As early as 1832, the project of doubling the locks on the Eastern division began to be a subject of conversation. In 1834 the Canal Commissioners made a special report to the Legislature . . . the first official allusion to the necessity of enlargement." 3 However, as early as 1825 the canal commissioners had perceived the need of greater facilities and in their report to the Legislature on March 4, of that year, had suggested the propriety of doubling the locks. As the construction of double locks appeared extremely difficult at some points, they "presumed that the experience of two or three years more, [would] satisfy the public, that it [would] be proper to commence the construction of another canal parallel with the eastern section," proposing a location on the north side of the Mohawk between Utica and Schenectady.

Governor William L. Marcy, in his annual message to the Legislature of 1834, called attention to the phenomenal increase of western settlement and its existing and future requirements for transportation, saying: "If our canals are to be what a wise management cannot fail to make them – the principal channels for this trade – we must calculate its extent, and make them adequate to this object." But New York State, he continued, could not be expected to enjoy the benefits of the western trade without effort, as other Atlantic states were making powerful efforts to remove the natural barriers which hindered their competition for this prize. Canal traffic was always to be increased by bettering facilities of transportation and reducing expenses. By enlarging the capacity of the Erie canal the cost of transportation would be diminished. Tolls were a large factor in this, he said, and had been carefully and judiciously modified by the canal board during the preceding year, with the result of more widely diffusing the trade throughout the West and Southwest. A substantial reduction had been made for the season of 1833, yet, notwithstanding this, the Erie and Champlain canals had received in tolls $1,464,259.98, an increase of $234,776.51 over the year before. 4

Appreciating the importance of this subject, the Legislature passed an act, 5 which authorized the commissioners to build double locks between Albany and Syracuse of such dimensions as they deemed proper. This law also directed the taking of Nine Mile creek as a feeder into the Jordan level, the reconstruction of the Rochester aqueduct and the building of sluices around locks on any State canal. As a preliminary step the commissioners employed Mr. Holmes Hutchinson to examine the sites for double locks and to furnish the proper plans and estimates for their construction, and also for the construction of such works as would be proper to adapt the canal to the use of such locks.

In rendering their report, 6 the commissioners said that, from a careful consideration of the provisions of the act, it was apparent that the Legislature designed to give to the canal and its locks sufficient capacity for whatever transportation the country might require in the future. With the existing capacity of the canal, the section west of Syracuse furnished ample accommodation, and would for some time, but on the eastern section the want of adequate facilities was acutely felt and the crowding was rapidly increasing. In studying the problem of locating double locks, the commissioners considered the subject under three heads: first, what capacity should be given to the canal and locks east of Syracuse, and in what manner it should be afforded; second, what course should be adopted to afford sufficient capacity to the short reaches between some of the locks; third, what should be the lateral distance between the double locks and what their relative location.

"The canals are rapidly accumulating the means for the extinguishment of the debt for which their income is hypothecated. When this object is accomplished, the tolls may, with fair claims of justice, be resorted to, for the means of replenishing the treasury, to an amount, at least, equal to the sum abstracted, for the benefit of the canals, from the general fund." 7

"Whether a resort to a general tax, moderate in amount, in order to provide the means to meet the exigencies of the government, shall be forborne, and a reliance be placed on the chance of deriving sufficient aid for that purpose from the duties on salt, and auction sales; or a debt shall be contracted, with a view to its redemption from the canal revenue, after it is relieved from its present hypothecation, are questions which may with propriety be left to the immediate representatives of the people. If upon due deliberation, you should determine to levy a tax, and leave the other revenues unanticipated and unimpaired, . . . I feel the fullest confidence that the people will cheerfully acquiesce in the decision." 8

The Governor explained that the State was then facing either a loan, which was objectionable, or a direct tax for general expenses, as the general fund, though not originally intended for that purpose, had been used for several years, without being reinforced by the proceeds of taxation, not only for general expenses, but for large appropriations for deficiencies in maintaining the lateral canals, for draining the Cayuga marshes and the like. Not only was this the case, but specific sources of revenue, like the auction and salt duties, had been constitutionally pledged to the canal fund and had contributed to it more than five million dollars. The burden of supplying the deficiency in the revenues of the lateral canals from year to year, he declared, showed the wisdom of our original system of internal improvements and the effect of such a departure from it, and admonished us of the necessity of returning to it. "No government," he said, "that had a proper regard for its public credit or its permanent prosperity, ever contracted a public debt without providing a revenue for the payment of the interest at least, if not for its final extinguishment; and none that neglects to make such a provision, but supplies its necessities, whether ordinary or extraordinary, by loans, and provides for the interest on them by new loans, can long prosecute successfully public enterprises requiring large expenditures. I therefore deem it essential to the success of the system of internal improvements, that you should in some way provide adequate means for paying the interest on the public debt that must be incurred by its further prosecution." 9

Again he said: "I do not indulge the expectation that so unwise a course will be taken as to supply the means required for these purposes, by loans, without creating some special fund to pay the debt that will be thus contracted." 10 But despite this warning, subsequent Legislatures persisted in pursuing this very course.

