Wedding of the waters, p.10
Wedding of the Waters, page 10
Jesse Hawley, bankrupt businessman and jailbird, accomplished more than anyone up to that point in provoking action to build an uninterrupted waterway across the State of New York. His eloquence, analytical abilities, and the massive amount of critically significant information in his essays attracted attention in the highest places. Later the essays would serve as a kind of guidebook for the series of commissions sent westward to arrive at definitive plans, budgets, and supply lines for the canal that many commentators would repeatedly call a “stupendous” achievement. Indeed, almost immediately after the appearance of Hawley’s essays, deeds finally began to replace words.
PART II
| The Action Begins |
| CHAPTER 6 |
THE SUBLIME SPECTACLE
Nothing will motivate a politician faster than money. In his second inaugural address of March 4, 1805, President Thomas Jefferson dangled the money. First, he proudly announced the nation’s steadily expanding budget surplus and the early prospect of redeeming the national debt right down to the last dollar. Receipts in the year 1804 had amounted to $11.8 million versus a mere $4.4 million in 1790; expenditures were $8.7 million versus $4.3 million.1
And then he proposed that “the revenue thus liberated may, by a just repartition of [the surplus] among the States and a corresponding amendment of the Constitution…be applied in time of peace to rivers, canals, roads, arts, manufactures, education, and other great objects within each State.” These noble goals were embodied in Jefferson’s dream of what a great republican government owed its constituents, but his words were electrifying to members of Congress, state legislatures, and governors. But more good news was to come. In December 1806, Jefferson reported that the swelling surplus was running well ahead of estimates. And in his annual message to Congress in early 1807, he once again recommended spending the surplus on “internal improvements,” although on this occasion he spoke in generalities rather than specifying the projects he had suggested in 1805.
Jefferson reminds his audience, “The suppression of unnecessary offices, of useless establishments and expenses, enabled us to discontinue our internal taxes. These, covering our land with officers and opening our doors to their intrusions, had already begun that process of domiciliary vexation which once entered is scarcely to be restrained from reaching successively every article of property and produce.”
Consequently, he continues, “It may be the pleasure and the pride of an American to ask, What farmer, what mechanic, what laborer ever sees a taxgatherer of the United States?” Up until the enactment of an income tax during the Civil War, almost all the federal government’s revenue took the form of tariffs levied on imported foreign merchandise and collected at the ports and frontiers. The IRS of the day was little more than a customs-collecting service.
To Jefferson and his fellow citizens, spending surplus revenue at home appeared far preferable to relieving tax burdens on foreigners by reducing the tariffs. Only those few individuals who had read Adam Smith’s The Wealth of Nations, published in 1776, would understand that import taxes are paid for the most part by the citizens of the importing country in the form of higher prices, even if, as Jefferson concedes, the duties are “paid chiefly by those who can afford to add foreign luxuries to domestic comforts.” Jefferson to the contrary, the customs agents were indeed tax gatherers in the fullest sense of the word.
Politicians hastened to respond to Jefferson’s offers to share the wealth. On March 2, 1807, the Senate authorized the secretary of the treasury to prepare “a plan for the application of such means as are within the power of Congress, to the purposes of opening roads, and making canals…which as objects of public improvement, may require and deserve the aid of government.”2 Thirteen months later, Albert Gallatin, the Swiss-born secretary of the treasury, respectfully submitted his recommendations, with apologies for unavoidable delays but he did point out that selecting, arranging, and condensing his material was “a work of some labor.”3
Indeed it was. But Gallatin was no stranger to either hard work or controversy. In 1780, at the age of nineteen, he gave up a fortune and high social position to immigrate because of his “love for independence in the freest country of the universe.” He taught French at Harvard briefly after arriving in the United States and finally settled in Pennsylvania. As a member of the House of Representatives, his financial skills were already so apparent that he was made a member of the first standing committee on finance, subsequently to be known as the Ways and Means Committee. Gallatin’s obsession with meticulous bookkeeping led to the establishment of accounting practices at the Treasury that are still in use today. After the War of 1812, he negotiated a trade agreement with Great Britain that abolished discriminating duties. After serving as minister to both France and Britain, in 1817 he became the president of a major New York City bank and lived to the ripe old age of eighty-eight.
With his long, solemn face and protruding nose, Gallatin had been constantly in conflict with Washington’s secretary of the treasury Alexander Hamilton. It was Gallatin who first proposed the law requiring the secretary to submit a report of his department to Congress and then was instrumental in establishing the House Ways and Means Committee to assure the Treasury’s accountability to Congress. But when he became secretary himself in 1801, in Thomas Jefferson’s first administration, Gallatin followed in Hamilton’s path, making every effort to keep the Treasury independent of legislative interference. He was such an effective Cabinet member that he stayed on the job through both of Jefferson’s terms and into James Madison’s second, for a total of thirteen years—the longest tenure in history.
Gallatin’s report of 1808 is a remarkable document, masterly in its presentation, keen in its intuitive grasp of the power of networking, authoritative in its handling of the economics of internal improvement, and fascinating in its wealth of detail about the development of transportation systems. His work could well serve as a textbook for the basic principles of economic development in our own time.
