Introduction
As the United States entered the European War in 1917, it was found that the nation’s transportation facilities were not up to the task of mobilizing and supplying large quantities of materials and men to the east coast for shipment to the war front. What took place over the next three years was an experiment in the nationalization of the railroads, and to a much smaller extent, the waterways. I have tried to follow the chain of events that led to the take over of the New York Barge Canal and what happened after the War.
1917, The New Barge Canal, and The War
The year was 1917 and New York State found itself with a rather big problem. After fourteen years of planning, engineering and construction, the new Barge Canal was almost ready for use. Although terminal space was still being built, and plans were to have the entire canal channel and locks ready for use in the spring of 1918, there were few boats available for use on the canal. And there were many reasons for this;
- The older wooden boats which had been used for years on the Enlarged Canal, were at best able to carry 250 tons, whereas the new canal was built to have boats of 2000 tons.
- Boats operating on the new canal had to either be towed, or have a means of propulsion. Many family operated boats from the old Erie Canal simply didn’t have the means to purchase and operate a tug or powered barge.
- It had taken years to build the new canal, and much of the new canal followed a new and different route across parts of the state. It had yet to be seen if shipping companies and industries would move to set up shop along the Barge Canal. The boat builders, the shippers, and the industry had taken a wait and see approach to use of the Barge Canal.
To put it as plain as one can, the State of New York had spent almost $150,000,000 dollars on the new canal, only to realize in a year before the grand opening, that few people and companies were ready or able to use it.
As the people in charge of the new canal looked at their new creation and saw few private companies ready to use it, they turned to the Federal Government for assistance. The reason they did this is because in the lead up to the War, the Federal Government, by way of the Department of Commerce under Secretary William Redfield, had begun to look at the readiness of the nation’s transportation resources. Redfield was from New York and was a waterways supporter. In 1916, he wrote, “Wherever it is possible to obtain direct transit by a steamboat on a waterway of sufficient size and depth for it to maintain speed the waterway provides at once the quickest and cheapest method of transit.” The Department created a Committee on Waterways, and it was a given that the men of New York would look to Secretary Redfield for help.
On August 24, 1916, the President of the United States created the Council of National Defense to ready the nation for war. A number of committees were created by this Council, one of which was another committee on waterways. So New York, under the direction of the Department of Public Works, asked the newly formed Council to tour the new Barge Canal to see if it could be of use in shipping. The group toured the State looking at the almost completed Barge Canal still under construction. It was clear to the Committee that the lack of boats and terminals was a major problem. Whitford states in his History of the Barge Canal that the report of the subcommittee appointed to study the canal was never made public and no action was taken.
While this was going on, in April 1917, the Emergency Fleet Corporation was created by the United States Shipping Board, which itself had been created by The Merchant Marine Act of 1916. The EFC was to acquire, maintain, and operate a fleet of merchant ships to meet the needs of the national defense, and the foreign and domestic commerce, during the war. On July 11, 1917, the President gave to the Emergency Fleet Corporation all his wartime power and authority to acquire all the existing vessels needed and to construct whatever additional vessels might be needed. The EFC also could operate all the vessels that had been acquired by the United States. (And here is the important part for our study here.) Legally, the EFC could not actually operate the ships unless no private companies could be found to do so. But again, no movement was made by the Federal Government to use the Barge Canal.
So on August 1, 1917, the canal men of the State held a New York State Canal Convention. At this gathering, they passed a resolution asking the New York State government to petition the Feds to take over transport on the Barge Canal. By the end of August 1917, Governor Whitman asked President Wilson to take charge. And in spite of all this, little happened at the Federal level.
However, the public and the press jumped on the Federal control bandwagon, with many articles stating that the Feds must take over the canal and predicting great benefits for the State and her people. “Let the Canal Help Win the War” was the headline in the Tonawanda Evening News of December 7, 1917. “How the Barge Canal Can Relive The Freight Tie-Up”, reported the Brooklyn Daily Star of December 21, 1917. This all pointed to one simple need; “Ask the U.S. To Build Barges”, reported the Ellicottville Post of January 7, 1918. Without boats, the new canal was useless, and few boats were available.