However, as showing the continued prosperity of the canals, which warranted the expenditure of large sums for improvement, the Governor stated that the income from all the canals and the canal fund for the fiscal year of 1834 was $1,813,418.73. The whole canal debt was then $7,034,999.68, of which $4,934,652.68 was the unpaid balance of the debt created for the construction of the Erie and Champlain canals. For the payment of the balance, funds had accumulated to the amount of $3,002,576.30 The Erie and Champlain canal fund had yielded a revenue during the last fiscal year, beyond all the charges upon it, of $1,035,664.92; the tolls alone exceeded these charges by $587,850.61. Although the tolls had again been reduced in January, 1834, on merchandise and food-stuffs, the income from the Erie and Champlain canals from these sources alone was $1,313,155.84 for the fiscal year. The tolls of the same year were only $11,265.79 less than those of the previous year. The business on the Erie and Champlain canals had, therefore, increased nearly in the ratio of the reduction of tolls. 11

Two subjects then before the public had a marked bearing on canal enlargement. Of first importance was the growing evidence that railroads were fast becoming a factor in the question of transportation and might soon prove to be dangerous rivals of the canals. Even then those most enthusiastically in favor of railways predicted that they would supersede canals, and advocated the plan of "converting the Erie canal into a rail-road." 12 The second subject was a project for a ship canal between Lake Ontario and the Hudson. Both of these matters received legislative notice during the session of 1835, and were the subjects of Assembly resolutions calling for investigations by canal officials.

"A canal may be compared to a common highway, upon which every man can be the carrier of his own property, and therefore creates the most active competition, which serves to reduce the expense of transportation to the lowest rates. The farmer, the merchant, and the manufacturer can avail themselves of the advantage of carrying their property to market, in a manner which will best comport with their interest." 13

"In regard to their relative matters as affording the means of transportation, . . . we find the relative cost of conveyance is, as 4.375 to 1, a little over four and one-third to one, in favor of canals: this is exclusive of tolls or profits." 14

Public sentiment, which demanded that some improvement in water communications be made, was reflected in an Assembly resolution on March 4, 1835, which referred to the consideration of the canal board the proceedings of a public meeting held in Utica on February 5, preceding, to take measures to effect the construction of a ship canal between Lake Ontario and the Hudson, also the resolution of the common council of New York in favor of this canal, together with the report 15 of an engineer, E. F. Johnson, on this project. People were becoming alarmed lest, by the failure of the State to provide adequate means for transportation, other routes would secure the traffic, – as the memorial prepared at the Utica meeting expressed it, saying, "the States of Pennsylvania, Maryland and Virginia, and especially the Provinces of Canada, are making strenuous exertions to divert the trade of this important region through their own territories, and to their own markets," which "render it the imperative duty of the representatives of the people of this State early to undertake, and vigorously to prosecute, such a system of internal improvement as shall promise the most certain success in this generous contest with their enterprising neighbors." 16 In addition, the memorialists said: "The Erie canal, in its present state, will be unable to accommodate any material increase of business; and . . . unless some adequate measures are adopted by the Legislature to secure to this State the advantages of the rapidly increasing trade of the western country, it will seek other channels of transportation and a different market, to the great prejudice of our commercial metropolis, and the loss of revenue and other incidental advantages derived from the passage of that trade through our own internal communications. . . . The plan of doubling the locks, recently adopted on a portion of the Erie canal, though it will doubtless increase its capacity, will afford but a temporary relief; and before that measure can be completed, the steady increase of the business will be found to have kept pace with the increased facilities which will be thus afforded; presenting to us the same alternative which now exists, of creating additional channels, or of yielding to others the benefit of the trade in question." 17

In reporting the results of their investigations on this subject, the members of the canal board conceded that some measures should be adopted to provide for the increased traffic, but disagreed with the Utica memorialists in thinking that a ship canal for either sailing craft or steamboats would be best adapted to meet this need. The difficulty of bridging such a canal seemed insuperable. The fact that steamboats had not yet superseded sailing vessels in carrying property on the lakes led the members of the board to believe that they were not destined so to supersede that kind of boat for the transit of property on lakes or rivers adapted for the use of both, they having been informed "by gentlemen of intelligence and experience in lake navigation, that it would be ‘impracticable as a regular business for steam-boats on the lakes, to tow vessels with safety, unless the vessels were fitted with masts and rigging and sufficiently manned to be conducted by sails in a storm.’ " 18

The report of the board’s engineers, Messrs. Jervis, Hutchinson and Mills, further emphasizes the fact that steam propulsion was not sufficiently developed to be serviceable on contracted channels, and that the cost of carriage by steamboats was not favorably comparable with the rate by ordinary canal-boats, even after the charge for a transshipment had been added. They conclude: "We are of opinion, a canal, designed for boats exclusively adapted to its navigation, and which may be towed by steam-boats on the Hudson, will best accommodate the prominent interest involved in the great trade, for which provision is to be made." 19

"At the last session of the Legislature a law was passed, directing the Canal Commissioners to double the locks, from Albany to Syracuse. This measure will increase the capacity of the canal, and accommodate the trade for a short period of time, but will not sensibly lessen the expense of transportation. It is however quite certain, that the time is not very distant when additional facilities will be necessary; and the Canal Board take this occasion to express the opinion that the enlargement of the Erie canal should be directed at the present session of the Legislature." 20

The engineers in charge of these surveys and the territory covered by each, were as follows: John B. Jervis, from Albany to Fultonville; Nathan S. Roberts, from Fultonville to Frankfort; Frederick C. Mills, from Frankfort to Lyons; and Holmes Hutchinson from Lyons to Buffalo. The reports 21 of the engineers were submitted to the canal board on October 20, 1835, with estimates of the cost of contemplated improvements on both plans of enlargement, and of all the feeders and reservoirs required.

