Lockport Union-Sun & Journal Online

May 18, 2013

CANAL DISCOVERIES: Who will pay?

--
Lockport Union-Sun & Journal

Lockport Union-Sun & Journal — They knew the Erie Canal was going to cost a lot of money, but in the early 1800s, no one really knew how much, and opinions varied wildly about who should pay the bill. The newly organized Canal Commission was asked for their estimate of cost, and their chairman, DeWitt Clinton, not being one to shy away from a squabble, said five million dollars, and maybe more.

To many New Yorkers, the idea was preposterous. An “Internal Improvement” of this magnitude had never been attempted —certainly, nothing with a cost in the millions of dollars. Previous public works projects had been small, usually attempted to correct a transportation issue or create a dam to control water flow. So, talk of Clinton’s Ditch with a cost over $5 million created an instant controversy.

In the early 1800s, most of the hardworking settlers in upstate New York were going through a period when they hardly recognized money. Banks were almost non-existent and greenbacks and gold-based currency were a rarity. Most people conducted business through barter. Settlers would pay for the materials they needed using their crops in return. 

Without cash in hand, disgruntled settlers questioned whether the New York government would accept crops and handcrafts to cover the tax needed to build the Erie Canal. The proposed $5 million needed might as well have been five billion, because in the mind of the average New Yorker, either one would be equally impossible. A few decades earlier, New Yorkers had joined the other colonies to fight a war over excess taxation, and public sentiment was certainly against allowing the state to institute a new tax to build the Erie Canal.

Canal supporters aided their cause by pushing patriotism. In order to hold our fledgling nation together, our citizens needed to have a bond of common interest. George Washington noted it, and DeWitt Clinton made it his mantra: “As a bond of union between the Atlantic and the Western States, this canal may prevent the dismemberment of the American Empire.” 

The Canal Commission was indeed patriotic, but they were also practical. The question was asked at every meeting – who will pay for the canal? The federal government was the most logical choice. The entire country would benefit from a project of this magnitude. Others felt that the neighboring states should certainly contribute; as they too would reap the benefits the canal would offer.

But, the other states were emphatic in their refusal to assist. They offered polite encouragement and said it was a fine New York project that should be paid for by New Yorkers. Likewise, President Thomas Jefferson said that there was no basis in law for the federal government assisting an individual state with a canal project. He thought the canal was one hundred years ahead of its time, and even if the federal government had been able to fund the project, it surely would put the nation in bankruptcy. He dismissed the canal with a stinging rebuttal: “It is little short of madness to think of it at this time!”

The War of 1812 put all thoughts of the Erie Canal on hold. Fighting a war, again so soon, with England, had tremendous financial consequences. There was no money to spend on internal improvements. There were no men to dig the canal, either.

However, by 1817 talks resumed, pro and con, for the construction of the Erie Canal. The War of 1812 demonstrated to citizens that they needed a transportation network that was free from any British influence, because many people felt our country would surely go to war again.

By 1816, the financial details were still far from decided and DeWitt Clinton tried to brace weary New Yorkers for the worst. He told them if a canal were to be dug in New York, then New York citizens would have to dig into their own pocketbooks first. Taxes would be needed - not just $5 million, but now $6 million was the estimate.

New York bankers were now confident in the pledged word of the Citizens of the State of New York. New York State, through its Canal Commission was able to sell stocks, bonds, and to obtain loans to pay for the canal. History notes that these were indeed wise investments. With initial Erie Canal funding in place, after decades of debate, ground was officially broken at Rome, N.Y. on July 4, 1817.

Doug Farley is the director of the Erie Canal Discovery Center. His column runs every Saturday. The Erie Canal Discovery Center has welcomed 132,974 guests since its inception and is a great place to start your Erie Canal adventure. Hours of operation are 9 a.m. to 5 p.m. daily. Join today, May 18 at 1 pm when Cynthia Cotton will offer a free, family-friendly program and book reading from her new Erie Canal children’s story entitled, “The Book Boat’s In.”

Doug Farley is the director of the Erie Canal Discovery Center. His column runs every Saturday. The Erie Canal Discovery Center has welcomed 132,974 guests since its inception and is a great place to start your Erie Canal adventure. Hours of operation are 9 a.m. to 5 p.m. daily. Join today, May 18 at 1 pm when Cynthia Cotton will offer a free, family-friendly program and book reading from her new Erie Canal children's story entitled, "The Book Boat's In."