Financial Troubles
"After 1837 the state was faced with the problems of the economic depression and the financial difficulties that this entailed."
-Professor J.M. Lamb
-Professor J.M. Lamb
Overspending on the Canal
“In the first place, the financial problem had not yet reached its solution.… Men hesitated to invest in canal lands till convinced that the construction of the canal would not be further delayed…. Furthermore, the alternative plan for raising the necessary funds proved even less successful….”
-Dr. James Putnam
-Dr. James Putnam
These charts show the canal debt and excess of expenditure in Illinois. In order to overcome these financial debts and continue with the canal construction, the Canal Commissioners had to find a way to increase revenue efficiency.
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A Way Out of Debt
"We are confident that the adoption of the [revenue] system recommended, will result in the State obtaining money on the security proposed to complete the canal, maintain our honor, and ultimately relieve the State from debt; it will, without oppressive taxation, extricate us from overwhelming difficulties, preserve our name untarnished, complete our canal, and add millions to the taxable property of the State."
-Lockport Canal Commissioners
-Lockport Canal Commissioners
"The committee hopes that the causes which compel this [tax] reduction may be short duration, and that, as soon as practicable, the present rate shall be adopted and continued until the people shall be relieved from the burden by the revenue of the canal, and by the disposition of the property of the State to her creditors. By this course, and by adopting the present rate for a given number of years, we shall provide for the current expenses of the government, and have a constantly increasing surplus to be applied to the reduction and eventual extinction of the debt."
-Documents Relating to the Illinois and Michigan Canal |
In summary, Illinois adopted a new revenue system that handled tax dollars more efficiently. The new system allowed Illinois to pay off the canal's debt and make the state more appealing to immigrants, who would labor to complete the canal.