The reports treated at length of the size of aqueducts, the size of new locks and the dimensions of the improved canal, with carefully prepared recommendations on each. Mr. Jervis advised that the trunks of aqueducts be made fifty feet wide, with spans of eighteen feet between piers; that the locks be one hundred and ten feet long between quoins and sixteen feet wide, being placed in pairs, side by side, forty feet apart from center to center. He estimated that for favorable traction the old canal was adapted to a boat of thirty-one tons, a six-foot canal to one of seventy-one tons and a seven-foot canal to one of one hundred and three tons. He advised a seven-foot canal with seventy feet top width, showing that a seven-foot channel would require thirty-seven per cent more water than the old canal. Mr. Roberts favored a lock one hundred and ten feet between quoins and seventeen feet wide, and a canal six and one-half feet deep and seventy feet wide. Mr. Mills submitted plans of bridges for a seventy-foot canal in the type of the lattice Town. He estimated locks one hundred and ten feet long and sixteen feet wide. In relation to the water-supply for the eighty-five miles included in his section, he estimated that the old Erie required 13,755 cubic feet per minute, that 21,644 cubic feet would be needed for a six-foot depth and 25,147 cubic feet for a seven-foot canal. The report of Mr. Hutchinson gave complete specifications for the manner of constructing double enlarged locks, the basis for the specifications subsequently used in the construction. For the enlarged canal he advised forty-two feet bottom width, seventy feet top width and seven feet depth; locks one hundred and fifteen feet by seventeen feet; size of boats, one hundred and three feet long, sixteen feet wide and five feet draught, with a tonnage of one hundred and sixty-nine tons, exclusive of boat; cost of transportation, he estimated, would be one-half that by the old canal or, more exactly, as 0.54 to 1. The aggregate of the estimates, including the cost of a double set of lift-locks on the whole line, was: for the larger canal, $12,416,150.17; and for the smaller canal, $10,368,331.48. 22

In his message to the Legislature of 1836, Governor Marcy reiterated his warning against endeavoring to carry on public works without an adequate financial plan, but this, like his former plea, passed unheeded. He said: "I have not been without apprehensions, and I still entertain them, that internal improvements cannot be long prosecuted on an extensive scale unless sustained by a wise system of finance. No new work can be executed without using the public credit, and however high that credit is at this time, it cannot be liberally used and long upheld without some financial arrangement that will inspire confidence at home and abroad. . . . The improvident practice of borrowing money without providing available funds for paying the interest, has already been carried to a point beyond which it cannot be pushed without producing serious mischief. . . . On a part of the debt already contracted for internal improvements, the interest can only be paid by new loans, unless you resort to taxes of some kind; . . . Very few, I should hope, would advocate the reckless policy of contracting a debt, even for such an object, and constantly and rapidly accumulating it by loans to pay the interest. . . . Can we claim the continuance of public confidence on the assumption that a future generation will take better care of public credit than we are willing to do? . . . The treasury is entirely exhausted, and you are therefore required to provide for the support of these canals, and to pay the interest on the debt contracted on their account for the present year, more than one hundred thousand dollars." 23

By the first of July, 1836, the surplus revenue derived from the Erie and Champlain canal fund had amounted to a sum amply sufficient to pay off the remainder of the debt ($3,582,502.73) contracted for the construction of these two canals. By this event the auction and salt duties were discharged from the constitutional pledge securing them to that fund and were restored to the treasury for general purposes. But there was yet a further canal debt of over three million dollars, contracted on account of the Oswego and lateral canals, on which, as payment from their several revenues was the sole source of funds for extinguishment, the prospect of discharging the debt was considered very faint and distant. The total tolls for the year ending September 30, 1836, on the Erie and Champlain canals, was $1,548,536.18 and the whole income of the fund belonging to these canals from all sources was $1,947,483.61; and after deducting all expenses, the net revenue was $1,341,934.36. 24

During the legislative session of 1837, there appeared the first intimation that the enlargement would cost more than the amount reported a year before. In reply to a Senate resolution of February 21, "whether from the surveys, examinations and estimates [then] possessed, they [believed] said enlargement [could] be completed at the cost heretofore estimated, and if not, at what additional cost, including damages to individuals," 25 the canal board said that they did not believe that the work could be completed for the sum previously estimated, because plans for some of the structures had been changed, parts of the alignment had been altered and probably other deviations would be made, and the cost of construction was greater than when the estimates were made. They had no further surveys on which to base their opinion, but they did not believe the additional cost would be large, exclusive of damages, the amount depending upon the prices of labor and materials. No estimates of damages had been made, as the statute provided that these should be adjusted by three appraisers appointed by the Governor and the Senate." 26

During 1837 several important changes were decided on by the canal board. A new location at Rome had been authorized by a special act 27 of the Legislature. It will be recalled that the original Erie canal had been built about half a mile south of the Western Inland Lock Navigation Company’s works, which had extended through the southern part of this village, and that, at the time of the celebration attending the opening of the canal in 1825, the villagers had shown their disapproval of the change by marching through the streets to the solemn beat of muffled drums. The surveys of routes by the old canal and by a new line were reported to the commissioners on May 25, 1837. The estimates showed a difference of $22,590.85 in favor of the existing location, but by the adoption of the new line the construction of a section of the Black River canal would be obviated, which was estimated to lessen this amount by $9,000. The saving of about half a mile of distance on the Black River canal and of eleven hundred feet on the Erie, and the advantages of better accommodations for the citizens of Rome were counted as benefits to outweigh the additional cost. Therefore, it was determined to construct an independent canal, which brought the course back to near the location of the old Navigation Company’s channel.

