of the general government to interest itself in our canals, and ultimately to acquire control of them. Our state has a just pride in its public works, and is quite competent to take care of them. To foster and protect them, to adapt them fully to the public interest, and to the growing demands of the internal commerce of the country should be the duty of the legislative and executive departments. In 1870, again referring to the canals, he said it was "the duty, as it is the manifest interest, of the state, to foster and protect them; more so now even than before the construction of the lines of railway which connect the western and northwestern states with the seaboard;" and that "properly managed they will not only serve the original purpose of their construction, but will act as a check upon exorbitant charges of railroad corporations, and thus keep down the price of transportation for the various articles moving eastward and westward, to the mutual benefit of producer and consumer." In 1871, observing that "our internal commerce is far beyond that of our foreign trade," he said that "our canals are a necessary means of facilitating this great domestic traffic, and their maintenance in good navigable condition is essential to the general welfare of the people of this state," and that the "suggestion to surrender them to the control in any degree of the Federal government, deserves no consideration."

Governor Tilden, in 1875, expressed substantially the same views, but less positively, remarking in his annual message that "the Erie canal remains an important and valuable instrument of transport, not only by its direct services, but also by its regulating powers in competition with other methods of transportation. The state, so far as we can now foresee, ought to preserve it, and not contemplate its abandonment."

It is evident, however, that these executive suggestions

did not meet with universal favor, for we find that in 1881, 1884, and 1885 amendments were introduced proposing to lease or sell the canals to the United States. Those amendments, which were considered in connection with other canal subjects, will be found at length in a previous part of this chapter; and we shall have occasion to observe in a subsequent chapter that the project of Federal ownership of the canals still has its advocates in this state.

Profit or loss.-Canal Auditor George W. Schuyler, in his report of 1879, said that "those canals which the Constitution declares shall not be sold or otherwise disposed of have earned in excess of all cost for construction, land damages, and operation, over $30,000,000." This included only the Erie, Champlain, Oswego, and Cayuga and Seneca canals, and excludes the lateral canals which, by the amendment of 1874, were released from the prohibition against their sale. I have already shown that these lateral canals cost some $35,000,000, and had become a heavy and continuing drain on the treasury. I have noted the amendment of 1882 which again included the Black River canal among the canals which could not be disposed of. I think that a statement concerning the profit or loss resulting from canal construction and management should include all the canals, for they were all constructed under one system and nearly at the same time. Money received from taxation, loans, or tolls was necessarily used for all of them without discrimination. Since the abolition of tolls, in 1882, the canals included in the prohibitory clause of the Constitution have been maintained and operated at state expense as free public highways. That date, 1882, when our canal policy was radically changed and when revenues from the use of the canals practically ceased, seems the most appropriate time for making a computation and comparison of the total

canal receipts and expenditures. At that time, according to the comptroller's report, the aggregate canal tolls received were $134,837,814.26. Other sources of revenue include interest on deposits, $6,068,951.13; various duties, $3,592,039.05; salt duty, $2,055,458.06; sales of land, $320,518.15; rent of surplus water, $138,823.73; steamboat tax, $73,509.99; and miscellaneous, $2,939,442.48; making a total of $150,026,556.85.

The expenditures for construction, repairs, maintenance, and operation, and all other purposes, amount to $130,896,524.28, leaving an apparent net surplus of $19,130,032.57. But it should be borne in mind that, in addition to the foregoing receipts, the people contributed $39,012,454.43 by taxation for canal purposes during the same period. The same report shows that during the period of canal tolls the state borrowed for canal purposes $71,920,503.28 to meet canal expenditures in anticipation of tolls, taxes, and other sources of revenue; that in this field of financial operation payments were made as follows: On principal, $55,752,191.81; premiums on purchase and investment of stock, $743,611.02; temporary loans, $3.406,467; interest on loans, $47,246,868.19; general fund, $5,015,774.60; general fund debt, $13,834,637.34; making a total of $125,999,549.96. Add to this the foregoing expenditures for construction, etc., $130,896,524.28, and we find that the total expense side of the canal account was $256,896,074.24, but which includes some items which were mere matters of bookkeeping, and balance one another in the comptroller's statements. This method of stating the account necessarily includes some duplication because the money borrowed was paid out for construction, repairs, etc., and had to be repaid from any revenues available. If we add to the amount received from tolls, etc. ($150,026,556.85), the sum borrowed ($71,920,503.28), we have a

total of $221,947,060.13, besides the sum received from taxation. Deducting this amount from the total expenditures, $256,896,074.24, it appears that the state paid out for canal purposes $34,949,014.11 more than had been received from canal sources, and, except for taxation, the state would have owed this amount; but this result was avoided by the payment of taxes amounting to $39,012,454.43, so that, as a result of all the canal financial operations ending in 1882 there was an apparent surplus of $4,063,440.32, and the state still owed $8,983,360 on the canal debt. Looking at the whole field it can hardly be said that the canals had yielded any surplus revenue at the time when canal tolls were abolished. The expectations of the founders and promoters of the canal enterprise were not realized in direct financial results, at least, so far as it was hoped that the canals would be a source of revenue sufficient to relieve the people from taxation. What the result might have been if railroad tolls had not been abolished we cannot even conjecture; but judging from the amount received from such tolls while they were required to be paid, and the great railroad traffic of recent years, it is reasonable to believe that a moderate toll on this traffic would have produced a very substantial contribution to our public revenues.

CORPORATIONS.

The amendments affecting article 8 related to some aspect of municipal affairs. Thus, in 1891 and 1893, it was proposed to amend § I by omitting municipal corporations from the exception permitting special laws, which would have required general laws for this class of corporations. This amendment was suggested by the senate committee on cities, in its report concerning city affairs, dated April 15, 1891. It was introduced in connection with one relating to the incorporation of cities,

and seems to have been a part of a plan for the organization and government of cities under general laws. The other amendment appears in the article on cities.

I have referred, in a previous chapter, to the attempt in the Commission of 1872 to include in § 11 of article 8 a provision limiting local indebtedness to 10 per cent of the assessed valuation, and the failure of the Commission to include that provision in the section as finally recommended. The consideration of this subject was resumed in 1876 by an amendment which was then passed by the legislature, proposing to fix the limitation at 5 per cent. It should be observed that the Tilden commission on cities, appointed in November, 1875, considered the subject of local indebtedness, and, in its report, submitted in February, 1877, objected to this amendment on the ground "that this expedient is not a remedial measure, and that its incorporation in the Constitution would be an error. The apparent prohibition, both as to taxation and the percentage of debt, could be readily evaded by raising the assessed values to which the ratio of taxation and of debt would apply. Such restrictions do not attempt to prevent wastefulness or embezzlement of the public funds in any other way than by limiting the amount of the funds subject to depredation. The effect of such measures would simply be to leave the public necessities without adequate provision."

ness.

Governor Robinson, in his annual message of 1879, considered at some length the subject of local indebtedIt will be remembered that the Governor had been an active member of the Commission of 1872, and was familiar with its deliberations and purposes. In the chapter on that Commission I have given facts collated by the Commission relative to local indebtedness, indicating very serious burdens then being borne by many municipalities. In this message Governor Robinson said.