authorizing the work usually provides a _fund_, the
income of which is to be applied to this object. This fund consists of
such lands, property, and moneys as the legislature may grant for this
purpose. Funds were thus constituted in some of the western states, to
which funds congress made grants of the public lands of the United
States lying within those states.

Sec.6. These funds, however, furnish but a part, some of them but a small
portion of the money necessary to complete the work; and some states
undertaking public improvements may not have the lands or other property
to constitute such a fund. The state therefore borrows the money for a
long term of years, and depends upon the income of the canal fund and
the tolls to be collected on the canals, for the repayment of the money
borrowed. Should the revenues of the canal and of the canal fund be
insufficient, the deficiency may be supplied by taxation.

Sec.7. The business of borrowing the money is done on the part of the
state, by persons duly authorized, who give for the money borrowed the
bonds of the state, which are written promises to pay the money at the
times specified, with interest at the rate agreed on; the interest
generally to be paid semi-annually. These bonds are usually given in
sums of $1,000 each, or less. The debts of a state thus contracted by
issuing bonds, are called _state stocks_, as the capital, or stock
required to construct a state work is obtained by the sale of its bonds.
These bonds, like the certificates of stock in a rail-road or other
corporate business company, are transferable, and may be bought and sold
as promissory notes, and constitute an important article of trade.

Sec.8. These stocks are taken by men who have large sums of money to lend,
and who consider the state a responsible debtor; because, if it has no
other sufficient means of paying its bonds, the legislature has power to
raise the money by taxation. Most of the states have contracted debts in
this manner for various purposes. State stocks are purchased and held
not only by capitalists in this country, but by many in Europe.

Sec.9. Officers are appointed to manage the canal fund, and others to
superintend the canals. There are also officers, called _canal
collectors_, at suitable distances along the canals, to collect the
_tolls_, which are charges paid by the masters or owners of boats for
the use of the canal.

Sec.10. The states of New York, Pennsylvania, O