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will not be required at all, or in small quantities, at absurdly
low prices, at a quarter or in some instances at a twentieth
part of its cost. The items which will be required in full, and
probably in extra quantities, he will put at unreasonably high
rates ; and it turns out that what the contractor offers at low
prices is called for in small quantities, if at all, while those
which are put at high prices arc not only required in full, but
in most cases in extraordinary quantities.

An example will more clearly illustrate how the State is
defrauded by these devices. The engineer having estimated
certain work and materials as follows :

100 cubic yards of vertical wall, at 83 .... $300.00

3,855 " slope wall, at $1.50 .... 5,782.50

2,400 feet B. M. white oak, at $50 120.00

60,000 hemlock, at $15 900.00

Total estimate . $7,102.50

A.'s bid for the job at these rates amounted to . . 7,102.50

B.'s bid for the same was, for

100 cubic yards vertical wall, at $6 $600.00

3,855 " slope wall, at 30 cents . . . . 1,156.50

2,400 feet B. M. white oak, at $70 168.00

60,000 " hemlock, at $3 180.00

And aggregated $2,104.50



The proposal of B., apparently so advantageous to the State,
was accepted, and the contract awarded to him as the " lowest
bidder." But afterward, by some influence, it was decided to
make only vertical, and no slope wall, and to use only oak,



108



THE WORKS OF SAMUEL J. TILDES.



[1875.



and no hemlock timber. There was no re-letting although

O f O

the agreement had been in fact revamped into a new and
different contract, which enabled B. to collect from the State
for

3,955 cubic yards of vertical wall, at 86 . . . . $23,730.00
62,400 feet B. M. white oak, at $70 4,368.00

The sum of 828,098.00

It will b seen that in such transactions,- -and they are nu-
merous, in violation of the Constitution, the contractor gets
the work without there having been in fact any public letting,
or any chance for competition by others.

For the purpose of showing actual results of this system, I
state the following ten cases, which oive the amount the State

< / / v_^

has paid on certain contracts in comparison with the sum for
which the contractor agreed to do the work at the lettinsrs made

o ~

by the commissioners :



Contract No.

C(

it
(t
II
((

(I
II
((

U



1

2
3
4
5

6

7

8

9

10



Amount of contract upon
exhibited quantities at
contract prices.

$74,183.40
29,431.00
37,871.00
10,617.00
14,397.00
85,562.50
31,286.00
86,584.00
9,504.00
45,300.00



$424,735.90



Amount actually paid
by the State up to
Feb. 1, 1875.

$458,114.72

56,845.68
110,320.13

49,936.30

78,967.20
220,614.58
130,317.45
222,610.68

41,127.55
191,915.55

$1,560,769.84



These show that the State has already paid nearly four times
the amount which was involved by the terms of the contracts ;
and though this excess amounts to more than a million of

Cj

dollars, some of the expenditures are still going on, with no
prospect of completion. It also appears that of the expendi-
tures of 1,560,769.84, only 8424.735.91, less than one third,



i8;s-] CANAL ABUSES AND MISMANAGEMENT. 109

was submitted to a public letting. By manoeuvres of this char-
acter the cost of public works is run up to extravagant sums.
Appropriations are absorbed, deficiencies are created to be
paid by new appropriations, and the people are loaded down
by taxes.

Desiring to co-operate with you in a reform of existing
abuses and of the systems which have conduced

Kemedial meas-

to them, I submit to your consideration such ures -
suggestions for new legislation as seem to me adapted to
meet the wishes and protect the interests of our common
constituents.

Methods ought to be devised to make the estimates of the
kinds and quantities of work exhibited on the Engineers' esti-
quantity sheet for lettings of contracts to con-
form to the actual work to be done. On a change of the
plan or specifications of a contract, the work under the. old
contract should be closed, and a new letting should take
place.

The law authorizes the Canal Board to make regulations as
to the biddings, and one of those regulations
provided for discarding bids which show bad
faith upon their face. As the officers who let the contracts
have not enforced this regulation, except in a recent case, a
law should be passed defining their rights and duties in this
respect.

I recommend that hereafter the bids be opened and the
awards of contracts be made by the Canal Board. It is a
larger body, and contains the officer who is charged with the
fiscal administration of the State, and also the State engineer.
It was formerly vested with these duties, and the change was
only made to serve a temporary party object.