While all this agitation was taking place the EFC was working under its charter. But on December 26, 1917, the President took control of all the transportation facilities in the country and appointed his son-in-law William Gibbs McAdoo as head of the United States Railroad Administration. The reason for this step was a total break down of the railroad operations during the winter of 1917 when cars and entire trains loaded with supplies for the war front in Europe stacked up on the East Coast leaving few empty cars to load. With all the yards filled with cars, trains filled with coal could not make their way to the docks to load the ships that needed the coal as fuel in order to cross the ocean. And with the cars filled with coal waiting to be unloaded, there were few empties to send back to the mines. In short, the entire network of railroads came to a standstill. It was against this backdrop that the President exercised his war time power over the railroads.
1918, and the Federal Takeover of the Movement of Freight.
In February of 1918, McAdoo, head of the USRA, created the Inland Waterways Committee. The goal was to see if the waterways could be used to break up the railroad traffic jams. The Committee of Inland Water Transportation, which was working as a subcommittee to the Council of National Defense, was turned over in total to the Inland Waterways Committee of the USRA. The rumors about the Feds taking over the Barge Canal resurfaced.
During this changeover period, State Engineer Frank Williams, who had spent years working on the Barge Canal and was desperate to make it a success, testified before the EFC. On January 31, 1918, he touted the canal and what it could do for the war effort. And he again stressed the lack of boats and shippers as a major problem for the State and her people who had invested $150,000,000 in constructing the canal.
It is here that we must introduce George Ashley Tomlinson. Tomlinson was a self made Teddy Roosevelt type man, having gone to the west as a young man to find and prove himself and learn the value of a hard days work. He then bounced around a bit, working as a reporter, joining Buffalo Bill’s Wild West Show, and then returning to the newspaper business, finally becoming the Managing Editor of the Detroit Tribune. Encouraged by his father-in-law, he moved to Duluth and set to work to start a shipping business on the Lakes. By the time the US entered WW1, he had a fleet of twenty-six ships, and was a partner in many shipyards. He testified before the same Board that Engineer Williams was speaking to.
George Tomlinson took the exact opposite stand as Williams. He plainly stated that he, as a shipper and boat builder, would not use the canal if the Federal Government took control of the shipping and boat building. He stated that he had $3,000,000 of his own money ready to start the construction of 100 barges for use on the Erie Canal. He even stated that he had the steel all lined up. These barges would work with his line of Great Lakes steamers to move freight to and through the new canal. But, he cautioned, if the Federal Government was to run a line of barges on the canal, he would not.
What happened next was not recorded, but it appears from what Tomlinson said years later that he was almost immediately offered the job of Federal Manager of the Barge Canal, under the control of the USRA. He also stated later that he was made to see the need to have the Federal control over the canal. George Ashley Tomlinson was officially appointed by General Order #22 of the USRA, dated April 22, 1918, but it is clear from the records that he was serving on the Waterways Board months before this appointment.
Four days prior to April 22, McAdoo assumed control of shipping on the Barge Canal. It is one great misunderstandings of history that the Federal Government took over the Barge Canal. Even Richard Garrity in his memoir writes that the Federal government “operated and controlled” the Barge Canal. That was never the understanding that was worked out between the Federal government and the State. The Barge Canal was always to remain under the operational control of the State. The State constitution makes this clear. The State of New York would continue to maintain and operate the canal, it was just that the movement of traffic was be taken over by the Feds. They were to ensure the best use of the facilities, putting private boats under contract with the idea that one large management structure could coordinate the movement of freight. If there were not enough boats to move the freight, then the government would build and operate the boats as needed. This move by the Feds was greatly heralded by the State and her citizens for everyone knew that there were not enough private boats and that the Feds would need to build many boats. These boats would fill the empty canal and the construction of the Barge Canal would be justified. The headline in the Rome Daily Sentinel basically said what everyone else was saying; “McAdoo Takes Over Traffic Upon Canals”. The smaller headlines read; “Barge Canal and Connections To Be Operated As Part Of Railway System”, and then “To Build Great Fleet Of Barges”. The Ithaca Daily News reported; “Barge Canal Under Federal Control. Will mean much to Ithaca- Construction to start at once”.
