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Samuel J. (Samuel Jones) Tilden.

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trary, it is his right and his duty to accept, and, if needful, to
seek all information necessary to enable him to decide whether
he ought to give or to withhold his " approval " of an act of re-
moval initiated by the mayor, under the law which defines their
respective powers and obligations in such cases.

I have the honor to be, with great respect,

Your obedient servant,

SAMUEL J. TILDEN.



XXXVII.

THE deplorable legislative and administrative corruption and
abuses which had tasked the energies of Mr. Tilden for the four
or five years preceding his election as governor, unhappily were

not restricted to the territorial limits of New York citv, though

/ 1 ~

their hideous proportions were there first discovered and ex-
posed. They were found to have infected pretty much every
department of the public service in the State. Outside of New
York city, their most malignant centre was the Canal Depart-
ment. The expenses of the canal system of the State for the five
preceding years had been not only out of all proportion to the
receipts, but equally out of proportion to the amount and qual-
ity of the work called " repairs," " ordinary" and " extraordi-
nary," for which they were ostensibly incurred. Even before
he took the oath of office, Mr. Tilden, at his own expense, insti-
tuted a secret but thorough investigation of the work to which
these enormous expenditures were attributed ; and at an early
stage of the session had in his possession conclusive evi-
dence that under every important contract let, at least during
the five preceding } r ears, the State had been grossly over-
charged, and that, by the systematic collusion of the State
authorities, over a million of dollars had been paid out to con-
tractors which not only had not been earned, but, so far as they
had been expended on the canals, had worked injury rather
than advantage to them. When the Governor had these facts
in such a shape that there was no room left to question their
accuracy, and no insurmountable obstacle to proving them,
he brought the subject to the attention of the Legislature with
such fulness and precision of specifications as not only to spread
consternation among the parties inculpated, but also to arrest
the attention of the whole nation. This document is still known
and referred to as " Governor Tilden's Canal Message."



THE CANAL MESSAGE.

EXECUTIVE CHAMBER, ALBANY, March 19, 1875.
To the Legislature.

I HAVE received a petition from forwarders, boatmen, and
others engaged in transportation on the canals of this State,
representing that the depressed state of their business calls for
legislation and necessitates a reduction of tolls, and request-
ing me to look into the condition of the canal commerce, and
to make such recommendations to the Legislature as will lead
to measures of relief.

Respectful consideration is due to so large and important a
class of our business men. They are proprietors of about six
thousand boats, which are said to give employment directly to
thirty thousand persons, and indirectly to twenty thousand
others. They are in the peculiar relation of partners of the
State in a vast internal commerce, owning and managing
the equipment, while the State owns and manages the body of
the canals. The State, therefore, has not only a common inter-
est in the preservation of the joint business, but also a distinct
and special interest in the ability of its partners to continue to
perform their functions, without which the joint business could
not be transacted. It cannot afford to suffer the equipment of
the canals to be broken up, to allow a dispersion of the traffic,
which, if once lost, will not be easily regained, or to omit any
measures of retrenchment in expenditure or economy of ad-
ministration which will enable it and its partners to meet suc-
cessfully the increasing competition of the railways with each
other and with water transportation.

A
,/



i875-] CANAL ABUSES AND MISMANAGEMENT. 97

Impressed witli the considerations which induce a liberal
policy on the part of the State toward its partners in the
internal commerce it has seen fit to undertake, I am, on the
one hand, predisposed to every practical and just measure for
enfranchising trade and industry and cheapening the inter-
change of commodities, and, on the other, to listen to the right-
ful complaints of our people against the extreme burden of
our present taxation and the prodigal and wasteful expenditure
in connection with the canals, which is one of the main causes
of such taxation.

I have, therefore, felt it my duty to devote the intervals
of time I could command to a personal investigation of the
subject, in order to be able to recommend to you such
specific measures as the exigency seems to require, in the
direction indicated in the following passage of the Message
I had the honor to communicate at the beginning of your
session :

" A careful investigation whether the net incomes of the canals
retained cannot be increased, ought to precede a surrender of
what little now exist. Ordinary repairs should be scrutinized
with a view to retrenching their cost and to obtaining the largest
possible results from the outlay. . . . All improvements should
be governed by a plan and purpose leading to definite results,
and instead of scattering expenditures on imperfect constructions,
should aim to complete and make available the specific parts
undertaken. Unity of administration and of system, both in
respect to repairs and improvements, should be established."