Reviewing the situation of 1837, Governor Marcy, in his message, admitted a falling off of $275,000 in tolls from those of the previous year, the gross amount being but $1,326,781 for the fiscal year. Used as channels of trade, the canals necessarily participated in its fluctuations. In consequence of the scanty crops of 1836, the eastward tonnage was diminished, as was also the amount of merchandise sent westward. The income of the Erie and Champlain canal fund, from all sources, was $1,426,071.78. Of this amount $632,881.20 was expended on the enlargement of the Erie. The estimates for unfinished works of internal improvement, including enlargement of the Erie canal, were $15,000,000. The completion of the aqueduct at Rochester was urged as a necessary measure to keep up the business of the canal in case of the failure of the old aqueduct. In the Governor’s opinion a still larger appropriation might be advantageously used for improvements. The channel of the Erie canal, he said, was at least as eligible for western trade as any that could be opened and both duty and interest required that it should be made adequate to the public wants without delay. The Governor recalled his previously unheeded messages as to the necessity of a financial system to meet the interest charges and ultimately to extinguish the principal of the public debt. 28

"The work for the enlargement of the canal not under contract, that in the opinion of the Commissioners ought to be immediately commenced is: the doubling of the locks from Albany to Syracuse; taking in additional feeders and enlarging the canal near the locks; rebuilding the lower aqueduct across the Mohawk river, building aqueducts over the Schoharie and several other creeks between Schenectady and the Little-Falls; enlarging the canal through the east part of the city of Utica and building an enlarged weigh-lock at that place; re-building the aqueduct over the Oneida creek and enlarging the canal at the ends of it; cutting down the Jordan level and taking in a feeder from the Nine-mile creek; building an enlarged weigh-lock at Rochester; and enlarging the canal through the mountain ridge, re-building the locks at Lockport, and the guard-lock at Pendleton." 29

To carry out this recommendation the Legislature enacted a law 30 authorizing the commissioners of the canal fund to borrow four million dollars on the credit of the State, and directing the canal commissioners to put under contract, with as little delay as possible, such portions of the work as their report had described in the paragraph just quoted, and also "such other portions as in the opinion of the canal board [would] best secure the completion of the entire enlargement, with double locks on the whole line." The canal board decided that the additional parts should be the Irondequoit embankment and the heavy embankments in the Mohawk valley. During 1838, the work authorized by the law was put under contract, except at the Irondequoit embankment, which was delayed to make surveys for a new route. It was alleged by certain petitioners of Monroe county that a saving of several miles could be made. Although the survey verified this statement, it showed the cost by the new line to be more than twice that by the old, thus causing the canal board to decide on the enlargement of the existing canal.

The Governor advocated limiting the term of office of the canal commissioners to bring them within closer reach of the appointing power, in the interests of economy. One-fourteenth of the sum received for tolls was expended in salaries and, including repairs, almost one-half of the entire tolls was absorbed. Such a system, he thought, was without doubt capable of advantageous revision. With extended improvements the official power and patronage of the commissioners and the canal board had been enlarged to an immense and unlooked-for extent; but little publicity or accountability was required; a great, mysterious and undefined power had thus grown up unobserved, while the public had been narrowly watching less important functionaries. It was suggested that a board of internal improvements, composed of a number from each senatorial district, would be more economical and efficient. "It is the worst economy," said the Governor, "to devolve upon officers constituted for one department, duties appurtenant to others. Its universal results are diminished responsibility and diminished efficiency in both the principal and incidental departments." 31 This was in the line with Governor De Witt Clinton’s suggestion of a "board of public improvements," made in 1822 and renewed in 1825.

" . . . their productiveness would warrant the State in expending in internal improvements $4,000,000 annually during a period of ten years; . . . the revenues of the canals alone would reimburse this expenditure previous to the year 1865 . . . It [the State] has increased four-fold the wealth of its citizens, and relieved them from direct taxation; and in addition to all this has carried forward a stupendous enterprise of improvement, all the while diminishing its debt, magnifying its credit, and augmenting its resources." 32

However, the Governor saw the danger that might ensue. Continuing, he said : "This cheering view of our condition ought to encourage neither prodigality of expenditure nor legislation of doubtful expediency. . . . Rigid economy ought to be enforced, and perfect accountability exacted." 33

In answer to an Assembly resolution of February 20, 1839, the engineers submitted to the commissioners a report 34 of the cost of work completed, of that under contract and also of that yet to be put under contract, including amounts for engineering, superintendence and contingencies. This estimate amounted to $23,402,863.02. The following statement of the main items that were omitted in the estimate of 1835 shows to some extent in what the difference between the two estimates consisted: – damages, about seven per cent; enlarging the West Troy side-cut and doubling its locks; five additional aqueducts in the Mohawk valley, including necessary changes of the canal at those places; additional width of excavation through the mountain ridge at Lockport and at various points on the line; additional width to the berme and towing-path embankments; two weigh-locks; five weigh-lock houses and scales; increased dimensions, and improved quality masonry in locks, aqueducts, culverts and bridges, increased amount of slope wall – the estimated cost of these items was $6,143,969. This amount together with $12,416,150 – the estimate of 1835, – increased by thirty-three per cent, or $4,097,329.50, for the rise in the cost of labor, provisions, team work, etc., makes a sum total nearly equal to the estimate just stated.

The gross receipts of the canals for 1839 (fiscal year), including water rents and land sales, were $1,656,902.11. The ordinary charges were $459,987.59, to which was added $139,111.78 for the Glens Falls feeder, the Black River canal and feeder and the Tonawanda and Ellicott creek improvements and payment of previous liabilities under special acts, leaving the net tolls $1,057,802.74. 35

Referring to the project of enlarging the canal, he said: "The act of 1835 directed the enlargement to be undertaken when the canal board should be of opinion that public interest required the improvement, and its extent was submitted to their discretion. It will not, I hope, be deemed disrespectful to remark that the first step in the great undertaking, the delegation of the legislative power to a board not directly responsible to the people, was a departure from the spirit of the constitution, so unfortunate in its consequences, that it should remain a warning to all future legislatures. The expense of the enlargement is now estimated at $23,402,863; yet the law by which it was authorized passed without any estimate having been submitted to the Legislature, and with scarcely any discussion. If completed on the present scale, the canal will surpass in magnitude every other national work of internal improvement; yet all the responsibilities in reference to the dimensions and cost of the enlargement seem to have been cast off as unworthy the consideration of the Legislature." In reference to the revised estimate for the completion of the Erie enlargement and the Black River and Genesee Valley canals, he continued: "The confidence of the people in the policy of internal improvement, has sustained a severe shock from the discovery that the state was committed by the Legislature to an expenditure of thirty millions of dollars, for the completion of three works alone, upon estimates of the same works rising only to about fifteen millions." 36