But even in the State-wide joy, not everyone was happy. New York City Mayor Hylan was warning whoever would listen that the takeover by the USRA was a railroad plot to destroy the canal. But few papers carried this opinion.
On May 15, 1918, the completed Barge Canal opened. The New York Herald wrote of the USRA operations of the canal by saying; “Thus passes the old antagonism of the railways which so long retarded development of the State’s waterways.” The railroad and the canal were to become brothers in arms. With Tomlinson in charge, great plans were made. By the end of April, Tomlinson was stating that he intended to build barges for the canal. In June, Tomlinson was in Buffalo, urging the shippers of the city to use the canal. Here the paper reports an interesting conversation; Emphasis was laid on the fact that the new waterway was not created in opposition to the railroads. Although it was all part of the railroad administration, he [Tomlinson] supposed he was the only man connected with the canal administration who wasn’t a railroad man. It would be idle for me to seek to establish a barge canal system in opposition to the railroads. I don’t expect much encouragement from them, it is true and up to this date I haven’t gotten it. But we’re going to do business on the canal this fall. In the next thirty days we expect to be busy when the wheat comes east for the seaboard, as much of it will be diverted from the short hauls by rail to the water route.”… “At present we are operating on the railroad tariff”, said Mr. Tomlinson. “I have asked the administration to put on a differential for state service and expect a reply within a few days.”
It is hard to read Tomlinson and who he was. He said years later that a person did not need to like his job in order to be good at it. He was a practical man and was very successful in the shipping business. He saw that the people and industry needed to use the canal to make it successful, and he repeatedly pleaded with shippers to use and develop the canal. Terminal arrangements were made at Buffalo and New York City for large amounts of traffic. The papers did their part. The Syracuse Journal editorialized; “Let the communities through which pass the great fleet of carriers once catch the spirit of the industry and the new means of transportation will become as popular as the vastness of the enterprise merits”. In July, it was announced that a fast freight service was being added, with boats servicing terminals three times a week.
The good feelings were not to last. The tariff or shipping rate set by the USRA that Tomlinson spoke to was causing much concern. For the first time in history, the freight rates were equal between the railroad and canal, offering little incentive to ship by canal. By the end of June 1918, the USRA increased the railroad rates by 25%. But they didn’t lower the rates down to where the canal interests wanted them; instead they raised the rail rates. And this was not done to pacify the canal concerns, but to help the railroads who were losing money. The increase in rates resulted in an additional one billion dollars of revenue for the roads.
However, the concern lingered and grew that not only was the public not using the canal, but the federal government, who was supposed to be building large fleets of barges and shipping by canal, were instead giving all the traffic to the railroads. The New York Herald said that; “The State of New York is confronting a calamity unequaled in its history.” At the June 1918 NYS Canal Convention, just a month after the opening of the canal, and two months after Tomlinson’s appointment, a committee was appointed to make arrangements to go to Washington and speak directly with Director General McAdoo. The committee did not receive an appointment with McAdoo until October. When they finally got the chance to speak, what they heard was what they feared. The question was asked if the USRA would ship by canal, and McAdoo reportedly said that he would never ship by canal if he could ship by rail, because it would be harmful to railroad interests. It was the opinion of McAdoo that private boat owners could ship as they wished, however, it was pointed out by the New York delegation that the USRA had contracted with all the serviceable boats. And these boats were sitting idle, or were moving empty between ports. The question was also asked about the building of steel barges, which had been promised in April. They were told that all steel was being used in the war effort and none was available to build canal boats. However, the Federal government was having concrete boats built for use on the canal.
In late July, the Mississippi and Warrior Rivers were added to the USRA control, and on September 8th, George Tomlinson was appointed to become the Director of Inland Waterways, which had control of all the inland rivers and canals. H.S. Noble became the director of the New York Barge Canal section of the USRA.
