On the 24th of October, SAMUEL B. RUG-| GLES, Esq., of this city, addressed to a committee of gentlemen residing in Rochester, an able letter in vindication of the policy that has been pursued in the construction of canals in this state, from the time of Clinton to the present period. Being too long for publication in the Review, we shall endeavor to furnish, in a condensed form, all its important facts and conclusions.

The great subject of his letter is introduced by asking three questions: "What is the present state of the Erie Canal enlargement? What has brought it to its present condition? What are its prospects?" The three questions, though distinct, he examines together. He first gives a graphic sketch of the three political parties at present existing in the state. The Whigs, he says, consist mainly of those, and the descendants of those, who supported CLINTON in the great work of the Erie Canal; -they are those who advocate, as part of their creed, improvements of the interior as well as of the sea-board, and who believe that the commerce of rivers, and canals, and lakes, are as important to national interests as that of the

ocean.

Opposed to this party is that of those who call themselves Democrats. This last is divided into two sections, one of which is wholly averse to every kind of internal improvements at the expense of the state, and is known by the terrible name of "BARNBURNERS," the most prominent leader of which is Col. SAMUEL YOUNG, aided by Mr. MICHAEL HOFFMAN, and Mr. FLAGG, the late Comptroller.

Midway between this wing of the Democracy and the Whig party, is that portion who enjoy the comfortable title of "OLD HUNKERS;" and it is their creed that public works ought to be "judiciously" prosecuted-provided they themselves can fill the offices of honor or profit connected with the administration. The most eminent leader of this school is Governor MARCY.

The present generation, enjoying as it does the daily benefits of the Erie Canal, can hardly realize the difficulties which its projectors were obliged to encounter. Forty years ago, when the plan was first announced of constructing a canal from the Hudson River to Lake Erie, the idea was treated as purely

VOL. IV. NO. VI. NEW SERIES.

chimerical, and this was more especially true in the city of New York, among its merchants and capitalists. After an eight years' struggle, on the 15th of April, 1817, the law authorizing the Canal passed through the Legislature. The whole delegation of the City of New York voted against it.

It was during these contests that the political parties which even now agitate the State, found their origin and early organization. Mr. SILAS WRIGHT, since elected Governor, and Mr. AZARIAH C. FLAGG, the late Comptroller, came into public life about that time, the active opponents of Mr. CLINTON.

In 1823 Mr. CLINTON retired from the office of Governor; from the year 1810, when the first explorations and surveys were made, to the year 1823, he had held the honorary post of Canal Commissioner, without salary or emolument. In 1824, the great work was near its completion. His adversaries, having a majority in both branches of the Legislature, passed a joint resolution, supported by Mr. WRIGHT in the Senate, and Mr. FLAGG in the Assembly, removing him from that post, which he had so long and so ably filled.

The whole community was shocked at this cold-blooded, intentional insult to a great public benefactor. Mr. CLINTON was at once put in nomination for re-election as Governor the approaching autumn, and he swept Colonel YOUNG, the opposing candidate, from the field by an immense majority.

In the large views of Mr. CLInton, however valuable the Erie Canal might be, as the main commercial artery of the State, it needed the contributions of lateral canals, branching off into the more interior recesses of the country. He, therefore, recommended successive additions to the system, which should connect Lake Ontario and the Black River, the Cayuga and Seneca Lakes, and the fertile regions of the Genesee, the Susquehanna and the Allegany, with the great trunk traversing the State.

This was the origin of the lateral canals. From the moment of their construction they have been the theme of the most malignant abuse which party could devise. Disregarding their palpable effects in swelling the revenues of the main line and the general commerce of the State, their tolls have always

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been studiously kept separate from those of the Erie Canal, and the expense of maintaining them in repair, is paraded by their opponents as a perpetual burthen upon the treasury of the State.

In 1827, Mr. WRIGHT, being still in the State Senate, in an elaborate Financial Report made war upon the whole Canal system, declaring that the actual income of the canals was highly exaggerated, and that any appropriations for other works, unless they should be more profitable than the Erie and Champlain Canals, "would hasten the period when direct taxation must be resorted to." The formula thus furnished by Mr. WRIGHT, has been faithfully repeated by the disciples of his political school ever since. But the fact has not verified the prediction. The Canal paid off its debt nine years after the Report, in July, 1836.