In the organization of governmental powers two conditions
seem essential to the well working of the Q^^ accoun ta-
machinery of administration. First, while un- blllt ^-
due concentration of powers should be avoided, and checks and
balances in the requirement of the concurrent action of several



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

persons are preserved, a certain unity of function and of
organization is necessary to enable the people to enforce any
real responsibility.

An issue in regard to the conduct of public officers or in
regard to a policy of administration should be submitted to
the people with the simplicity of an issue to a jury at common
law. The million of voters in the State cannot resolve them-
selves into a committee of investigation to hunt out by long
and tedious search the particular wrong-doer ; they cannot
convert themselves into a court to go through a complicated
and protracted trial. Amid the numerous and changing
objects of interest which attract their attention they cannot
devote themselves to a single specific measure of ordinary
importance for three successive years. All schemes of ad-
ministration which involve such impracticable demands for
the co-operation of such vast numbers of individuals discard
the idea of representation in government ; they compel the
whole voting mass to conduct the complex affairs of human
society in person ; they are snares invented to destroy the
power of the people in their own government, to neutralize
the elective principle, and to create official irresponsibility.

The members of the Canal Board, other than the Canal
commissioners and the Lieutenant-Governor, are all chosen at
one election. The elective power of the people is effectual to
make a change of persons or policy; but the Canal com-
missioners are elected one each year, and it takes three years
to make a complete change. They have practically ceased to
act as a board. Each one carries on his administration over
his division of the canals as if he were a totally independent
authority. They make three separate reports. Each one
prepares a separate annual estimate for future expenditures.
They formerly sat as members of a board of Canal com-
missioners, who consulted, decided, and acted as one integral
body. Their most important functions were performed as
members of the Canal Board, or in concert with the Canal
Board, which embraced the great officers of the State, includ-



I87S-] CANAL ABUSES AND MISMANAGEMENT. HI

ing its fiscal representative, who is under an ever-active
pressure to make both ends meet in the financial affairs of
the State. They were practically subordinate to the fiscal
members of the Administration.

Secondly, it is fundamental that the spending officers must
l)e subject to the influence and control of the officers whose
duty is to provide the ways and means. No great corporate
business, no private affairs could be conducted successfully on
any other plan. The experience of the State, under a system
in which the officers who initiate expenditure and control the
application of the public money and the execution of public work
have been independent and practically irresponsible, has been
fruitful of irregularities, extravagance, waste, and corruption.
There have been several futile impeachments, but no real remedy.

It does not seem expedient to wait for a change which in-
volves an amendment of the Constitution, and will, therefore,
take several years. There are measures within the competency
of the Legislature which can be put into immediate opera-
tion, and which will have great efficiency to remedy the evils.
Among these, the suggestion has occurred to me that an in-
spector of public works can be created by law, who shall be in-
vested with full powers of investigation, and shall report to the
Governor and Legislature, and who shall derive his appointment
from a source completely independent of the canal officers.

Another expedient worthy of your consideration is to enforce
the accountability of the officers charged Avith the disburse-
ment of the public money, by a liability to summary removal
or suspension. The Constitution (Article X. Section 7)
commands,

" Provision shall be made by law for the removal for misconduct
or malversation in office of all officers (except judicial) whose
powers and duties are not local or legislative, and who shall be
elected at general elections, and also for supplying vacancies
created by such removal."

At the close of the session of the Convention of 1846, on the
day before its final adjournment, it was discovered that, except



112 THE WORKS OF SAMUEL J. TILDE N. [1875.

in the case of the treasurer, no provision had been made for
the removal of State officers having charge of public funds, who
had been made elective by the people of the whole State. The
Convention, not undertaking at so late a period to devise a
system, devolved that duty on the Legislature. This power
has remained twenty-nine years unexecuted,
i It is a duty of the Legislature which ought no longer to
remain unperformed. Applied to the Canal commissioners,
who are agents not only in the application, but also in the cus-
tody and disbursement of the public moneys, and to the State
engineer, who, with his subordinates, exercises great power
over the expenditure by his estimate of the cost and certificates
of the performance of work, it would be an improvement upon
our administrative system in accord with the intention of the
Constitution, with sound principles of government, and with
the indications of experience.

