One amendment excepted the Main and Hamburg canal, in the city of Buffalo, from the Constitutional inhibition against the sale of the canals of the State. This amendment was finally favorably reported and adopted, and thereafter the Main and Hamburg canal in the city of Buffalo was deeded by the State to the city of Buffalo and closed up. For several years prior thereto it had ceased to be operated as a canal and had been a menace to the health of the people in the vicinity. It had been repeatedly condemned by the local and State boards of health as a public nuisance.

In the convention of 1894 little consideration was given to the financial policy of the State in formulating the canal article. The existing fiscal provisions of the Constitution had been largely formulated by the convention of 1846 and in some respects had been amended in 1874 and in 1882 and 1883, and did not then appear to require radical amendment except as proposed in the new section 10 of article 7 of the Constitution.

The evolution of the fiscal policy of the State in relation to public improvements was briefly as follows: During the legislative session of 1838, Assemblyman Chas. B. Ruggles of the Committee of Ways and Means made a comprehensive report to the Legislature proposing an outline of a new fiscal policy with reference to carrying forward internal improvements by borrowing "such moneys as are needed for prosecuting most vigilantly its [the State's] public works and in lieu of appropriating the revenue only of the present canals for the purpose of making such expenditures as the interests of our citizens require and that the State should retain that revenue as a sinking fund to pay the interest of all moneys it may borrow from time to time to prosecute and perfect a liberal system of internal improvement." This plan was adopted by the Legislature and the Commissioners of the Canal Fund were directed to borrow four millions of dollars, which were appropriated towards the enlargement of the Erie canal; the interest until otherwise directed, to be paid out of the canal revenue.1

1. See Chap. 269, Laws of 1838.

This policy prevailed until the enactment of Chapter 114 of the Laws of 1842, "to provide for paying the public debt and preserving the credit of the State," and a tax of one mill on a dollar of the assessable property of the State was thereby imposed. The act also provided for temporary loans to pay arrearages due contractors and for preserving the unfinished work; and expenditures on the canals were to cease, except as they might be required to complete unfinished jobs and secure the navigation of the canals, and was denominated "the Stop Act." Prior to 1838 the financial policy was to apply the surplus canal revenues to the prosecution of canal enlargement as fast as the funds thus applied were available.

The provisions of Chapter 269 of the Laws of 1838 inaugurated a new policy whereby the revenues were to be applied to the payment of interest and the extinguishment of principal of moneys, which were authorized to be borrowed and for that purpose sinking funds were created.

This is a summary of the principal statutory provisions relating to canals as they existed at the time of the Constitutional Convention of 1846. In that convention, the Hon. Michael Hoffman of Herkimer county, chairman of the committee on finance, submitted two reports. In the first of these reports was proposed a new article, consisting of seven sections in relation to "the existing debts and liabilities of the State and to provide for the payment thereof," and in the second report was proposed another new article, consisting of seven sections in relation to "the power to create future State debts and liabilities, and in restraint thereof."

This was the earliest effort that had been made to embody in the Constitution itself a financial scheme, and it gave rise to a long and spirited debate which was participated in by Genl. James Tallmadge, Charles P. Kirkland, Horatio J. Stow, Samuel J. Tilden, Charles O'Connor, Alvah Worden, Lemuel Stetson, Richard P. Marvin, John Leslie Russell and others. This discussion was able and as animated as that which had engaged the House of Commons over the

See Chap. 78, Laws of 1844.

I.

2.

See 2 Docs. of Convention of 1846, Nos. 64 and 65.

government measure introduced by Sir Robert Peel for the repeal of the Corn Laws, and passed a few days prior to the opening of the convention. Both discussions involved the consideration of important economic questions and were conducted on the plane of broad statesmanship.

Some of the sections, as originally proposed by the committee on finance, after mature consideration were amended, with the consent of Mr. Hoffman, upon whom the burden largely rested of carrying the proposed amendments through the convention, and they together formed the new Article VII of the Constitution of 1846.