Exhibit A is a comparative monthly statement of the tolls
on all the canals for the years 1873 and 1874. p ro babie income
It shows that during the months of October ofthecanals -
and November, and a few days of December which fall within
the present fiscal year, in which period about one quarter
of the tolls of the year were collected, the decrease of tolls
is from $836,123.27 to $638,132.96, or $197,990.31. The
decrease is about one fourth of that portion of the tolls. A
corresponding decrease for the months of May, June, July,

VOL. II.




98 THE WORKS OF SAMUEL J. TILDEN. [1875.

August, and September, 1875, as compared with the same
months of 1874, would amount to 8600,000. That would leave
the tolls for the fiscal year of 1875 at 82,037,000.

Assuming them to realize 82,250,000, we are next to find
the probable effect of the reduction in rates which is now
proposed.

Exhibit B is a statement of the effect of the reduction in
the rates proposed computed on the tolls of the calendar year of
1874. If a similar computation be made on 82,250,000, instead
of 82,637,070, the reduction of receipts to be produced by the
lowering of the rates would be 8534,832. The gross tolls
accruing from all the canals for the fiscal year ending Sept.
30, 1875, would be 81,715,168.

This diminution of tolls presents in a strong light not only
the general depression of commerce, but particularly that of
the special business of the boatmen and forwarders.

The public mind is apt to be confused by the various

Taxation for canal methods ill which the Complex aCCOUlltS of
purposes during five .

years from Oct. i, the fetate arc kept. A careful analysis and

1869, to Sept. 30, /

1874. comparison ot those accounts enables the iol-

lowing results to be stated in a simple form:



The total amount of the tolls on all the canals dur-
ing the five fiscal years ending Sept. 30, 1874,
was $15,058,361.75

The aggregate of ordinary expenses and ordinary

repairs during the same period was 9,202,434.23

The apparent surplus was $5,855,927.52



The aggregate of extraordinary repairs during the

same five years was $10,960,624.84

Deduct the apparent surplus 5,855,927.52



Real deficiency, being excess of repairs ordinary

and extraordinary over the whole tolls .... $5,104,697.32



iS 7 S-] CANAL ABUSES AND MISMANAGEMENT. 99

Other payments were,

Interest $2,908,617.46

Cost of premium on gold .... 703,46^.35
Cost of premium on stock pur-
chased ' 31,736.00

Transfer expenses, etc 21,238.49

$3,665,060.30

Actual cost, exclusive of reduction of debt . . . $8,769,757.62
Payment of debt,

Canal debt $2,334,350.00

General Fund debt, over the reduc-
tion of moneys in sinking funds, 2,552,132.28

- $4,886,482.28

Contribution to General Fund 200,000.00

$13,856,239.90

The taxes levied for these purposes during the

same period were $14,789,848.25

All these payments are directly for canal purposes, except
$2,552,132.28, which is in reduction of the General Fund debt,
and 8200,000, which was supplied to the General Fund. These
two payments, also, are indirectly of the same character ;
they merely replace fresh advances made by the General Fund
to the canals.

In the five years anterior to the period under consideration,
from Oct. 1, 1864, to Sept. 30, 1869, the taxes levied to meet
deficiencies in the sinking fund were 81,873,030.54, and the
taxes levied for extraordinary repairs, awards, etc., were
86,322,632.52, making 88,195,663.06.

The Constitution (Art. VII. sec. 5) provides that "Every
contribution or advance to the canals or their debt, from any
source other than their direct revenues, shall, with quarterly
interest at the rates then current, be repaid into the Treasury,
for the use of the State, out of the canal revenues, as soon as
it can be done consistently with the just rights of the creditors
holding the said canal debt."