Provision ought also to be made by law for regulating
the formation of the annual estimate for future expenditures.
It ought not only to be the result of consultation between the
Canal commissioners, but should also have the written ap-
proval of the State engineer as to the necessity and cost of the
work, and of the comptroller as to its propriety, considered in
connection with the financial administration.

It would doubtless be a valuable improvement to create a
paymaster, appointed by the commissioners of the Canal Fund,
who should be accountable to the auditor, and should make all
payments on the certificates of the Canal commissioners and the
State engineer. With these provisions the control of the State
engineer over his subordinates might properly be enlarged.

I have deemed it my duty to look beyond the abuses prac-
Other matters to tlsed in the letting of contracts, and to see if the

materials have been delivered and the work has
been done for which so many millions have been paid out by
the State, and also to learn if the locks, walls, and other struc-
tures have been built in a faithful way and in compliance with
the contracts. I am satisfied, from information I have already



I87S-] CANAL ABUSES AND MISMANAGEMENT. 113

gained, that there should be an investigation of these subjects.
It is my purpose, with the aid of the members of the Canal
Board, to have an examination made of our public works, and
to learn their condition. It may be too late to detect all frauds ;
but many may be exposed and punished, and a check put upon
practices so destructive to morals, as well as to the public
interests of the people of the State.

It is clear that under the present system of canal manage-
ment the people will not be relieved from taxa-

Conclusion.

tion, the boatmen from high tolls, or the needed
improvements of the Erie and Champlain canals be finished. It
is in our power to gain these great objects by a wise and an
honest policy of retrenchment, reform, and official responsibility.
Unfortunately the abuses now practised against our canals and
their commerce are exciting strong prejudices against these
great public works rather than against the wrong-doers and
the wrong-doing which tend to destroy them.

Our duty is clear. Let us cut off the expenses which divert
revenues from general improvement of the canals to local or
individual purposes, and make every official, every employe,
every contractor, feel that the laws you have just passed
against fraud will be enforced ; and then our canals will be
finished, their commerce revived, and taxation will be lessened,
not only as it oppresses the boatmen, but also all other classes
of our citizens.

There is no real antagonism between the boatmen and for-
warders who seek a fair compensation for their services, the
public who desire cheap transportation, and the people who
justly claim some relief from the present intolerable pressure
of taxation ; their interests are joint. Whenever these classes
are brought into a false position of apparent hostility, it is sure
proof either of a bad state of laws or of an unfaithful perfor-
mance of official duties. Whoever for illicit gain despoils or
wastes the resources applicable to these objects is the common
enemy of the boatmen and the taxpayers, who must unite to
enforce measures of reform and redress.

VOL. II. 8



114



THE WORKS OF SAMUEL J. TILDEN.



[1875-



EXHIBIT A.

A comparative monthly statement of the tolls for 1873 and 1874.



MONTHS.


1873.


1874.




$258,028.29
439,888.24
466,825.67
455,799.88
520,053.40
529,214.91
304,610.00
2,298.36


361,898.96
492,393.57
413,525.09
308,769.10
422,351.24
392,460.83
243,569.38
2,102.75


May




July














$2,976,718.57


$2,637,070.92



EXHIBIT B.

A statement of the amount of reduction of tolls which would result from the plan
proposed by the Committee of the Canal Board, computed on the business
of 1874.

The reduction proposed is as follows : On wheat, corn, rye, barley, and oats,
one third ; on products of wood, one quarter ; on merchandise, one half.





Tolls at rates of
1874.


Tolls at proposed
rates for 1875.


Loss by the reduc-
tion.


Wheat


$695 003.00


$463,335.00


$231,668.00


Corn


500,297.00


333,532.00


166,765.00


Rye


4 504.00


3 002.00


1,502.00


Barley


42 264.00


28,179.00


14 085 00


Oats


52,389.00


34,926.00


17 463.00




718 427.00


538 821.00


179 606.00


Merchandise


60 110.00


30,055.00


30 055.00












$2,072,994.00


$1,431,850.00


$641,144.00



Total tolls $2,637,071.00

Total tolls, boats 160,328.00

Tolls on freight 2,476,743.00



Total tolls collected at the tide- water offices in 1874 on freight

going West and North $233,200.72



I87S-]



CANAL ABUSES AND MISMANAGEMENT.



115



EXHIBIT C.