The Governor devoted the greater part of his message to an advocacy of the canals, but admitted that "apprehensions prevail that the public credit may become too deeply involved in the prosecution of works of internal improvement." "The policy indicated by public sentiment," he said, "and demanded by the circumstances of the times and the condition of the state, is to retrench the expenditures upon our works of internal improvement and prosecute the system with moderation and economy." In regard to securing funds for public works, he said: "The existing and anticipated revenues of the canals must be, as heretofore, the basis of any new loans which the Legislature shall see fit to authorize, since taxation for purposes of internal improvement deservedly finds no advocate among the people." And he added, – in a vein which showed with what confidence the canals were looked to for supplying funds: "Unlike other communities, this state borrows no money for purposes of war or defence, to pay salaries or pensions or the interest or principal of former loans, or even to endow institutions of learning, benevolence or religion. Her income is sufficient for her wants, without taxation; the value of her productive property is double the debt she owes; her surplus income is double the interest she is required to pay; and the revenues derived from her canals, if judiciously managed, will be adequate to every enterprise which the interests of the people shall demand." 37

Mr. George W. Lay, member from Genesee county, of the committee on canals and internal improvements, to which was referred so much of the message as related to canals and internal improvements, agreeing with the Governor, thus reported: "The present condition of the finances of the country, and the general embarrassment pervading every portion of the United States, in consequence of the deranged and unsettled state of the monetary affairs, has had a tendency alike to alarm the timid, and shake the confidence of the more cautious, in regard to the policy to be pursued in future, as to our system of internal improvements." 38

Continuing, the report says: "The enlargement of the Erie canal to the dimensions fixed and established by the Canal Board has been for the last three years considered as a question definitely settled. It was a subject deliberately examined, thoroughly investigated and discussed, and as solemnly adopted. No trivial, transient, temporary cause now existing, ought, for one moment, to disturb or unsettle a decision so important to the interest of the people, and the prosperity and credit of our State. It is not now to be decided whether the people would have consented to adopt the several projects which have involved the State in the expenditure of the large sums of money which will be required for their completion. Had they foreseen that the estimates upon which these works were based would prove so entirely inadequate; or could they have anticipated so sudden and unexpected a revulsion in everything connected with the business and prosperity of our country, your committee are satisfied that more cautious counsels would have prevailed, and we should not now be called upon to deliberate and decide what measures should be adopted to guard the honor and credit of our State, and protect the right and property of our citizens. . . . The representatives of the people approved of the undertaking, and year after year they have given the most unequivocal demonstrations that their confidence in the utility and value of public improvements, judiciously made and carried on, remains unshaken." 39

In spite of repeated assertions from canal officials that nothing short of an enlargement of the whole canal would afford more than temporary relief, the Assembly again raised the question of abridging the enterprise. In reply to a resolution of March 2, 1840, asking the canal board "whether, in their opinion, any change [could] now be made advantageously to the public interests in the plan, dimensions or manner of execution of the work adopted for the enlargement of the Erie Canal, so as to lessen the expense of that work; and also, how long a period of time [would] be required to complete most advantageously to the public interests, the enlargement of said canal;" 40 the officials answered 41 that, in their opinion, no changes ought to be made in the plan, dimensions and manner of executing the work. The object of the enlargement was to remedy those defects which had been so frequently explained. To change the plan and dimensions, they argued, would be to defeat the very object of the enterprise, namely, to cheapen transportation and to accommodate the increasing traffic. Moreover, to vary the details of existing contracts, especially after much progress had been made in their performance, would be vexatious, embarrassing and difficult. With regard to the structures thereafter to be put under contract, the board was of the opinion that a cheaper style of masonry could be adopted for bridges, culverts and aqueducts, but such a change would impair their strength and durability. As to the time required to finish the enlargement of the canal, that would depend upon the resources of the State, and the Legislature would be able to determine in each year the amount of work that could be judiciously undertaken.

During 1840 a loan of $2,000,000 for the Erie, $500,000 for the Genesee Valley and $250,000 for the Black River canal was authorized, 42 and in 1841 another 43 of $2,150,000 for the Erie, $550,000 for the Genesee Valley and $300,000 for the Black River. As indicating the anticipated stoppage of all work in the near future, it is significant to notice that, with the exception of a lock at Black Rock dam and some work at Rochester, these acts restricted all operations to such as were necessary to render available the work then in progress and to prevent the interruption of navigation. During 1840 very satisfactory advancement was made, the season being unusually favorable, and the effect of the suspension of public works in neighboring states becoming manifest in the reduced price of almost every kind of labor and material. In 1841, however, the need of funds was more severely felt, not enough being available to complete the work within the time specified in the contracts.

Still digressing, we notice another interesting fact. "The first bridge in America consisting of iron throughout," said one recently, "was built in 1840 by Earl Trumbull over the Erie Canal, in the Village of Frankfort, N.Y. In the same year Squire Whipple, Hon. M. Am. Soc. C. E., also built his first truss bridge." 44

The gross receipts of the canals for tolls and rents for the fiscal year 1840 were $1,606,827.45 and the gross charges, exclusive of interest on loans, $586,011.87, leaving a net revenue of $1,020,815.58, a slight falling off from the previous year. But the tolls and rents received during the entire season of navigation were $1,775,747.57, showing a gratifying increase of $159,365.55. The canals were navigable from the twentieth of April to the fourth of December. The depth of water and consequently the tonnage of boats was increased, thus reducing expense of transportation. The Erie enlargements were prosecuted with vigor so far as permitted by appropriations. The amount expended for this enlargement prior to January 1, 1840, was $4,669,661. The appropriations and canal revenues of that year were $2,869,171, making an aggregate for this work of $7,538,832. In reviewing the year’s work, the Governor said that the experience of the present commissioners justified the belief that the cost of the enlargement would not exceed the corrected estimates of 1839, or $23,112,766. There would, therefore, be required to finish the enlargement, $15,573,934. That portion lying between Albany and Rome, said the Governor, might be completed in the spring of 1843; the part extending from Rome to Rochester by the spring of 1845; and the residue, from Rochester to Buffalo, by the spring of 1847. 45

