REAL. ESTATE
AND
f
NEW YORK, MAY 30, 1914
â– lllllilllH
CANAL TERMINAL PROBLEM IN NEW LIGHT
â–
â–
â–
Statistics Show That Cost of Project Overbalances Results Obtained
—Only One Per Cent, of Erie Canal Tonnage Reaches New York City
By W. R. MESSENGER
.â– llllilllllillllllllillilll
IllllllJllilllllillliiliilll
THE many property owners' and tax¬
payers' associations fighting for
lower taxes might profitably investigate
the subject of barge canal terminals,
authorized by Chapter 746 of the 1911
laws of the State of New York, which
provides for an expenditure of $19,800,-
OOO. The necessary funds are to be
raised by the issue of thirty-year 4 per
cent, tax exempt bonds, and the interest
and principal of these bonds â– must be
met by a direct tax "on each dollar of
valuation of real and personal property
in this State, subject to taxation." New
York City pays about 75 per cent, of the
More than $100,000,000 has been ex¬
pended for recent improvements on the
Erie Canal system. At 5 per cent., the
annual interest charges would amount to
$5,000,000. The present total annual
freight tonnage on the entire Erie Canal
system is only about 3,000,000 tons. In
other words, it costs the taxpayers more
than $1 a ton for every ton of freight
at present carried on the Erie Canal.
Tidewater Tonnage.
Only about 20 per cent, or 25 per cent,
of the total present annual tonnage of
the canal reaches tidewater, so that if
all the tonnage reaching tidewater came
to New York City it would not exceed
about 600,000 tons annually. In fact, the
total tonnage from the Erie Canal which
reaches New York City is less than one
per cent, of the tonnage handled in New
York Harbor. Still, it is proposed that
the State spend about $10,000,000 for
canal terminals in New "York City. If
improvements were made on the same
basis to care for the other 99 per cent..
New York would need to spend $990,-
000,000, and there is just as much indi¬
cation of increased traffic resulting from
the Panama Canal and the Cape Cod
improvement, and increased trade gen¬
erally, as there is increase from the Erie
Canal.
Erie Canal Barges.
An average of two barges per day
would carry the total present tonnage,
which reaches New York from the Erie
Canal. There is at present four times
the tonnage entering the Harlem River
Ship Canal at Spuyten Duyvil than
reaches New York from the Erie Canal.
The $10,000,000 worth of terminals at
New York would mean $500,000 annual
interest charges for taxpayers to meet.
That would be about $1 for terminal
do<:k facilities for each ton of freight
which at present reaches New York from
the Erie Canal. It has been represented
that large facilities are required at Buf¬
falo for the Lake shipments entering the
canal. The fact is that the tonnage en¬
tering the canal from the Lakes is less
than one per cent of the total tonnage
handled at the Buffalo harbor. An aver¬
age of one barge per day would carry
all the freight that enters the canal from
the Lakes. More than half of the total
annual tonnage of the Erie Canal is at
points along the line of the canal itself,
which never reaches the Lakes or the
Hudson.
In view of these facts, it is wise to
examine the law which permits but doe§
not make mandatory the expenditure of
$1"9,800,000 for terminals. It is note¬
worthy that the law provides for the
construction of the terminals, but ap¬
parently makes no provision for the
operation of the terminals, and ap¬
parently no provision for obtaining
any revenue from the terminals if
they are operated. The law does state
that "the terminals provided for in this
act when constructed shall be and re¬
main the property of the State, and all
of said terminals, including docks, dams,
bridges and machinery, shall be operated
by it, and shall remain under its man¬
agement and control forever. None of
such terminals or any part of such ter-
rtiinal shall be sold, leased, or otherwise
disposed of, nor shall they be neglected
or allowed to fall into decay or disuse,
but they shall be maintained for, and
they shall not for any purpose whatever
be in any manner or degree diverted
from, the uses for which they are by this
act created."
Superintendent's Problem.