The Court of Appeals, in the case of Newell against the People, had considered in extenso the several sections of article 7 of the Constitution as formulated by the convention of 1846, which declared the policy and procedure for the creation and liquidation of canal debts and the purposes to which canal revenues were to be applied. The Constitutional convention of 1867 also considered the matter at great length and made some recommendations, all of which were disapproved by the people at the general election at which they were submitted for ratification.

The Constitutional Commission of 1872 and 1873 proposed amendments to certain sections of article 7 of the Constitution and some of these were approved at the general election in 1874. Other sections of the canal article were amended in 1882 and 1883.

The paramount canal question in the convention of 1894 was not so much one of finance as it was one of policy which the State would thereafter pursue toward its artificial waterways. Theretofore the administration had been unsettled, the appropriations uncertain, and no well-defined policy had been determined upon. Canal improvement had theretofore gone on at "a sluggish rate," it was said. The time had now come when it must be decided whether or not canal improvement should go forward and the Constitution be amended to permit that to be done, or whether the canal system should be suffered to fall into decay and eventually

1. Reported in 7 N. Y. pp. 9-140.

J

abandoned. Notwithstanding the occasional annual appropriations and enlargement of some locks, there was no question in the minds of those familiar with existing conditions but that the system was retrograding rather than being advanced, and it would only require a short time to complete the abandonment. Accordingly canal advocates in the convention of 1894 addressed themselves to the importance of the canal system to the State and the necessity of making provision for radical improvement by so amending the Constitution as to permit the Legislature to determine the character of the improvement and to provide under the existing constitutional sections for raising the necessary funds for that purpose.

Various phases of the canal question were considered in the Constitutional Convention of 1894. Long and cogent arguments were made by such able men as Hon. George Clinton and others, before the Canal Committee of that convention, of which Judge J. Rider Cady of Hudson was chairman. The debates in the convention were spirited and reflected the sentiment of the people throughout the State on this important matter which had engrossed the public attention for nearly a century. In the Revised Record of the Constitutional Convention of 1894 may be found the debates which occurred on the various proposed amendments during the sessions of that body.

All the amendments originally proposed to the Canal Article of the Constitution, except that relating to the sale of the Main and Hamburg canal of the city of Buffalo, were either unreported or voted down during the evening session held on September 10, 1894. On the following morning, at a conference of the Republican members of the convention, held in the Assembly Parlor, I secured a caucus rule to the effect that all adverse action theretofore had in the convention, be reconsidered and the whole matter of canal improvement be again committed to the committee on canals. Accordingly, Judge Cady, chairman of the canal committee, on the morning of September 11th, rose in the convention and stated:

"Mr. President-In the hope that after the experience of yesterday some resolution of the much debated canal improvement question may be arrived at that will be satisfactory to a majority of this convention, I move that the vote of this convention taken last evening, by which the report of the committee of the whole on the canal amendments was disagreed, be reconsidered."

The President put the question on the motion of Mr. Cady and it was determined in the affirmative. Thereupon all the proposed amendments were referred back to the canal committee.1

It was apparent that canal advocates in various parts of the State who had entertained diverse opinions with reference to what ought to be done in furtherance of canal improvement must harmonize their views and agree upon a common plan of action. There were those who theretofore insisted on inserting in the Constitution itself an appropriation of from eighteen to twenty million dollars for canal improvement. Others had contended that the Constitution ought to be so amended as to enable the Legislature to make whatever appropriations it might find necessary to carry forward canal improvement as should thereafter be determined. This latter view was finally embodied in a proposed amendment, agreed upon by Judge Cady, Judge Chester B. McLaughlin, who was a delegate from the Twenty-first Senatorial district, and myself, after a conference with some of the leading canal advocates of the State, including Capt. William E. Cleary, Daniel A. Cooney and others and it is now Section 10 of Article 7 of the Revised Constitution of 1894, and reads as follows:

"The canals may be improved in such manner as the Legislature shall provide by law. A debt may be authorized for that purpose in the mode prescribed by Section 4 of this article, or the cost of such improvement may be defrayed by the appropriation of funds from the State treasury or by equitable annual tax."

This amendment gave rise to further debate, but was finally adopted by the affirmative vote of 89 members, one

1. Vol. iv, Revised Record of the Constitutional Convention of 1894, p. 355.