$133,555,049.03 paid into the State treasury for canal tolls and water privileges. It is also estimated that there have been contributed by canals to merchants, warehousemen and forwarders in commissions and storage upwards of $110,000,000. By adding $133,555,049.03, received by the State for tolls and water privileges, to the sum of $225,000,000, received by boatmen for freights, and to these the other sum of $110,000,000, received by merchants, warehousemen and forwarders, we get the grand total of more than $468,555,049.03, which has been contributed by the vast tonnage of commerce to the wealth of the State of New York, at an expense to the taxpayers of only $60,283,693.14, a part of which has been refunded.

The vast revenue so received has not found its way into the pockets of foreign bondholders, but has been expended by the State and boatmen and other persons identified with canal transportation wholly within the State. Commerce has thus paid tribute to the enterprise of New York and yearly adds millions of dollars to its wealth.

The annual cash receipts from tolls and freights on the canals for many years exceeded the entire State taxes. levied for all purposes, as may be seen from the following statement: The State taxes for 1859 were $3,512,284; canal tolls and freights for 1859 were $3,665,806; the State taxes for 1860 were $5,440,640; canal tolls and freights for 1860 were $8,049,450; the State taxes for 1861 were $5,586,848; canal tolls and freights for 1861 were $9,369,378; the State taxes for 1862 were $6,884,193; canal taxes and freights for 1862 were $10,780,431; the State taxes for 1863 were $7,272,274; canal tolls and freights for 1863 were $9,065,005; the State taxes for 1864 were $7,880,249; canal tolls and freights for 1864 were $10,939,609. A similar condition existed for some time prior to 1859 and subsequent to 1864. It may be safely stated that for fully half the time since the completion of our canals the revenue in tolls and freights derived annually therefrom has exceeded the annual cost of the State government. Noiselessly have flowed on these rivers of gold, enriching near and far all parts of the State.

Among the evidences of this are the flourishing cities that have sprung up along with the development of this inland commerce. New York, Brooklyn, Albany, Troy, Utica, Syracuse, Rochester and Buffalo, in commercial affairs not inferior to the maritime cities of Southern Europe, and unrivalled by the cities of any other State in the Union, accentuate the wisdom of the policy which conceived and dominated the construction of the State's artificial waterways, and thus laid the foundation for her commercial supremacy. They speak in no uncertain language of prosperity attained as a result of canal transportation. They have become absorbing centers of the agricultural products of the State, and have made it possible for the rural counties to attain a degree of thrift and prosperity unsurpassed by those of any other State. Every village and hamlet in this great State feels the pulsation of industrial life that throbs in these great centers. Whatever tends to advance the interests of the latter promotes the welfare of the former, and no one thing is so likely to advance such interests as the increase of the commerce of our inland waterways.

These superb cities, with their humming factories, spacious warehouses, wealthy banks, large libraries, comfortable houses and palatial residences, are the pride of the people of the State and contribute much to its imperial greatness. They comprise more than one-half of our population and their vast industries furnish employment for thousands of persons who otherwise would be unable to secure employment in this State. The larger and wealthier they become, the greater will be their demands upon the products of the rural counties and the greater will be the proportion of the State taxes which they will be required to pay. Erie, Kings and New York counties now pay sixty-two per cent. of the State taxes. These three counties, together with Albany, Rensselaer, Oneida, Onondaga and Monroe counties, pay about three-fourths of the State taxes. The thirty-one counties touched by canal transportation pay about eighty-seven per cent. of the State taxes, while the other twenty-nine rural counties pay but thirteen per cent. thereof.

Several of these latter counties are receiving from the State more money, as school funds, than they are paying for all purposes into the State treasury. To illustrate, the county of St. Lawrence contributed toward the expenses of the State government for fifteen years, commencing with 1863 and ending with 1877, the sum of $268,968.97; and St. Lawrence county received from the State treasury for the same period for the maintenance of its public schools the gross sum of $807,670.68.

Delaware county for the same period contributed toward the expenses of the State government the sum of $143,837.14, and Delaware county for the same period received for the maintenance of its schools the gross sum of $461,904.63. Other similar instances might be given. For the same period of time New York City contributed to the State treasury $9,019,045.64 more than it received from the State treasury. It thus appears that some counties in times past have drawn out of the State treasury for school purposes alone three times as much as they contribute for all purposes into the State treasury.