The Superintendent of Public Works
is given authority to enforce the rules
and regulations of the terminal act. How
he is going to prevent decay, or prevent
any terminal from falling into disuse, is
not explained. Eight or ten different
locations are specified for the construc¬
tion of terminals in Manhattan alone.
The whole subject of the operation of
the terminals, after they are constructed,
seems to be one which the law makes
ambiguous, and regarding which there
seems to be no unanimity of opinion.
The State Commission, created by
Chapter 9 of the New York State Laws
of 1912, on barge canal operation, in
its report transmitted to the Legisla¬
ture, January 20, 1913, said: "It is in¬
conceivable to the members of the Com¬
mission that any fair-minded person,
after giving consideration to the prob¬
lem, can claim that terminal facilities,
including human and machine labor, was
intended to be furnished free by the
State, or that there was an intent, even
in the interest of commerce, either con¬
veyed in the provisions of the act or con¬
tained in the minds of those who fur¬
thered the legislation, that the State
should furnish any service or the use
of any equipment beyond the waterways
themselves free to commerce. Neither
does it believe that commerce is in need
of such wholesale _ subsidy, as such a
policy would entail. The advantages
which water shipments possess over rail
shipments are too numerous and too
well known to render it necessary that
the State should go further on the road
to paternalism than it went when the
sy«tem of tolls on- the waterways was
abolished."
Fee Recommended.
This commission also, in its report,
recommends that a terminal fee be
charged on the basis of commodity ton¬
nage, "sufficient to cover the cost to
the State for the services furnished and
the cost of maintenance, eliminating,
however, original capitalization in cost
pf construction."
^Evidently anticipating that this sub¬
sidy may be insufficient, the commission
on barge canal operation also states in
the report: "Undoubtedly, ultimately
individuals and corporations owning
water frontage or property adjoining
water frontage will develop such prop¬
erty by the construction of private docks
supplied with terminal equipment. The
statute should be so amended as to give
the Superintendent of Public Works and
the Canal Board jurisdiction over such
private docks and terminal equipment, to
the extent that it may be necessary, in
order that the, utilization of such private
docks or terminal facilities would not
be a menace to the State's terminals."
State's Monopoly.
Thus, if the State terminals were un¬
favorably located, or developments ren¬
dered them unfavorably located, or their
equipment was defective, or administra¬
tion inefficient, still the State could main¬
tain a practical monopoly against pos¬
sibly even the open municipal docks of
the city itself.
It should also be noted that the City
of New York has no authority regard¬
ing the location of the terminals at this
port, except in such cases as the city
may cede the land to the State, and
then the State has sole right to the
management, regulation, construction
and maintenance thereof. Although the
terminal act specifies exact locations for
terminals in New York City, it also
provides that "the â– Canal Board, upon
the recommendation of the State Engi¬
neer, may modify, redesign or change
any of the structures or terminals, or
relocate the same within any of the
cities, villages or towns specified in this
act." Thus New York City has no
authority in the location of terminals
except in such cases as the city may
own the land, and then it must be ceded
to the State.
Lone Provision of Law.
The law specifies that at one terminal
in Manhattan, "necessary dredging or
excavation shall be made to provide a
depth of 35 feet of water at low tide."
Obviously this is intended to provide
for ocean steamers. Similar provision
is made for a depth of 23 feet at Buffalo
to accommodate the largest lake vessels.
Thus the State would be engaged in
lake and ocean terminals, as well as
canal terminals. Although providing for
the construction of a terminal with 35-
foot water depth at New York, the law
apparently prevents its use, for it ex¬
pressly states, "Nothing in this act shall
forbid the use of the water adjacent to
any terminal, or the use of a terminal
for a landing place for pleasure craft or
barges carrying general merchandise,
whose navigation is confined to the Hud¬
son River and the waters of New York
Harbor, under such rules and regulations
as may be prescribed by the Canal
Board."
No mention is made of ocean or coast¬
wise traffic.
The act also specifies that a large and
commodious barge canal traffic terminal
may be provided at Jamaica Bay, but at
the end it stipulates that no funds under
th$ present act may be used for such