Again in 1841, Governor Seward advocated the policy of retrenched expenditures and perseverance in the construction of public works, with moderation and economy; also the referring of all unfinished works to competent engineers to determine what portion could be safely delayed; the establishment of what he termed a canal board to prevent erroneous estimates and inconsiderate legislation; and the limiting of all issues of stock so that the interest charges should not exceed the net canal revenues. This policy was not, the Governor said, to be regarded as one of abandonment but of retardation for the sake of economy. 46 The Governor had made these same recommendations in his message of a year earlier.

In 1841 there was introduced in the Assembly a measure which was destined to play a large part in the future financing of the canals. Says a recent writer, in speaking of this proposition: "The theory that all legislative power is vested in the legislature had for many years been applied in actual legislative practice in a manner not always conducive to public interest, and which did not exhibit a clear appreciation of legislative responsibility. Some persons began to think that the legislature had too much authority, and that it should not have unlimited power to create debts, appropriate money, and impose taxes. This opinion was expressed in concrete form by a proposed constitutional amendment offered in 1841 by Arphaxed Loomis, a member of assembly from Herkimer county, and who was afterward an influential member of the Convention of 1846, which provided that every law creating a debt against the state must specify the object of the indebtedness, must be limited to one object only, which must be specifically stated, and could not take effect until approved by the people at the next general election. The prohibition did not apply to debts created for the purpose of repelling invasion, suppressing insurrection, or defending the state in war. It will be observed that the proposition did not permit the legislature to create indebtedness within the moderate fixed limit to meet emergencies, as provided by the section adopted in 1846, and which has since continued in force. The proposition is significant as an attempt to vest in the people control over all legislation creating state debts. It is known in history as ‘the people’s resolution.’ It is evident that public opinion was not yet ready for such a radical change of policy, for the proposition failed in the assembly by a tie vote of 53 to 53. In 1842 many citizens petitioned the legislature to incorporate the principles of this resolution in appropriate amendments to the Constitution. The resolution was again introduced, but was not passed, and not till 1844 did the legislature go so far as to propose amendments embracing these restrictions on legislative power." 47

In view of the cessation of canal improvements in 1842, it is interesting to note a statement of the commissioners in regard to the business transacted in 1841. The gross amount of tolls, they say, was $2,034,882, an increase of $259,135 over those of 1840, or about fourteen per cent. At one of the locks there were 30,320 lockages (an average of one every ten and a half minutes), or more than twelve per cent over the preceding year. They stated that "the lockages required to pass the boats had become so numerous and frequent that the channel of the canal had not sufficient capacity to pass the necessary amount of water without great delay and embarrassment; that the difficulty did not consist (as had been generally supposed), in any want of capacity in the locks to pass the boats, if sufficient water could be passed through the channel, but in the want of capacity of the channel itself." 48

When the Legislature of 1842 convened, the financial affairs of the State were at a crisis. Governor Seward seems to have considered the situation less serious than it really was. Probably Governor Bouck, after a lapse of a year, was in a position to view the conditions more clearly, as we shall see presently. Doubtless Governor Seward’s zeal for the welfare of the canal and his faith in its self-sustaining ability overshadowed his perception of the difficulties that threatened a continuation of work under existing conditions. In his annual message, he said, in substance: If we would preserve the inestimable benefits of inland navigation, save the treasury from embarrassment, maintain the public faith, prevent general distress, retain our commercial precedence and political influence, and guard against the dismemberment of our territory, it is necessary to complete the enlargement of the Erie canal throughout, and with all convenient diligence. Speaking of the canal debt, he said: "Large as this sum is, there is no reason to suppose that it passes our fiscal ability. . . . The debt is large because the enterprise is great. It remains for you to decide whether the indebtedness shall be made larger, or whether you will devise a different system of finance; but if the present system and progress are continued, the entire enterprise will be accomplished in 1846. . . . The canal revenues [may] . . . extinguish the debt incurred in their construction within fifteen years thereafter; after which these great public works will continue to pour into the treasury a river of tribute." In conclusion, he said: "I recommend that all the future revenues from the National Domain shall be pledged as a sinking fund to the extinguishment of the principal of the public debts, . . . If seventeen millions of dollars are yet required to complete our public works, the system I have suggested would in 1855 discharge the whole of our present and future indebtedness. 49

In describing this period Governor Bouck said: "The Legislature of 1842 convened at a period of great embarrassment in the financial affairs of the State. The treasury was empty; our credit seriously impaired; the State stocks were selling at ruinous sacrifices; temporary loans were nearly at maturity; the time for the quarterly payments of interest on the public debt, amounting to more than $20,000,000, was fast approaching; contractors were pressing for payment, and the progress of the public work virtually suspended. Under such circumstances to have continued large expenditures, or indeed any not demanded by imperious necessity, or good economy in reference to the condition of the public works, and that good faith due to our citizens with whom the State had existing engagements, would in my opinion have been a wanton disregard of public duty." 50

