As the United States entered World War I, it was thought 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.
In 1917 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, plans were to have the entire canal channel and locks ready for use in the spring of 1918. However, there were few boats available for use on the canal, for a number of reasons:
1) 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;
2) Boats operating on the new canal had to either be towed, or have a means of propulsion. Many family operated boats simply didn’t have the means to purchase and operate a tug or powered barge; and
3) 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 looked at their new creation, and saw few private companies ready to make use of the canal, they turned to the Federal Government. In the lead up to the War 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, writing in 1916: “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 had created a Committee on Waterways, so New York looked to Secretary Redfield.
On August 24, 1916, the President 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 consider the new Barge Canal for shipping. The group toured the Barge Canal facilities, still under construction, but it became clear that the lack of boats and terminals was a major problem. The committee appointed to study the canal never made public its report, and no action was taken.
Meanwhile, in April 1917, the Emergency Fleet Corporation (EFC) was created by the United States Shipping Board, (itself established by The Merchant Marine Act of 1916). The EFC was to tasked with acquiring, maintaining and operating a fleet of merchant ships to meet the needs of the national defense, and those of foreign and domestic commerce during the war. On July 11, 1917, President Wilson gave to the Emergency Fleet Corporation the wartime power and authority to acquire any needed existing vessels, and to build additional vessels as needed. The EFC also could operate all the vessels that had been acquired by the United States, but only provided no private companies could be found to do so. Still, no movement was made by the Federal Government to use the Barge Canal.
So on August 1, 1917, the canal operators of the State held a New York State Canal Convention passed a resolution asking the State to petition the Federal Government to take over transport on the Barge Canal. At the end of August, New York Governor Whitman asked President Wilson to take charge to no result. The public and the press jumped on the Federal control bandwagon however, 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 Emergency Fleet Corporation 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 to cross to Europe. 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 United States Railroad Administration (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, 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, 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, and the steel ready to be shipped. 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 a great misunderstanding of later historians 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. These boats would fill the empty canal and the construction of the Barge Canal would be justified. Although there was nearly state-wide joy in the takeover, 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. 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 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%, not to pacify the canal concerns, but to help keep the railroads from losing money. The increase in rates resulted in an additional one billion dollars of revenue for the roads.
However, the concern 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. When the committee met with McAdoo in October, they heard what they feared. When asked if the USRA would ship by canal, McAdoo reportedly said not 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. The Federal government was however, having concrete boats built for use on the canal.
In late July, the Mississippi and Warrior Rivers were added put under 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. The railroads (and waterways) were still needed during the demobilization of the Nation however, so control remained with the USRA.
1919 and the Post War Era
One of the issues faced by the Waterways Division of the USRA was what to do with the barges, tugs, and motorships they had been buying and building, even as the war and had more 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 well intentioned. With no emergency to solidify public opinion, the mood returned to the pre-war years. The newspapers and the railroads sought to return control of the canal to the state. 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 in September, 1919 that any further government control would be disastrous to the canal and New York State.
In the end, what became known as the Esch-Cummins Bill, or the Transportation Act of 1920 was passed by Congress, which returned the railroads to private control as of March 1, 1920, albeit with much government oversight. The Inland Waterways however, were turned over to the Secretary of War. Why the end of federal operations of the waterways was not included in the Transportation Act is not clear. Senator Cummins said he thought the exclusion of the Barge Canal was an oversight, and all agreed that by the time it was noticed the change would have delayed passage beyond President Wilson’s promised March 1 return date.
With the government fleet waterways now under the control of the War Department, which recognized they were hurting from a lack of business, the Secretary of War decided upon an experiment of sorts: the government fleet would operate as a commercial transportation company. (Similarly, 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.) In New York this was widely held as a continued outrage. With government craft working the canal it was believed, no private company would invest in shipping. 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 argued that if nothing changed, New York might be forced to abandon the Barge Canal after only two years.
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 their allies in commerce wanted them gone. Repeatedly, 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 seen as proof enough that any level of control by the Fed’s would keep prosperous men of shipping away from the canal.
If 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. Some southerners protested 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, but left the Government fleet to be sold to the highest bidder. The story might have ended there, but in June, 1921 Edward Walsh (the former Superintendent of Public Works and a 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 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 March, 1925, a bill passed Congress to reduce the price of the sale by $900,000, from $1,400,000 to $500,000. By that November, the New York Canal and Great Lakes Corporation had been sold to the Munson Steamship Company for more than $1 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.)
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 a single year in 1918, and 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 in the Federal government may have been purposely injurious to the new canal by routing freight away from the canal toward the railroads.
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 were not enough boats and the war ended before there was time to design, bid out, and build new barges and ships. The Government did however, push to finish the boats and put them to use.
When shippers didn’t rush to the new canal, the builders and promoters of the new Barge Canal may have been looking around for scapegoats. Again, it was clear to everyone that by 1916 and 17 there was a lack of boats and firms ready to use the canal. The hope was that “Federal control” would solve that problem. It did not, and it was very clear to some that the Federal government control was not using the canal for shipping. So the Federal government became the scapegoat. However, 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.
This version of this article first appeared in Bottoming Out, the journal of the Canal Society of New York State.
Photos: Above, the Lockport locks (the 19th-century locks are visible on right; the electric lift locks (1909-1918) are visible on left; below, new locks at Buffalo, 1918.