Damages during the same period 305,796.68 ---------- 2,553,093.69 ------------ Balance against the State $650,103.05 "If to this be added the interest on the canal debt, the cost of collection, and the difference between miscellaneous expenses and receipts, as set forth in detail in Exhibit B, the loss to the State from the canals during the last fiscal year will be found to amount to the enormous sum of $1,412,470.79. "The cost of repairs and maintenance is so obviously out of all proportion with the necessities of a system of completed structures like our canals, which have little that is complicated or perishable about them, that we are forced to seek the explanation of it in their administration. "Our investigation was not long in revealing the fact that the canals have not been managed upon the principles which would govern any man in the administration of his private estate. The interests of the public have been systematically disregarded. The precautions with which the Legislature has attempted to defend this property from peculation and fraud, and secure for it faithful and efficient service, have been deliberately and persistently disregarded; while the responsibility of its agents has been so divided and distributed as to leave the State comparatively remediless and at the mercy of the predatory classes, who have been, if they do not continue to be, a formidable political power. "The more conspicuous evidences of mismanagement which our investigation has disclosed may be divided into three categories: "_First_, as to the modes of letting contracts. "_Second_, as to the modes of measuring and estimating work to the contractors. "_Third_, as to the facilities for procuring legislative relief. "_First_, as to the mode of letting the contracts: "It seems to have been the practice for years to let contracts upon conditions which exclude honest contractors and confine this business, at least as to what are termed 'extraordinary repairs,' almost exclusively to large capitalists. The large deposits required from contractors discouraged bidders with small means, while the encouragement offered to unbalanced bidding, by a neglect to enforce the faithful performance of the provisions of the contract, have a tendency to exclude all who bid fair prices, with the honest intention of giving the State fair work for them. Till since the commencement of this investigation we do not know of a single instance in which any forfeiture of his deposit had been enforced against any contractor; while we believe we do no one any injustice in saying that no contract has been let since 1868 the provisions of which have been properly complied with.