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Who built Clinton’s Ditch? Not the private sector

From where I live in Fairport, it takes less than 10 minutes to walk to the Erie Canal in the heart of the village. For many years businesses like DeLand Chemical Co., the Cobb Preserving Co. and the Trescott Co. thrived in the community that grew up along the canal.

These days, the canal makes Fairport a recreational and tourism hub. In summer, the Colonial Belle and a raft of leisure craft line the dock in the village. Any time of year, you can hop on a bike and ride the Erie Canalway Trail in either direction almost as far as you can imagine. The village itself now is home to a brewing company, pubs and a great selection of restaurants. An upscale canalside condo development is underway.

Two hundred years ago, the village of Fairport did not exist. Instead, there was swampy terrain favored mostly by malaria-carrying mosquitos. It was not on anyone’s map—except those who were drafting the route of a canal that would stretch from Albany on the Hudson River to Buffalo on Lake Erie.

Long the province of dreamers, the canal became a reality when work started on July 4, 1817, at Rome. Construction was officially completed on Oct. 26, 1825. Population and commerce in Fairport—then called Perrinsville—and scores of other hamlets along the canal route began to mushroom.

The canal’s construction, wrote the late Peter Bernstein in his 2005 book “Wedding of the Waters,” would lead to “an historic explosion of commerce, ideas and technological change. … The Erie Canal would shape a great nation, knit the sinews of the Industrial Revolution, propel globalization.” In time, he added, “this skinny ditch in upstate New York would demonstrate that trade and commerce are the keys to the expansion of prosperity and freedom itself.”

The ambitions of the canal’s early proponents were perhaps slightly less grand. Like George Washington, who wanted to convert the Potomac River into a canal, they sought to master a specific challenge: connecting coastal cities to the continent’s interior. The Appalachian Mountains stood in the way.

The first attempts were private ventures. Washington organized the Patowmack Co. in the late 1700s, perhaps heeding Thomas Jefferson’s advice that “public undertakings are carelessly managed and much money spent to little purpose.” Bernstein gives the Patowmack Co. credit for some true engineering achievements, but the enterprise fell into bankruptcy before it could achieve its goal.

In New York, the Western Inland Lock Navigation Co.—an early example of what today would be called a public-private partnership—was established by legislative act to create a route connecting the Mohawk River to Lake Ontario and possibly the Finger Lakes. It accomplished significant improvements to navigation on the Mohawk, but ultimately the money ran out. Wrote Bernstein: “(It) made clear that ventures this large would overwhelm the limited resources of private investors.”

In the end, the individual with the vision, dauntless spirit and ultimately the wherewithal to build a canal stretching 363 miles across New York was an elected official: Gov. DeWitt Clinton. Many thought it folly—hence the name Clinton’s Ditch—and it took years and many tries to obtain $7 million from the Legislature to fund construction. (After the federal government reneged on promises to help pay for the canal, the state sold bonds to the public and foreign financial markets. When revenues far exceeded operating expenses once the canal opened, the bonds were paid off early.)

Putting Washington’s venture and Clinton’s Ditch side by side, Bernstein wrote: “Suppose we had to bet today on which project would turn out to be the more successful effort, geography aside: a profit-seeking venture controlled by one of the great executives and administrators of all time, or a state-financed project managed by a committee of politicians. The choice seems to be an obvious one.”

Yet the private venture failed financially and the public enterprise was completed on schedule, very close to the original cost estimates “and without a single significant blunder or failure along the way.”

The point is not that politicians know better than business leaders how to build things and create jobs. Often, Jefferson’s observation rings all too true.

Yet sometimes government gets it right. The trick is knowing—when millions of taxpayer dollars are at stake—if that’s likely to happen.

This is the second of three articles. Next: The upstate economy’s not-so-invisible hand.

9/4/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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