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Real estate record and builders' guide: [v. 93, no. 2411: Articles]: May 30, 1914

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REAL. ESTATE AND f NEW YORK, MAY 30, 1914 ■lllllilllH CANAL TERMINAL PROBLEM IN NEW LIGHT ■ ■ ■ 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 .■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 ■ 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 ■ 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