Gallatin rests his case on the principle that improved transportation is an indispensable condition for increasing national income and wealth. Good roads and canals do more than just reduce the expenses of moving cargo and people. An improved transportation system would make it possible for the first time to move goods that had been excluded from trade and commerce, due to their excessive weight or the distance of their origin from potential markets. By increasing the volume of goods entering trade and commerce, the transportation system would instantaneously increase national wealth.
Quite aside from Gallatin’s keen insights into the rewards to the nation of these internal improvements, he had a strategy to achieve his goal in the shortest possible time and with the least political infighting. Each project would matter to the communities immediately affected more than to communities located farther away, but by combining the interests of all in advance in one giant piece of legislation, the entire United States would be engaged in creating a single great system instead of a fragmented process in which the citizens of each state would be trying to get their hands on the money before some other state got there first.*
By that time, the inland territories of Vermont, Kentucky, Tennessee, and Ohio had joined the original thirteen states. Most localities in the early 1800s, like these new members of the union, had little interest in trading with their neighbors, who, except along the Atlantic seacoast, were far away from one another or were producing the same types of goods and services. Consequently, Gallatin explains, the first pathways of communication built in an undeveloped economy like the young United States were destined to be unproductive. In order to do any volume of business, connections over long distances were absolutely essential. The urgent need, Gallatin explained, was for a nationwide network of roadways and canals linking each local pathway to the larger whole.
Gallatin complains that progress in these directions in the United States has been slow, because the resources of private investors or local governments are too small to achieve this greater goal. As he points out, “The great demand for capital in the United States, and the extent of territory compared with the population…are, it is believed, the true causes which prevent new undertakings, and render those already accomplished [such as the Western Inland Lock Navigation Company], less profitable than had been expected.”4 And so, Gallatin concludes, “The general government can alone remove these obstacles. With resources amply sufficient for the completion of every practical improvement, it will always supply the capital wanted for any work which it may undertake.”5
Gallatin emphasizes an additional compelling consideration. An efficient nationwide transportation network will stimulate a community of interests that would unite people in every part of the nation. Nothing else within the power of government could do more to reinforce “that union, which secures external independence, domestic peace, and internal liberty.”6 Here he echoes Washington’s pivot and anticipates De Witt Clinton’s eagerness to establish a grand transportation system in New York, but he reflects the thinking of an even more auspicious authority, Adam Smith, who declared in 1766, “The division of labour, in order to opulence, becomes always more perfect by the easy method of conveyance in a country…. Water carriage is another convenience, as by it 300 ton can be conveyed at the expence [sic] of the wear and tear of the vessel, and the wages of five or six men, and that ton in a shorter time than by a hundred wagons which will take six horses and a man each.”7
Gallatin does mention canals between the Hudson and Lake Erie, which he considered of first-rate importance, but his scheme differed significantly from what Hawley had been considering. He describes two canals, one running beside the Mohawk and from there up to Lake Ontario and a second canal connecting the western end of Lake Ontario to Lake Erie and bypassing Niagara Falls. His estimate for this project is in the area of $3 million, about half the ultimate cost of the full 363-mile canal running all the way from Albany on the Hudson to Buffalo on Lake Erie.
This is just one example of Gallatin’s detailed analysis of canals and roadways throughout the country. But Gallatin also includes contributions from two famous experts, Robert Fulton, who needs no introduction, and Benjamin Latrobe, the great Yorkshire-born architect who introduced the Greek revival style to the United States and was the primary architect of the Capitol in Washington.
Latrobe takes a dim view of canals like the Patowmack, designed only to bypass waterfalls and other difficult passages of rivers. As Benjamin Franklin had written in 1772, in a letter from London to the mayor of Philadelphia, “Rivers are ungovernable things, especially in Hilly countries. Canals are quiet and very manageable.”8 Franklin was no doubt aware of the even stronger statement on this matter by James Brindley, the engineer of the Bridgewater Canal, who once said that small rivers “were intended by the Almighty for feeding canals.”9 These were precisely Latrobe’s views.*
It is interesting to note that the Spanish clergy in the 1580s had taken precisely the opposite position, declaring, “If God had intended for the rivers to be connected, He would have made them so.”10 In view of the tremendous importance of efficient transportation networks and the poor navigability of her natural rivers, Spain’s failure to develop economically in step with the rest of western Europe was a significant but unfortunate consequence of this attitude.
Robert Fulton had only recently returned to the United States from an extended stay in Europe. He was both showman and genius, combining many of the talents of P. T. Barnum, Thomas Edison, Bill Gates, and Leonardo da Vinci. He had originally crossed the Atlantic to improve his skills as a painter of miniature portraits, his primary source of income at the time. His refined facial structure and gracious manners gave him the air of an artist all his life, but his natural engineering and inventive talents soon overtook his interest in becoming a famous painter.* He had already invented a submarine, in which Napoleon had shown great interest. In 1796 Fulton published a book on small canals, which he boasted about in correspondence to George Washington a year later.