In citing this mandate of the Constitution, it is not intended
to revive the illusion that even the most recent advances of the



100 THE WORKS OF SAMUEL J. T1LDEN. [1875.

State for the use of the canals will ever be restored to the
Treasury. There is little probability that they can be regarded
as investments capable of producing a reliable income. So far
as these enormous outlays have been usefully expended, the
State will have to find its compensation for the taxes it has
imposed upon the people, in the indirect benefits of its efforts
to cheapen the interchange of commodities.

Exhibit C shows the expenditures for extraordinary repairs,
etc., for each of the five years. Exhibit D shows the expendi-
tures from taxation for the sinking funds during the same
period. Exhibit E shows the specific application of the surplus
of tolls over ordinary expenses and repairs.

Some items of the outlay attract attention. On the canals
Character of the which the amendment of the Constitution au-
expenditure. thorizes the Legislature to abandon, there was
expended for

Extension of the Chenango Canal $676,158.68

Black Eiver improvement 15,400.00

OneidaLake 100,000.00

Extraordinary repairs 899,852.82

Awards, etc 969,875.57

" . $2,661,287.07

If the inability of these canals to meet their ordinary ex-
penses, or indeed to make any respectable contribution toward
that purpose, shall compel their abandonment, this great ex-
penditure will be a total waste of money, wrung from the
people by taxation.

On the Erie Canal the following are two specimens :

Work up to Feb. 1, 1875, on contract on section 1 of

Erie Canal, contracted at $74,183.40 $458,114.72

Work in Black Eock and Buffalo har-
bors, expended $717,333.00

Engineering expenses estimated . . . 71,733.00

Additional appropriation unexpended . 170,000.00

959,066.00

$1,417,180.72
Total $4,078,467.79



IS75-] CANAL ABUSES AND MISMANAGEMENT. 101

This constitutes four millions of the eleven millions expended
and the twelve millions appropriated for canal improvements
within the last five years.

In the mean time the whole expenditure at rates
far too costly on the Erie Canal for doubling
locks was $718,984.23

For taking out the wall benches 1,013,870.25

$1,732,854.48

It is impossible, in the limited time which the exigency allows,
thoroughly to investigate the vast mass of various outlays which
have cost the people eleven millions of dollars. But the neces-
sity of determining at once the tolls and appropriations ; a sense
of how small a share of this burdensome taxation has attained
any real utility, and how much of it has been wasted in unneces-
sary work or in the extravagant execution of improvements in
themselves useful ; and a clear perception of the main sources
of the evils of administration and of reforms attainable by
legislation without a change of the Constitution, make it my
duty now to recommend specific and affirmative measures of
redress.

It is not merely in the general laxity and demoralization
of official and political life that we are to look
for the causes of these evils. The interest which
fattens on abuses of public expenditure is intelligent, energetic,
and persistent. Acting as a unit, it takes part through its
members in the organization and the doings of both political
parties ; seeks to control nominations ; rewards friends and
punishes enemies ; and it begins to operate by every form of
seductive and coercive influence upon public officers, as soon
as they are elected. The vast mass of the taxpayers are occu-
pied in their daily industries, on their farms and in their work-
shops, and cannot easily, and do not in fact, make a business
of politics. In a silent contest with the tax-consumers they
are often practically unrepresented. It is only when they are
aroused and organized, and can find representatives whom they
trust, that they protect themselves and overwhelm all resistance.



102 THE WORKS OF SAMUEL J. TILDEN. [1875.

Useless works in the specious garb of improvements arc under-
taken because of the indifference of the public officers, the
inertness of the taxpayers, the indefatigable efforts of an
influence seeking a benefit for its locality, which costs it an
insignificant share of the burden imposed on the people, or the
eager activity of the class who seek profit in contracts for con-
struction without reference to the utility of the work. Vertical
Avails are made to provide wharves for private individuals, and
bridges where no public interest requires them. Fictitious
improvements are contrived to supply profitable jobs. Work
of real utility is made to cost greatly more than its actual
value.

In making these observations I do not leave out of view
those honest citizens who, while employed upon the public
works, have sought and obtained only a fair and just return
for their labor, skill, and capital. But in framing laws we must
guard against the influence of self-interest upon the minds of
honest men.