On November 11, 1918, the War was over and it was hoped that the government would soon be returning control of the railroads and canals back to their owners. However, the railroads (and waterways) were still needed during the demobilization of the Nation, so control remained with the USRA. There were also numerous issues on the railroads that had yet to be dealt with. The problems that existed prior to the war and throughout 1917 were still there and simply handing the roads back to the private corporations might make things worse.
1919, and The Post War Era
One of the issues for the Waterways Division of the USRA is that they had been purchasing and building barges, tugs, and motorships, and they had many under construction as the war ended. The question then became; what to do with this equipment? With the railroads, the government had agreed to make restitution for use of the lines and the engines and cars could be given to the companies. But with the canals, there was no corporate structure to give the boats to. After all, New York State had offered the use of the Barge Canal for free. The short term answer was to operate the government fleet as a shipping business, and continue to provide a service to the State and the shippers. At the same time, the private boat owners were released from their contracts and allowed to operate without Federal control. And the Feds agreed that they would only take shipments between Buffalo and Albany. They would not compete in the local market. For the moment, this seemed to quiet the situation.
With the Nation at peace, public opinion quickly turned against government intervention of any kind, no matter how good the intentions. With no emergency to solidify public opinion, the mood was to go back to pre-war conditions. Although the cry in the papers was to return control of the canal to New York State, the railroads were feeling the same way. The War was over, and it was time to end the government control everywhere. For those in the government, there was still the issue of the failure of the railroads in the winter of 1917. Representative John Esch, a strong believer in the oversight of commerce, introduced a bill to the House of Representatives to switch oversight of the railroads from the USRA to the Interstate Commerce Commission. At the same time, Senator Atlee Pomerene introduced a similar bill in the senate. This became known as the Esch-Pomerene Bill and hearings were held. Although the bill pertained mostly to railroads, the fact that the waterways were controlled by the USRA meant that New York State would be impacted by any legislation. The New York Canal delegation was outraged to learn that the oversight of the federal fleet could be handed over to another federal agency, and much agitation against the Bill resulted. Superintendent Edward Walsh testified before the Committee on Foreign and Domestic Commerce on September 15, 1919 that any further government control or action would be disastrous to the canal and New York State.
In the end, Esch-Pomerene Bill was modified as the Esch Bill and sent to the House where it passed. Going to the Senate, the Bill was modified by Albert Cummins (and others) and the resulting legislation became known as the Esch-Cummins Bill, or the Transportation Act of 1920. This Act resulted in the returning of the railroads to private control as of March 1, 1920, albeit with much government oversight. And the Inland Waterways, well they were turned over to the Secretary of War. On March 1, 1920, George Tomlinson went back to private business, although he may have never totally quit his interests during his tenure in the USRA. A newspaper article from January 1920, states that Tomlinson had recently returned from a two month “ship building mission” to England. In January, 1920, he was appointed as the president of the Buffalo Drydock.
Why the end of federal operations of the waterways was not included in the Transportation Act was not clear. Senator Cummins said he thought the exclusion of the Barge Canal was a mistake, and all agreed that by the time it was noticed in the Act, the time it would take to remove it would push the passage of the Bill past President Wilson’s promised March 1 return date. So it had been left in.
With the government fleet waterways now under the control of the War Department, it was announced that the fleet would continue operations on the New York, Mississippi, Warrior and other waterways that had been under the control of the USRA. Recognizing that all the waterways were hurting from a lack of business, the Secretary of War decided upon an experiment of sorts, where the government fleet would operate solely as a commercial transportation company. (Director General McAdoo had suggested that the government retain control of the railroads for five additional years to see if they could be run as a nationwide experiment.) For the men of New York, this was a continued outrage. The message was clear; with any government craft working the canal, no private company would invest in shipping.
To be sure that the message was heard, in May 1920, an aide in the NYS Engineer’s Department wrote a article for the New York City papers titled; “Why New York’s $150,000,000 Barge Canal Is Idle”. Three reasons were given: a lack of boats, an intrusive Federal Government, and the shippers of the mid-west. An entire page was given to the article which carefully explained that after just two years, New York might abandon the new Canal if nothing changed.