Now Fulton was fixated on the notion of canals for bringing great quantities of merchandise to market at prices far cheaper than road transportation. His analysis in the Gallatin report is a dazzling performance in support of this viewpoint. He provides a wide variety of examples from existing routes in the United States and reveals a keen sense of how such reductions in the cost of moving freight can enhance and enrich the process of economic growth.
Fulton estimates that construction of a canal would cost about $15,000 a mile, a figure remarkably close to the $6 million spent on building the Erie Canal, where work would not even begin for another nine years.
The primary attraction of moving cargo on a canal instead of on a river is in the calm and flat surface over which a canal boat can travel without having to deal with either upstream or downstream currents. A well-built boat floating on water could carry much more freight at no slower a speed than a horse-drawn wagon rumbling along a bumpy road. On most canals at that time, boats had no motive power of their own but were pulled along by horses or mules walking on a towpath by the side of the canal, with a boy leading or riding on the horse and a man on board steering the boat. Although this sounds like a poky, primitive means of locomotion, in reality it was the critical technological advantage over travel by road or by river. By allowing the boat to move smoothly along its waters, the canal avoided all the heavy human efforts spent poling boats upstream on rivers and controlling the speed when moving downstream—major obstacles on both the Potomac and the Mohawk. As a result, a canal could carry larger boats, with more cargo-carrying capacity than boats forced to confront the trials of river travel.
Fulton begins his argument with an actual example involving a canal boat with one man, one boy, and one horse, the usual combination. This boat is moving 25 tons of cargo twenty miles a day. Fulton estimates that the man, the boy, and the horse would cost a total of $2.50 a day. Tolls to cover the cost of maintaining the canals, plus tolls at locks, inclined planes, tunnels, and aqueducts would add another $2 a day. He completes his estimate with 50¢ for the interest on the wear of the boat. The total comes to $5 a day for moving 25 tons twenty miles, which works out to 20¢ a ton, or, more simply as a rule of thumb, $1 a ton for a hundred miles. The cost by road, over the same distance, he points out, would be $10 a ton.11 Even on a road of the best kind, Fulton explains, four and occasionally five horses are often required to transport as little as 3 tons, or less than 1 ton per horse, while one horse can draw 25 tons on a canal. The saving that results is not only in the cost of the horses themselves, but their feeding, shoeing, gear, wagons, and care.12
Along the way, Fulton calculates, “The merchandize which can bear the expense of carriage on our present roads to…any…distance of 300 miles, and which for that distance pays 100 dollars a ton, could be boated on canals ten thousand miles for that sum.”13 No wonder, then, that he comes out loud and clear in favor of canals, and not just for the dramatic reductions in transport costs they provide. Eloquent and persuasive as Fulton is, he fails to mention the most compelling element of his whole argument: that by reducing the cost of transport from $10 a ton to $1 a ton, it would be profitable to move a far greater variety and quantity of goods to market. This is the very essence of what economic growth and development are all about.14
There are also the vast benefits of networking: “When the United States shall be bound together by canals, by cheap and easy access to market in all directions, by a sense of mutual interests arising from mutual intercourse and mingled commerce; it will no [longer be] possible to split them into them into independent and separate governments, each lining its frontiers with fortifications and troops, to shackle their own exports and imports to and from the neighboring states.”15 Fulton ends with a charming quotation from his book on small canals, in which he contemplated the time when “canals should pass through every vale, wind round each hill and bind the whole country together in the bonds of social intercourse.”16
All of these writings, debates, speeches, and proposals were symptomatic of a more basic set of trends. The economy of the young United States was developing so rapidly that the rudimentary transportation system of the late 1700s was not just obsolete—it was a positive restraint on economic growth.
By the time of Jefferson’s inaugural address in 1805, the nation’s population had grown to 6.3 million people from 3.9 million in 1790, an annual growth rate of 3.2 percent (population in the 1990s grew at an annual rate of about 1 percent). Merchandise exports had quintupled over the same time period, surpassing $100 million in 1805. Imports had grown even more rapidly. Gross tonnage moving across the seas on American vessels had doubled. Perhaps most revealing, during the years from 1803 to 1807, an average of eighty patents were issued for new inventions annually, four times the rate from 1790 to 1794.17
What Cadwallader Colden, Christopher Colles, Gouverneur Morris, Elkanah Watson, and Jesse Hawley had foreseen was just beginning to come true. More than dreams would be involved from this point forward: the need was real. In New York, serious business was stirring.
The legislature of New York State lost no time in reacting to Jefferson’s seductive words to Congress and the arguments and evidence presented in Gallatin’s powerful analysis of the crucial role of canals and public roads. On February 4, 1808, even before Gallatin’s report had made its appearance, Joshua Forman, an assemblyman from Onondaga County,* introduced a resolution beginning with these phrases: “Whereas, the President of the United States, by his message to Congress…did recommend, that the surplus moneys in the treasury…be appropriated to the great national objects of opening canals…. And whereas, the state of New-York, holding the first commercial rank in the United States, possesses within herself the best route of communication between the Atlantic and western waters….”