I renew the recommendation in respect to the canals which
Appropriations for the recent amendments of the Constitution em-
and repairs?* powered the Legislature to " sell, lease, or other-
wise dispose of," that while the manner of their disposition
remains undetermined, "no expenditures should be made on
those works not strictly necessary in view of their probable
future." In order to carry out this policy, the appropriations
for ordinary expenses and repairs upon them should be specified,
separated from the provisions for the canals which the Consti-
tution requires to be retained, and should be reduced to the
lowest practicable amount.

In respect to ordinary expenses and repairs to the canals
which are to be retained as the property of the State, I recur to
the suggestion which I had the honor to submit in the Annual
Message,

" Ordinary repairs should be scrutinized with a view to retrench-
ing their costs, and to obtaining the largest possible results from
the outlay."



I875-] CANAL ABUSES AND MISMANAGEMENT. 103

In the present state of the prices of materials and the wages
of labor, if the public officers can be inspired with a resolute
purpose to make every expenditure for these objects effective,
there ought to be no difficulty in reducing the appropriations
from one quarter to one third below the amount provided for
last year. The present standard of repair and efficiency must
be fully maintained. Everything of good administration con-
sists in the selection of the most necessary and useful objects

v t)

of expenditure, and in securing the greatest effectiveness in
the application of labor and the most advantageous purchase
of materials.

If a sense of accountability and a determination to accom-
plish this result can be diffused throughout the agents em-
ployed in the public service, this object will be easily and
certainly attained.

The wisdom of abstaining from all new work except that
which is not only useful, but absolutely necessary, Appropriations for

, . " . iiii A- i extraordinary

is obvious. Every item should be scrutinized repairs.
with jealous care.

The aggregate ought to be kept within half a million, and as
much below that maximum as possible. A thorough retrench-
ment in ordinary and extraordinary repairs will enable the
State to remit for the present year, as compared with the last,
to the boatmen and transporters from five to six hundred
thousand dollars of tolls, and at the same time to give relief to
our over-burdened taxpayers in a reduction of taxes to the
extent of more than a million and three quarters of dollars.

If the restoring the Erie Canal to its proper dimensions and
the deepening of its water-way, which is by far the most useful
improvement contemplated, can be deferred till next year, after
its present condition shall be accurately ascertained, and then
be proceeded with gradually, there is little else which cannot
wait. Justice to the people and to the canals demands that
all extraordinary repairs beyond what are clearly necessary to
efficient navigation should be suspended until a thorough in-
vestigation shall show that every improvement proposed is



104 THE WORKS OF SAMUEL J. TILDEN. [1875.

really necessary, and that the work is to be conducted under
fair lettings and contracts, and is to be faithfully executed.
At the opening of navigation in the present season the
double locks will be completed. The capacity

Erie Canal.

of the Erie Canal to do an aggregate business
will be several times the requirements of the largest tonnage
it has ever had. The removal of the wall-benches will be so
nearly completed that the advantages of that change will be
practically secured. On Sept. 30, 1874, there remained of
wall-benches ^-^/-Q miles on the towing-path side, of which
12 T 2 ^ miles are contracted to be removed, and 46 T y^ on the
berme side, of which 7^-$ are contracted to be removed ; leav-
ing 12y 2 Q 3 ^ miles on the towing-path side, and 39^^ miles on
the berme side, where the obstruction is much less important ;
or equivalent in all to twenty-six miles on both sides. That
is less than 7 per cent of the whole length of the canal. The
engineer's estimate of the cost of removing the remaining
wall-benches was, in January, 1874, 8711,140 ; and an appro-
priation of $360,000 was made by the Legislature of 1874,
which will be available for expenditure during the present
year. As the only effect of the wall-benches now remaining
is that they contract the canal at its bottom from fifty-six feet
to forty-two feet, and in that proportion the lower part of the
prism, forming a section four feet above the bottom of the
water-way, thus lessening the body of water in which the boat
moves for a fourteenth part of the length of the channel,
and but one fifth of that on the towing-path side, the incon-
venience of their existence to this limited extent is not very
great or emergent.