The amount of money so received by twelve of such counties in excess of the total taxes paid by them to the State for all purposes in 1894, is $59,940. 16. Thus it would appear that the rural counties can ill afford to oppose canal improvement, which is of such vast importance to the commercial interests of the State, and which is being advocated by the principal taxpaying counties of the State. It does not seem possible that our people can fail to comprehend the import of the movement, going on the world over, to bring all lands in touch with water transportation. After the canals have more than paid for themselves in tolls to the State, and after the people of the State have received upwards of $225,000,000 in freights in addition to the tolls received by the State, and in addition to the $110,000,000 received by forwarders, commission merchants and warehousemen, and after our unparalleled industrial and commercial development, which has resulted largely from our inland water transportation, it would seem as though every citizen in the State of New York now understood the in

estimable benefits that have been received by all the people from our vast system of artificial waterways. No county is so distant from these great arteries of commerce but that it is benefited thereby. The merchandise it consumes is cheaper, and the products it sells are more valuable than they would be otherwise, were it not for the minimizing of rates of transportation between such county and the metropolis.

The canals are a further advantage to all the persons within the borders of the State by their regulation of railroad charges throughout its limits. This fact was very clearly stated by Mr. George R. Blanchard, vice-president of the Erie railroad, in his testimony before the Hepburn railroad investigating committee, in 1879. He said:

"The State holds within its grasp the great controller of the freight rates within its border, to wit, the canal. There is not a town that is not affected more or less within the whole State, from the extreme northwest to the extreme southwest corner of it, by the canal policy and rates of this State. Every rate we make to or from Buffalo in competition with the Erie canal has more or less influence to every point this side of Buffalo.

"I might use an illustration; upon the west end of our line, for instance, is Salamanca, upon the Dunkirk division. The rate to that point is limited by the canal rates and the rates upon Lake Erie to Dunkirk, plus the railroad rates back to Salamanca, which is not upon the line of the canal; it is remote from it; it is upon the southern border, but we are limited to the lower of the rates I have cited. Still further, if the canal makes a rate to Buffalo, and if we make a rate to Buffalo to compete with the canal, the rate only being three cents per one hundred pounds more to stations on our western division, by the tariff I have submitted, than to Buffalo, the rate immediately falls down to within three cents of the Buffalo rate which is made by the canal, and in this way the canal influences our rates where it does not limit them."

The State Railroad Commission, in its report of 1885, says that, "No better illustration is possible of the wisdom upon the part of the State of maintaining in efficient condition its waterways." The board has taken occasion in each of its annual reports to comment upon this subject, and

again repeats what it said in its second annual report (page 12), the following language:

"Water competition is acknowledged by railroad managers to be the only competition that is uniform and effective in fixing rates of transportation for the commerce of the country. The canal system of this State regulates the carrying price over and through the State. Therefore, whatever may be said for or against railroads competing with each other, there can be no doubt but that it is of vital interest to the people of the State to jealously guard our great waterways, which by a constitutional amendment have been made forever free.”

The United States Senate committee, consisting of Senators Windom, Sherman, Conkling and Davis, appointed to examine into transportation, in the course of which they visited and inspected the Erie canal, say that—

"The chief instrumentalities by means of which those (competitive) forces will exert their power are the Mississippi river on the one side, and the northern water routes (comprising Great Lakes and Erie canal) on the other. Both routes constitute indispensable parts of one grand system. Each is needed to regulate the other, and both are regulators of railway charges. Each has some advantages which the other lacks, and some impediment which the other has not; but on the whole their trade forces, commercial facilities and economic capacity for cheap transportation will be so evenly balanced as to insure a healthy, active and permanent competition. But the competitive power and influence of two great contestants (the water and railroad lines) will not be limited to any one locality, but will extend to nearly every State in the Union, and will hold in check and regulate the charges on every railroad from the interior to the seaboard. The wide sweep of competitive influences exerted by the Erie canal is not generally understood or appreciated. You would doubtless be surprised, Mr. President, if I told you the 'little ditch' which runs through your State holds in check and regulates nearly every leading railroad east of the Mississippi river, and that it exerts a marked influence on the cost of transportation over all the country, extending from the interior of the Gulf States to the St. Lawrence river, and from the great plains to the eastern foothills of the Rocky mountains to the Atlantic ocean. And yet such is the fact."