Review: The Source – How Rivers Made America and America Remade its Rivers, by Martin Doyle, 2018, 349 pp., W.W. Norton & Company
Martin Doyle’s The Source sets itself forth as an environmental history. It is that, a great telling of the story of America’s quarter million rivers, their use and their abuse. But a narrower way to consider this accessible, insightful and often wry book is as a history of American governance through the story of the nation’s use of water – for power, for transport, for irrigation and, most importantly, as the circulatory systems of cities.
If the fundamental tension defining America’s politics – including today’s wars of political polarization – can be seen as the inheritance of the differing views of government’s role between founding fathers Thomas Jefferson and Alexander Hamilton, then Doyle sees that tension most vividly in water. For Jefferson’s and Hamilton’s quarreling over budgets, debt, taxes and centralized power is merely the ideological and fiscal starting point of the history that remains so alive even today. It is with water, however, that this ideological contest has evolved and continuously played out.
“The whole economic history of the United States is the saga of negotiating the fiscal roles and responsibilities of the different levels of government in providing the most basic of services for their citizens – the water supply and sewer systems,” Doyle writes.
An effort to paint America’s “whole economic history” on the canvas of taps, drains and the conduits connecting them may strike potential readers of The Source as audacious. How about the Louisiana Purchase, or the northern textile economy vs. the southern plantation economy? How about the Oklahoma Land Rush, the California Gold Rush, the Depression, the New Deal or the federal activism of the 1960s and 1970s that was to collide with the Reagan Revolution of the 1980s?
Fair enough. But let’s give the author some license. In The Source, water becomes the means to explore the every-shifting roles and relations between the local, state and federal echelons of governance. This is a subject of enormous salience today as new forms of localism are challenging old notions of national sovereignty worldwide. So a very quick overview of these lessons:
When Jefferson became president in 1801, among his first acts was the founding of the U.S. Army Corps of Engineers, in part, to create “the means of raising or changing the course of water.” The Corps’ subsequent and storied history was to include a central role in the Civil War, the construction of the Panama Canal and the design, building and maintenance of some 700 dams throughout the United States. Today the Corps is responsible for two thirds of the water development in Texas and it operates half the nation’s 25,000 miles of navigable waterways.
But no sooner was the ink dry on Jefferson’s decree than it was state lawmakers who took command of the nation’s governmental stride in the first half of the century with the rapid expansion of state-financed canals. The first serious canal project was the Erie Canal that opened in 1825 and connected the Hudson River in upstate New York to Buffalo and Lake Erie 363 miles away. The world’s second longest canal at the time, it cut transport costs by 95 percent, fueled New York’s ascendency as both the nation’s premier port and cultural center, and prompted a surge of settlement in western New York state and beyond. The canal’s success spurred an explosion of imitators, such that by the 1830s, state governments carried 86 percent of all public debt. The federal share was only 1.5 percent, the rest belonging to local governments, which soon would dramatically grow.
State bond debt between 1820 and 1824 was $13 million but it swelled a decade later to $108 million, half for canal building alone. With few regulations and state debt exploding, America experienced its first great financial panic in 1837.
Which was ultimately to help swing the center of civic gravity from states to cities, most of which were doubling in size every decade or two as America’s population shot upward. This era also saw the creation of even smaller institutions of governance, the “special districts” that dot the American landscape today to fund rural utilities, flood control, volunteer fire departments and other services.
The first were formed in the 1830s as levee districts to control flooding in Mississippi and Louisiana. Soon, they spread to California to similarly manage the levees and flood threats backing up behind the San Francisco Bay into the sprawling delta of the San Joaquin and Sacramento rivers. Today these small, local water, sewer and other tax-for-service districts are ubiquitous and numbers in the tends of thousands. Just in greater Austin, there are more than 100 “special districts” that levee taxes for specific services.
But cities — like Chicago and Cleveland that were doubling populations by the decade — were where the real action was to take place.
“In response to the panic, many states revised their own constitutions to cap the amount of debt they allowed themselves to take on,” Doyle writes. “In the place of states, cities – municipal governments – grew in financial importance as investors increasingly turned to municipal bonds, essentially investing in the future of cities.”
That future was framed by water systems, vividly described in particular through the pioneering work of Chicago. First collective sewers to drain ubiquitous waste and storm water into Lake Michigan – which required actually raising the elevation of the city. Later, against the backdrop of waterborne disease, the advent of separate systems for waste water ensued and the channeling of it to streams said by science to be “self-purifying.” Well not quite, of course. And ultimately, the book carries us to the city-based treatment plants for waste and potable water of the early 20th Century. And the implications for governance.
“By 1902 local government tax revenues exceeded state revenues by 260 percent and national government revenues by 40 percent,” Doyle notes. “Cities were now the fiscal heavyweights of governments.” (Austin, a bit of a latecomer, got its first filter plant in 1925).
And then, of course, the balance of fiscal power shifted again in the Great Depression. Thousands of water and water treatment facilities were to be built by the federal government, some $7 billion in fact. That era was in turn capped by the passage of the Clean Water Act in 1970, which spurred yet another round of federal spending, primarily adding more sophisticated waste water treatment plants to cities and a spate of regulations on previously unfettered industrial polluters.
That might have been the end of the fiscal story as The Source ushers us into today’s more familiar world with federal spending vastly eclipsing that of the junior levels of government while debates rage over the repeal of many tenets of those 1970s-era environmental rules.
But Doyle then leaves us with insights of the roles that cities municipal utilities played in what was to become the 2008 financial crisis. While they may have been overshadowed by the federal government for the latter half of the 20th Century, cities went global at the turn of the 21st. And not very effectively.
Just as home buyers were lured into now infamous adjustable rate mortgages by the promise of ever increasing real estate values, fully a quarter of U.S. cities began leveraging bond debt with complicated new tools called “interest rate swaps.” Cities began doing something similar, exchanging the low-interest revenue of classic long-term bond debt for the higher – but riskier — revenue of short-term debt in the global marketplace.
A quarter of America’s municipal debt – including some of Austin’s – was wagered on this global bet. But it is Jefferson County, Ala., that is the protagonist in this part of the story. Between 2002 and 2004, the city entered some 17 swap agreements leveraging some $5.8 billion in bond debt. When the scheme collapsed along with the city’s bond ratings in 2008, Jefferson County, which surrounds the city of Birmingham, suddenly had an additional $700,000 in weekly interest payments. After tripling sewer rates for its 600,000 residents, Jefferson County declared bankruptcy in 2008.
Toward the future of cities’ role in the national and global landscape of governance, Doyle doesn’t offer us much more. This is, after all, a much broader book on rivers, dams and waterways. But that urban future can’t be effectively written without understanding the history of multi-tiered governance. In so many ways, The Source is exactly that.
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