On the death of Mr. CLINTON, in the year 1828, the political power of the State passed, almost without opposition, into the hands of his late opponents, and Mr. WRIGHT became Comptroller, and in due course of time was succeeded by Mr. FLAGG. The manner in which the accounts are kept in the Comptroller's office, makes two distinct Funds,-The Canal Fund and the General Fund. The Canal Fund may be full to overflowing, but if the General Fund is low, there is a cry of an exhausted Treasury. The State may own the Canals, as it owns any other kind of property; and when the loans are cancelled which had been made to construct them, the liens held by lenders cease, and the revenues of the Canals may be applied to the general purposes of the State. When a tax, therefore, is recommended "to replenish the General Fund," it simply means a tax to pay off so much of the Canal debt. During the progress of the Erie Canal and before its revenues had been ascertained, the people paid a tax for its support, but in 1846 it was no longer necessary, and it was discontinued. In pursuance, however, of the policy which dictated his Report of 1827, Mr. WRIGHT, in 1830, as Comptroller, recommended the Legislature to levy once more a direct tax. The proposition was not adopted. It was repeated by him the next year, with the same bad success. In 1834 Mr. FLAGG became Comptroller, and until 1839, continued the system commenced by Mr. WRIGHT of urging the Legislature to impose a tax "to replenish the General Fund." In 1836, the revenues having accumulated to an amount sufficient to pay off the whole of the debt of the Erie and Champlain Canal, the Legislature virtually settled the matter by enacting that $400,000 should annually be taken from the Canal Fund and paid to the General Fund. In addition to this sum, an annual amount of about $310,000 was also received into the same Fund, from the auction and salt duties.

Nevertheless, on the opening of the Legislative Session of 1838, Mr. FLAGG again renewed his recommendation of a direct tax.

The subject was referred to a Committee of Ways and Means, of which Mr. RUGGLES was Chairman, and they resolved at once, as their predecessors had done for many years, that the tax was neither necessary nor expedient. They, however, instituted an inquiry as to what would be the fiscal effect of proceeding with more expedition in enlarging the Erie Canal; and to solve this, they endeavored to determine what would probably be its future re

venues.

In conducting the inquiry, the Committee considered the report made to the Assembly, a few days previously, by Mr. Bouck and his colleagues, Canal Commissioners, which predicted that in a few years after the completion of the enlargement, the tolls, being at the present rates, would exceed three millions of dollars annually. They added that they "believed the public interest would be essentially promoted by as speedy a completion of the enlargement of the Erie Canal as the facilities for obtaining means, &c., will justify." Thirteen years before this period, the Canal Commissioners, among whom were Colonel YOUNG and Mr. Bouck, declared that their anticipations as to the tolls "had uniformly fallen short of the reality," and they added, that "they had no doubt but the same fate awaited their present calculations." They then proceeded to estimate the prospective increase of tolls for the thirty years then next succeeding. The following is the result:-$1,000,000 for the year 1836; $2,000,000 for the year 1846; and $4,000,000 for the year 1856. The tolls, though materially reduced in rates, amounted, in reality, to $1,614,342, in 1836, and to $2,756,106, in 1846. At the same time, the Canal Commissioners predicted that within fifty years, nine-tenths of the merchandize transported upon the Canal, will pay toll, if it is chargeable, for the use of the whole length of the line. They then estimated the "annual receipt of tolls at nine millions and thirty one thousand and one hundred and seventy-six dollars."

The Report of 1838, was made in all honesty of purpose, and without indulging in any idle dreams of the imagination, but it has been made the standing subject for party ridicule and assault down to the present time.

The estimate of the Report of 1838 was, that if the Erie Canal should be enlarged, its tolls would reach the sum of $3,000,000 at the close of navigation in the year 1849. The Canal has not been enlarged, and its rates of toll have been reduced, and yet the tolls of the year 1848 were $3,252,212, and of the preceding year, (which was one of unusual activity,) $3,635,381. If, to the tolls of 1848, be added ten per cent. for reduction in the

$3,577,433.