On March 7, 1842, Mr. Michael Hoffman, of Herkimer, from the committee of ways and means, to which was referred so much of Governor Seward’s message as related to State finances, reported 51 to the Assembly. After carefully considering the whole financial situation, the State debt – given by the report as $26,226,092.80, of which the canal debt was $19,086,466.22 – the demands upon the State for the next four years and the means or lack of means for meeting those demands, the committee presented its opinion of "the necessary course and safe policy of the State," recommending that expenditures should cease, that a tax of one mill on the dollar should be levied, that the funds subject to State control should be invested in loans to meet the pressing demands of the canals and that a sinking fund should be established. In speaking of the canals, the report said that public works were already suspended; that their progress was no longer in doubt, for time, circumstances and the reckless course of the past had decided it, and had arrested that progress; that the question then was, whether by a desperate and impracticable effort to revive that progress, the credit of the State should be destroyed utterly; and that new loans for further expenditures could not be made "except on terms at once disgraceful and ruinous to the credit of the State." In its conclusions the committee was supported by the clear and frank opinions of some of the ablest financiers in the state, – such men as Albert Gallatin, George Newbold, John G. Palmer and C. W. Lawrence, who had given their opinions, at the request of the committee.

In view of this action by the Legislature, it is of interest to observe a memorial 52 that was presented to the Assembly on March 26, 1842, by several citizens of Niagara county, praying for the incorporation of a company which should be authorized to complete the Erie canal enlargement and the Genesee Valley and Black River canals, on certain conditions. Declaring their reason to be a desire to finish so important a work without interruption, to avert a tax and to place the credit of the State upon a firm foundation, they asked the privilege of forming a company, with a capital of $25,000,000, for the purpose of completing these canals by January 1, 1845, seeking in return a portion of the tolls for a limited term of years.

He also observed that very little if any of the work had been undertaken for the enlargement of the Erie canal during 1842 that was not rendered necessary by the worn and decayed condition of the mechanical structures. As to the benefits of the improvement, he said: "Already has the transportation on the canal been much benefited by the use of the new work between Albany and Schenectady, at Phillip’s locks, and at the Little falls. At these points the navigation has been entirely relieved from the detention and delay which had been sensibly felt for several years." 53

The report 54 of the canal commissioners for 1842 gave full and detailed account of the condition of the whole line as it was left at the cessation of active operations.

In his message of 1844, Governor Bouck again referred to the conditions which made the act of 1842 necessary. He summed up the situation by saying: "Our necessities required loans, and they could not be made without doing something to revive and invigorate our credit. This was effectually done, not only by arresting the progress of our public works, but by resorting to taxation, and by pledging the avails of the State tax, and the surplus income of the canals, to the public creditors. Such were the objects of the law of 1842, and the wise policy of the measure has been vindicated by its happy results." 55

Horatio Seymour, then of the Assembly committee on canals, to which was referred so much of the Governor’s message as related to that subject, presented an exhaustive report, 56 strongly condemning the policy of 1838-1842, and making the pledges and guarantees of the act of 1842 the basis of the policy recommended for the future. He showed that, if the sound financial policy that Comptroller Flagg endeavored to establish in 1836 – the policy of imposing a tax to replenish the general fund, so that the revenues of the canal might be used for their improvement – had been followed, the canal debt would not have reached the enormous sum of $23,851,575.66 at the beginning of the year 1844. Although the necessity of the enlargement had been admitted, and the propriety of imposing a tax to enable the canals to enjoy the full benefit of their surplus revenues had been urged, the creation of any debt had been decidedly opposed by the Comptroller and its evils pointed out. The policy of 1838 – of borrowing large amounts – was ruinous to the State and after a period of four years had checked the progress of the enlargement. The very magnitude of the appropriations and the vast amount of work put under contract simultaneously – all contributed to increase the expense of every undertaking by the State. To show more fully the evils of this change of policy, the report considered what would have been the condition of the canals, had not this change been made. The amount of tolls for the years 1837 to and including 1843 was $11,843,524.49; the expenses, interest on debt, etc., for the same years amounted to $5,013,288.05; a surplus remained of $6,830,236.44, which would have admitted an annual revenue of more than $1,200,000, to be applied toward the enlargement of the Erie canal, a sum which the committee considered quite as large as could be advantageously and economically applied in any one year.

In closing, the report said: "The issue, which has been made between improvements on the one hand and finances on the other, is a false and unnatural one. . . . We may and should have in this State a liberal system of internal improvements, furnishing the elements of and predicated upon a sound financial policy." 57

Speaking of events in 1844, Judge Lincoln says: "The legislature at this session proposed a constitutional amendment confirming the pledges and guaranties of the act ‘to provide for paying the debts and preserving the credit of the state,’ passed in 1842; also an amendment limiting the aggregate debts in any one year to $1,000,000, without a vote of the people, providing for the creation of a sinking fund, and the payment of the debt and interest in eighteen years. These propositions, except the first, became a part of the Constitution, and were embodied in §§ 10 and 12 of article 7 of the Constitution of 1846." 58

The disconnected lines of railroad running parallel with the canal were already reaching out for further privileges. The argument used for their construction had been the greater rapidity offered for passenger traffic, to which the canal was not adapted and which branch of traffic, incidentally, had never been a paying factor of canal revenue. Through the Legislature they now asked for and obtained the right to carry freights during the season of the suspension of canal navigation, on payment to the State of canal tolls. 59 This drew a strong remonstrance from those interested in canal traffic and an effort was made in 1845 to obtain its repeal. The committee’s report 60 is of interest as showing the cost of the canals to the people of the State and as foreshadowing the danger of allowing this entering wedge of competition to continue. The law, however, was not repealed and the fears expressed by the petitioners and the committee were soon to be realized.