Statement of the sums derived from taxes applied during each of the several

years to work on the canals, etc.



Date.


Damages and
awards.


Extraordinary
repairs.


Improve-
ment and
enlargement
of Champlain
Canal.


Extension
of Chenango
Canal.


Improve-
ment of
Black River
and recon-
struction
Oneida Lake
canals.


Totals.


1870
1871

1872
1873
1874


$55,260.04
980,336.47

772,154.65
677,675.02


$1,016,528.73
2,294,028.20

470,495.71
1,422,688.41
1,763,343.14


$80,000.00
164,713.61

402,297.43
69,544.75

*


$200,000.00
200,000.00

175,000.00
101,158.68


Black River.
$15,400.00



Oneida Lake.
$25,000.00
50,000.00
25,000.00


$1,367,188.77
3,639,078.28

1,072,793.14
2,415,546.49
2,466,018.16




82,485,426.18


$6,967,084.19


$716,555.79


$676,158.68


$115,400.00


$10,960,624.84
2,895,615.06


Sink

The

\


ing Fund as per Table No.

taxes levied were in excess
-his Table


1



of the taxes applied, as shown in


$13,856,239.90
933,608.35


Total taxes levied for canal currtoses


$14.789.848.25



EXHIBIT D.

Statement showing the sums derived from taxes to supply deficiencies in the
Sinking Funds for payment of principal and interest of the Canal Debt,
and to pay principal and interest of the Floating Debt, under the Con-
stitution (Article VII. Section 12).



Date.


Sinking Fund,
Article VII.
Section 1.


Sinking Fund,
Article VII.
Section 3.


Sinking Fund,
Article VII.
Section 12.


Total.


1870 ....
1871 ....
1872 ....
1873 ....
1874 ....


*



$195,000.00




$913,866.65

*

575,339.69


$227,864.79
240,957.65
251,435.90
230,271.15
260,879.23


$227,864.79
240,957.65
1,165,302.55
230,271.15
1,031,218.92


$195,000.00


$1,489,206.34


$1,211,408.72


$2,895,615.06



116



THE WORKS OF SAMUEL J. TILDEN.



[1875-



EXHIBIT E.

Distribution of the surplus canal revenues for each of Jive years, beginning

with 1870.



DATE.


STTRPLUS.


DISTRIBUTION.


Sinking Fund,
Article VII.
Section 2.*


Sinking Fund,
Article VII.
Section 3.


Fund for Support
of Government,
Section 3.


1870 ....
1871 ....
1872 ....
1873 ....
1874 ....


$569,974.61
981,588.68
1,202,571.35
1,623,286.80
1,478,506.08


$569,974.61
981,588.68
1,202,571.35
1,500,000.00

* *


*
*

$123,286.80
1,278,506.08







$200,000.00


$5,855,927.52


$4,254,134.64


$1,401,792.88


$200,000.00


Sinking Fund, Art. VII. Sec. 2
Sinking Fund, Art. VII. Sec. 3
Fund for support of Governmen




$4,254,134.64
1,401,792.88
200,000.00




t, Art. VII. Sec. 3


$5,855,927.52



* The contribution to this sinking fund in 1873 was a final contribution.



XXXVIII.



WHEN Governor Tildcii caine into office in 1875, fully one
half of the population of the State resided in cities and incor-
porated villages ; and the debt of these corporations amounted
to seventy-five dollars for each inhabitant, and the tax imposed
upon their real estate was equivalent to fully one third, and in
some instances reached to one half of the income from it. The
sums thus levied upon the municipal corporations of the State,
embracing some two and a half millions of inhabitants, were
nearly or quite equal to the total burden of taxation borne by the
entire population of the United States of twenty-five millions
only twenty years before. The abuses of which these figures are
only an imperfect expression had resulted in part from the
neglect of the Legislature to discharge the duty imposed upon
it by the Constitution of 1846 properly to restrict municipal
corporations in their powers of " taxation, of assessment, of
borrowing money, of contracting debts, and of loaning their
credit, " and in part from the as yet unascertained boundaries
which separate the provinces of local and State governments.
The familiarity with these abuses which Mr. Tilden had
acquired in his four years' war with what was commonly
known as the Tweed Ring, made him feel that it was one of
his first duties to see that the Legislature executed the com-
mands of the Constitution and imposed the restrictions upon
municipal corporations contemplated by the Ninth Section
of the Eighth Article of that instrument ; for to its neglect
of these commands was largely due the fact that the debt of
New York citv. which was less than fourteen millions in 1846,

v 7

had already swollen to the enormous sum of one hundred and
twenty millions over and above its sinking fund.