Senator James Wadsworth led the charge to amend the Transportation Bill so that the Barge Canal could be exempt from federal government operations. While the Congressmen from the southern states were happy to have the federal government running barges on their rivers, the New York State Congressmen and men of commerce wanted them gone. More hearings were held and again, Superintend Walsh and others in the State traveled to Washington to beg the Federal government to leave. Again and again, it was claimed that not one private person would operate on the canal as long as the Government fleet continued to operate, because no one could compete with the Government. Although testimony revealed that many private boats were indeed operating on the canal, it was the position of the State that until the Federal government ended operations, the Barge Canal would never be able to prove her worth. Alexander Smith, the Editor of the Marine News, demonstrated the evils of the Federal Government by having placed into the record the testimony of George Tomlinson. George, it might be recalled, said early in 1918, that if the government was to go into the shipping business, he would not. That was proof enough that any level of control by the Fed’s would keep prosperous men of shipping away from the canal.
If the men of New York had simply gone before the Committee on Interstate Commerce and asked that the canal be exempt from the Transportation Bill, all would have been well. Even Chairman Cummins said that the matter would have been over. But they wanted more and asked that the resolution be changed so that in addition to the end of government operations, all the government built vessels; 73 barges, with another 27 being built, and 20 self propelled barges, would be given to the State of New York as “payment” for the use of the canal over the last three years. Thus begins a convoluted argument by Superintendent Walsh (and others), that New York State, who had at first told the Federal government that they were welcome to use the canal free of charge, deserved to be given (paid) a gift of the government fleet.
The men of the south protested and stated that if New York no longer wished government involvement, that they would be happy to take the barges for use on their waterways. The counterargument by Walsh was that the barges, being designed and built for the Barge Canal, were only suitable to the Barge Canal.
On February 28, 1921, the President signed the joint resolution to exempt the Barge Canal from the Transportation Act of 1920. The Government fleet was to be sold to the highest bidder.
The story might have ended there. But it doesn’t. In June 1921, Edward Walsh (the former Superintendent of Public Works and man who spent days testifying before Congressional Committees) and others under the name of the New York Canal and Great Lakes Corporation, purchased the government fleet for $1,400,000. By March 1924, Walsh and his concern were asking that the price be reduced as they could not make the payments. Stating that the canal was “almost unfit” for use, he placed the blame for his financial troubles squarely on the State. In March1925, a bill passed Congress to reduce the price of the sale by $900,000, from $1,400,000 to $500,000. By November 1925, the New York Canal and Great Lakes Corporation had been sold to the Munson Steamship Company for more than One Million. According to Garrity, the steel boats were later sold and moved to Cuba. (Walsh was also facing charges of failing to faithfully conduct the duties of his office while acting as Public Works Superintendent, but that is another article.)
Conclusion
So what really happened in the period between 1918 and 1921? It is clear that New York State asked the Federal government to take control of the new Barge Canal in the hopes that the federal boats would stimulate use of the new waterway. And although the terms; “federal control” and “federal takeover” have been used by many, the federal government never did take over the canal, they took over the movement of freight for one year during the War in 1918. By 1919, some private boating companies were using the canal in spite of the “federal control”. It is also clear that the actions by some people in the Federal government may have been purposely injurious to the new canal by routing freight away from the canal.
However, it is also clear that by the time the new canal was fully open, that there was a lack of serviceable boats and businesses to use the canal. Even if the Federal government wanted to ship by canal, there may have been no boats available to load. The War was over by the time the Federal government had time to design, bid out, and build new barges and ships for the canal. However, the Government pushed forward to finish the boats and put them into use.
When shippers didn’t rush into the canal use void, the builders and promoters of the new Barge Canal may have been looking around for scapegoats. It was clear by 1916 and 17 that there was a lack of boats and firms ready to use the canal. The Federal control would solve that problem. When it didn’t, it was clear that the Federal government control was keeping shippers away. And once the Federal fleet was gone, it was the lack of maintenance, the lack of terminals, etc. People may have been simply grasping at any reason to explain why shippers were not using the new canal. The Federal action of 1918-1921 was just a first in a long line of explanations as to why the canal never reached its full promise.