As to the influences which bore upon the question of coming competition between the railroads and the canals, Judge Lincoln, adverting to the granting of the charter to the Mohawk and Hudson Railroad Company in 1826, by the same Legislature which received the felicitations of Governor Clinton on the "auspicious consummation" of the great canal enterprise, says: "The state invited into the field of transportation a rival which was destined to become its master; and then was initiated a competition to which the state was finally compelled to yield." And again he says that "during the ten years beginning with 1826 the legislature granted 106 railroad charters, besides enacting several other laws relating to railroads. It was thus evident that the new motive power had entered on a sharp competition with the state. It did not take long to convince the statesmen of that period that stringent measures would be necessary to limit the extent of the new competition, and efforts were made from time to time, by means of the taxing power, to compel the railroad companies to contribute a portion of their earnings for the purpose of reimbursing the state for losses which the canal traffic must inevitably suffer by the new method of transportation. This new movement found its first expression in the charter granted in 1833 to the Buffalo & Black Rock Railroad Company, which required the company to pay the commissioners of the canal fund the same tolls on goods carried by it, except personal baggage, as might be charged for the same goods transported by the Erie canal, and the tolls were not limited to the season of canal navigation. Two other charters granted in 1834 contained a similar provision. Two charters granted in 1836, one in 1837, one in 1838, and one in 1839, required the payment of tolls only during the season of canal navigation. In 1840 Governor Seward, in his annual message, questioned the wisdom of imposing these tolls on railroads, and suggested that if they were to be continued they should be collected only during the season of canal navigation. 61

In 1844, as we have just noted, the charter of the Utica and Schenectady Company was amended so that they might carry goods "during the suspension of canal navigation in each year only" on payment of tolls. "Tolls were, by the same statute, required from several other railroad companies not previously subject to this tax, covering nearly the whole line from Albany to Buffalo." 62

In the opinion of the Governor, the Legislature overstepped its authority in attempting to enact a law which would provide funds for recommencing a part of the work stopped by the act of 1842. In returning the measure with his veto, the Governor explained that, although he could approve the greater part of the law, there were some provisions that, while appearing to come within the restrictions imposed by the act of suspension, really violated the spirit of that policy. 63 Thus the Governor constrained the Legislature to abide by its former pledge to protect the creditors of the State, the measure not being passed over his veto.

Judge Lincoln’s close study of the canal questions before the Convention, of the attitude of the participants therein and the final results renders his opinion of unusual and critical value. He says: "The debate [on canals] took a wide range, covering the whole field of canal history, and involving a discussion of policies, principles, political parties, and individuals." 64 A few delegates, unalterably opposed to the canals, advocated their sale, but many, who had been so opposed, changed their opinions upon proof of their great utility to the State. The friends of the uncompleted Genesee Valley and Black River canals, which had already cost the State the sums of $3,794,000 and $1,544,000, respectively, and which could be completed for a comparatively small amount, were able to secure their inclusion among the "constitutional" canals, which could not thereafter be alienated from the State. This was doubtless a long step toward their early completion.

The canal article is thus summed up by Judge Lincoln. He says: "The article, as a whole, preserved the credit of the state, pledged its revenues for the redemption of all state obligations, provided for the enlargement of the Erie canal and the completion of the Genesee Valley and Black River canals, authorized direct taxation to meet deficiencies, and prohibited the sale or other disposition of the canals." 65 It clearly defined the limits of future expenditures and also provided for a generous allowance from the canal revenues toward the payment of the general expenses of the State government, without imposing a direct tax upon the property of the people of the State. This confirmed the policy of supporting and maintaining the State government chiefly from the tolls of the Erie canal, as had been done in previous years." 66 The system of State maintenance by indirect taxation had not then attained the prominence it now has.

Governor John Young, at the opening of the Legislature in 1847, said that the propriety of completing the enlargement of the Erie canal was a matter about which at that time there could scarcely be said to be any diversity of opinion; also that good faith forbade the abandonment of the Genesee Valley and Black River projects. "When we recur to the fact," he observed, "that the revenues of our canals, including the interest on cash revenues, amounted, for the year ending 30^th September, 1846, to nearly two millions eight hundred and fifty thousand dollars, with what entire confidence may we not rely upon the income of the canals to protect us against taxation on account of the present State debt, and for its ultimate extinction? – I speak now of the revenues to be derived from the canals in their present condition, assuming that the capacity of the Erie canal will not permit of a material augmentation of its business. Secure the trade of the great opening west, by enlarging the Erie canal, and how unimportant is our present indebtedness considered in connection with the revenues that may reasonably be expected." 67 Undoubtedly the fact that the annual tolls from the canals had by this time increased to nearly three million dollars was a powerful argument to support the optimistic views of the Governor and the friends of the uncompleted Genesee Valley and Black River canals, as well as those of the Erie enlargement.

The canal commissioners were evidently preparing to resume operations upon the suspended work of the improvements, in view of the popular trend of sentiment in that direction. They presented revised estimates for the Erie enlargement, – both on the plan of one enlarged lock by the side of the old one, and for two enlarged locks, – between Albany and Syracuse; the former to cost $334,000 and the latter $639,000. The completion of double enlarged locks at Lockport was to cost $170,000; the enlargement between Syracuse and Rochester was covered by the estimates of the previous year." 68

From the latter report it appears also that the traffic of the Erie canal was increasing year by year beyond the most sanguine expectations of its friends. Inventories of the boats and craft upon the canal were taken at least three times between 1844 and 1848, by which it was shown that the number of boats had increased from 2,126 in 1843-4 to 4,191 in 1847-8, or ninety-seven per cent. There were in use at this date the following: 62 "packets" of 31 tons average; 621 "line boats" of 68 tons; 736 "lake boats" of 67 tons ; 319 "bull-head boats" of 72 tons ; 1,095 open "scows" of 65 tons; 1,358 decked "scows" of 69 tons; all valued at about three million dollars. The total tonnage capacity had increased from 117,453 in 1843 to 279,260, or one hundred and forty-one percent, of which ninety-eight per cent was in 1847, practically after the resumption of the work of enlargement." 69