In this amount are included the tolls of the lateral canals, the receipts of which, as kept separately, are about equivalent to their cost of maintenance. After making the proper allowance for the actual expense of repairs on the Erie Canal, the net revenue is $3,000,000 as predicted.

expenditure on any particular work whatever. They stated that if a debt of $40,000,000 should be incurred for public works, the money might be "safely borrowed, without imposing any burthens upon the people; and that if the views of the Canal Commissioners, as to the future revenues of the Canals, are correct, the whole amount, within thirty years, may be reimbursed and added to the productive property of the State."

In 1838 the Barnburners and Hunkers com

In the annual message of Governor MARCY, of that year, he expressly recommended to the Legislature the expediency of making more rapid progress in enlarging the Canal than it was possible to do with the surplus tolls alone. Mr. Bouck and the other Canal Commissioners substantially recommended the same thing. This implied, necessarily, either borrowing money or direct taxation. Even Mr. FLAGG would not have recommended the latter method. The Committee then had only to show that an annual revenue of $3,000,000 would be sufficient to pay the interest, at five per cent. on a debt of thirty millions, and reimburse the principal in less than twenty years, or on a debt of forty millions and reimburse it in twenty-eight years. The soundness of this portion of the Report was not questioned until two or three years after it was made. The attacks were made upon what were called its "fancies" and "visionary" character. But the fancies have become facts. Is not our debt at this very moment in process of rapid extinction by means of these very revenues? And is not the much lauded financial provision of the Constitution of 1846, founded on the assumption of the adequacy of these revenues?

Two years previous to 1838, the State had passed laws for constructing the Genesee Valley and Black River Canals, at an expense of at least $5,000,000, and for enlarging the Erie Canal at a cost which Mr. BoUCK and his colleagues had estimated at $12,416,150, but which, for greater caution, the Committee raised to $ 15,000,000. The Canal Engineers had also reported most favorably of the enlargement. The surplus tolls, at that time, amounted to a little less than $800,000 annually. Should they not increase faster than was then admitted by Mr. FLAGG and others, the time required for the enlargement would not be less than fifteen years, even if its cost should not exceed $15,000,000. At a cost of $25,000,000, the work could not be accomplished in less than twenty-five years at least. To save interest, therefore, the Committee recommended a resort to loans. With this sin

Report was favorably received by that body. An Assembly bill, authorizing a loan of $1,000,000 for expediting the enlargement, was actually amended in the Senate to $4,000,000, and in that shape it became a law. This law seemed to produce universal satisfaction throughout the State. The Canal Commissioners, in consequence of their scanty means, up to that time had been only able to put under contract a few scattered structures; but they were now enabled to operate with much more efficiency. Many aqueducts and locks had become decayed, and the safety of navigation rendered it desirable to rebuild them, and that of enlarged size. The three great aqueducts-two across the Mohawk and one at Rochester-were in a failing condition, and the expense of rebuilding them alone was nearly $1,000,000. The twenty-nine locks between Albany and Schenectady, when built, had been so clustered together as to cause most injurious delays in navigation; and the scanty supply of water afforded to the canal at Lockport rendering it necessary frequently to take from the manufacturing city of Rochester, the water from the Genesee river which was essential to the industry of its inhabitants, were evils which it was important to remedy with as little delay as possible. The work put under contract in the season of 1838, was directed chiefly to these points and purposes. The great effort was to relieve navigation of its most pressing embarrassments. The total cost of the works thus commenced under the law of 1838, including all that had been previously commenced, did not exceed $11,000,000.

At the opening of the Session of the Legislature of 1839, the war on the policy of 1838 was fairly commenced. Governor SEWARD, the first Whig successor of DE WITT CLINTON, came into office the firm supporter of that policy, while Mr. FLAGG, in his Annual Report, used his best efforts to show that the calculations of the Committee of Ways and Means of 1838 were conjectural and fallacious,-that the treasury could not safely rely on the rate of progress in the canal tolls which their estimate had assumed. Mr. GULIAN C. VERPLANCK, a gentleman of eminently conservative character, contended that the results predicted would be realized, and would warrant