118 THE WORKS OF SAMUEL J. TILDEX. [1875.

The questions involved, however, were very complicated, and
required more study and deliberation than the members of the
Legislature, with their other labors, could well devote to them.
Governor Tildcn therefore recommended the Legislature to
create a commission which should " report to the next Legis-
lature the forms of such laws or constitutional amendments as
were required." His motives for this recommendation are set
forth at length in the following Message.



MUNICIPAL REFORM MESSAGE.

EXECUTIVE CHAMBER, ALBANY, May 11, 1875.

To the Legislature.

THE Constitution (Article VIII. Section 9) declares that " It
shall be the duty of the Legislature to provide for the organiza-
tion of cities and incorporated villages, and to restrict their
powers of taxation, assessment, borrowing money, contracting
debts, and loaning their credit, so as to prevent abuses in assess-
ments and in contracting debt by such municipal corporations."

The Convention of 1846, having exhausted its sessions in
the consideration of questions upon which it acted, and finding
itself unable to deal adequately Avith the problem of municipal
government, on the day before its adjournment charged that
duty upon the Legislature. Its primary object was to protect
taxpayers in the municipalities against abuses on the part of
local governing officials, in taxation for local administration,
in assessments for local improvements, in the contraction of
municipal debts, and in the loaning of municipal credit.

Those evils had already attracted attention, though they
were at that time but in the beginning of the monstrous
growth to which they have now attained. In the twenty-nine
years which have elapsed, the increase of population in this
State has been chiefly in the cities and incorporated villages,
until, at the census of 1870, those organizations embraced
more than two millions, and now about two millions and four
hundred thousand of our people. The course of legislation, so
far from obeying the injunction of the Constitution, has been
mainly in the opposite direction.



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

Every annual statute book has been largely occupied with
enactments favoring the growth of municipal expenditure,
involving taxation, assessments, the contraction of debt, arid
the loaning of credit. The result, so far as the cities of the
State are concerned, is shown by an abstract of reports from
the twenty-four cities which have been furnished to me by the
local officials, and which I herewith transmit to your honorable
body. 1

The aggregate valuation of property in these cities subject
to taxation in 1874 was $1,569,535,074.

The aggregate of city taxation was 836,439,121.

The aggregate of county and State taxation was $13,990,487.

The aggregate of taxation was $50,429,609.

The aggregate debt of these cities was $175,657,267.

Computing the taxation and debt on the population of 1870,
adding 20 per cent for subsequent growth, the city taxation
was $15.57, the county and State taxation $5.98, and the
aggregate was $21.55 for each inhabitant. The city debt was
for each inhabitant $75.80.

It must be borne in mind that the proportion of the assessed
valuation of real estate to its actual value is fixed in these
reports according to a standard from which there is now a
large reduction. The average of the assessment is 55.43 per
cent of the true value. If the recent fall in marketable values
be estimated at one third, the rate of the assessed valuation
would be 80 per cent of the actual value. It may be presumed
that the values stated in these reports have reference to real
property. No allowance is made for the under-valuation of
personal property. It is probable that in many instances the
taxation imposed upon property in cities has been from one
quarter to one third, and by the decline of rents is now one
third, and sometimes reaches one half the income of real estate.
In 1853, when the population of the United States numbered
twenty-five millions, the whole cost of its government was
under fifty-five millions of dollars. It will be seen that less

1 See tables on pp. 136, 137.



I87S-] MUNICIPAL REFORM MESSAGE. 121

than two millions and a half of inhabitants of the cities of New
York pay nearly as much taxation as was imposed on twenty-
five millions about twenty years ago, for the cost of the army,
navy, Indian treaties, and all other expenses of the General
Government.

As I remarked in my Annual Message, " in the decade
beginning July 1, 1865, the people will have paid in taxes,
computed in currency, seven thousand millions of dollars.
Three fifths were for the use of the Federal Government, and
two fifths for the State and municipal governments. It is
doubtless true that some portions of the municipal expenditures
were for objects not strictly governmental ; but it cannot be



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