To have polylines connect to form polygons, the end points of the polylines must be within the snap tolerance. Any two polyline nodes that lie within the Snap Tolerance distance can be "snapped," meaning that the two nodes are coincident (use the identical XY coordinates).
To change the snap tolerance,
Click the Tools | Project Settings command.
In the Project Settings dialog, click on the Tolerance Settings tab.
The Snap Tolerance should be large enough to get coincident points, but not so large as to determine that points are coincident when they should be adjacent. For this project, a Snap Tolerance of 0.075 map units (degrees) would be good. Highlight the existing value next to Snap Tolerance and type 0.075.
To display the snap tolerance as a circle around the first and last point on a polyline, check the box next to Show Snap Tolerance Circles.
Click OK, and the snap tolerance value is set.