In my judgment a far more important improvement of the
Erie Canal would be effected by a thorough system of ordinary
repairs which should give the water-way its proper and lawful
dimensions, and by progressively deepening it wherever reason-
ably practicable, from seven to eight feet. As the object would
be merely to enable the submerged section of the boat to move
in a larger area of water, so that the displaced fluid could pass



i875-] CANAL ABUSES AND MISMANAGEMENT. 105

the boat in a larger space, it would not be necessary to alter
the culverts or other structures, or to carry the walls of the
canal below the present bottom; and the benefit would be real-
ized in each portion of the canal improved, without refer-
ence to any other part of the channel which should remain
unchanged. In facilitating the movement of the boat and
quickening its speed, it would increase the amount of ser-
vice rendered in a given time, and would thereby diminish
every element of the cost of transportation. It would benefit
the boatmen and carriers more, even, than one cent a bushel
remission of tolls. It would be of more real utility to navi-
gation than five or ten times its cost expended in the aver-
age manner of so-called improvements on the public works.
But it is too simple, too practically useful, to enlist the im-
agination of projectors who seek the fame of magnificent
constructions, and of engineers who build monuments for exhi-
bition to their rivals, or to awaken the rapacity of cormorants
who fatten on jobs.

I renew the recommendation of my Annual Message upon
this subject ; and would draw particular attention to this
clause, " that provisions be made by law to enable the State
Engineer, soon after navigation is opened, to measure the depth
of water in the canal by cross-sections as often as every four
rods of its length, and on the upper and lower mitre-sill of each
lock."

The Constitution of the State provides that " All contracts
for work or materials on any canal shall be made

Canal lettmgs.

with the person who shall offer to do or provide
the same at the lowest price, with adequate security for their
performance." This requirement was intended to protect the
State from extravagant contracts ; but by artful bids, and in
some cases by fraudulent combinations, it is made an instru-
ment to defeat the very end had in view by its authors. I
have examined more than one hundred contracts, and I find
that most are so contrived that not only does the State in the
end pay from two to four times the amount of the contract,



106 THE WORKS OF SAMUEL J. TILDEN. [1875.

but that the work is not given to the lowest bidder in fact,
although it may be in form. This result is brought about by
the following contrivance. When a contract is to be let, the
engineer makes out an estimate of the quantity and kinds of
work to be done. Those who make bids state at what prices
they will do each kind of work or furnish each kind of mate-
rial. These prices are footed up, and the bid which amounts
to the smallest sum is accepted. The sums thus agreed upon
average but little more than one half the amounts estimated
by the engineer, and apparently the State makes advantageous
contracts. On examination it will be found that the prices
for the several items bear no relation to their real value. In
some instances excavation of earth is put at one cent per
cubic yard, and in others eighty-five cents are asked ; exca-
vation of rock blasted at one cent in some cases, and two dol-
lars in others; slope-wall is bid for in some cases at twenty
cents, and in others at two dollars; hemlock timber, which
is worth at least twelve dollars per thousand, is in some
contracts put at less than three dollars per thousand, and
in others at thirty dollars per thousand ; oak timber in one
instance is put at one dollar per thousand, and in others at
seventy dollars. Some items are absurdly low, others un-
reasonably high. li. ome instances a contractor will put in
proposals on the same day for different jobs ; but the prices
for the same kind of work or materials will vary in his several
proposals many hundred per cent.

It is clear upon the face of such proposals that some fraud
is designed ; but the commissioners have been in the habit of
accepting them. I am happy to say that Commissioner Thaycr
at a recent letting rejected this class of proposals, which are
known as " unbalanced bids." Heretofore they have been
accepted ; and not only has the State paid unreasonable prices,
but more than one half of the work on large contracts has
been done and paid for without being advertised or offered to
the lowest bidders.

The contractor gains these results by the following strategy :



I87S-] CANAL ABUSES AND MISMANAGEMENT. 107

When the engineer's estimate of quantities and kinds of
material are published by the commissioners, the contractor
will find out by collusion, or in some other way, what quan-
tities of each kind of work or material will, in fact, be required,
or he will see what influence he can exert to change the con-
tract after it is made. If it is changed, no new letting is had, ,
but he claims the job as his right. He then puts in his bid,
offering to do such work or to furnish such material as he finds



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