American canal enthusiasts patterned their ideas on 18th-century canals they knew of in England. Canals had been created out of a need for better inland routes of commerce. DeWitt Clinton, who was largely responsible for the construction of the Erie Canal, summed up the feelings of the day in his classic 1815 “Memorial.” As he saw it, canals had the effect of labor-saving machines by cheapening the costs of transportation. Canals would encourage the growth of population and the construction of new inland towns. Canals would also safeguard against local monopolies by developing new inter-regional trade. The manufacturer’s of the east would have access to the agricultural wealth of the west, each would become a new market for the other. “Hence the prosperity of a country was proportional to the extent of its inland navigation.”
Many contemporaries felt as Clinton did, that canals would create such a vast system of internal trade that eventually America’s dependence on foreign markets would be greatly reduced. In addition many felt that lower transportation costs would lead to an increase in consumption and thereby increase new investment in America’s developing industries.
The problem with canals was their cost. Many financially unsuccessful turnpikes cost from $5,000 to $10,000 a mile, while canals cost $25,000 to $80,000 a mile, and they took not a year or two to build, but eight to ten years.
Opponents pointed to the extreme expense of canal building and emphasized America’s vast size and variegated topography. The United States was not England, in terrain or economy. If these engineering marvels were to be undertaken, where would the finances come from? The federal government’s assistance to internal transportation was at best minimal. Private investment capital was scarce by comparison with Britain, and canal projects due to their lengthy periods of construction did not offer the speculator instant returns on investment. It seemed that many of these enterprises would be only successful with the assistance of state or local funds or by a mixture of public and private enterprise.
Predictably, state governments played a greater role in canal construction than private enterprise. The public works projects of New York, Pennsylvania and Ohio were responsible for more than half of the entire canal investment before the Civil War.
On Connecticut, however, builders received little or no financial support from the state, though they were granted liberal charters which did help to promote construction. Private investment amounted only to about twenty-five percent of the total canal investment before the Civil War.
Forty-two hundred miles of canals were built in the United States between 1815 and 1816.
The canal age lasted well into the 1840s and 1850s when canal transportation was gradually abandoned in the face of railroad competition.
Even after the age of canals had past, their impact on centers of population and industry was such that their paths many times determined the paths of the railroad networks that would replace them.
The canals of the ante-bellum period were indeed effective avenues of inland commerce. In 1852, a period of diminishing canal importance due to the increased activities of the railroads, figures show over nine million tons of freight moved over the nation’s waterways.
The benefits of the canals seem to have exceeded the $188 million that was invested in them.
Even the unsuccessful enterprises had some economic benefits. A canal which might have been an investment fiasco to the stockholder could still bring business opportunities and profits to the enterprises they served. For a time canals accomplished much that their dreamers envisioned they would. (See Activity #3 for lesson on Importance of Water Transportation in 1800)