The Farmington canal was a private attempt to improve internal transportation in Connecticut. Though the canal carried heavy traffic for at least a decade, it was not a successful private enterprise. The main reasons for its failure were:
1. inadequate capitalization consequent economics in engineering and construction;
2. competition with the Connecticut River Company;
3. Iandholder claims;
4. the railroad.
But at its inception it was viewed as a viable answer to Connecticut’s internal transportation problems.
By 1822, Connecticut’s improved turnpikes facilitated the exchange of goods between the interior rural towns and the established commercial centers found along the rivers and coastal areas of the state. But it was expensive to move large amounts of goods over land. Water transportation on the Connecticut, Housatonic, and the Thames offered a much easier and less expensive means of transporting goods. Steamboat travel on the Connecticut made Hartford an equally viable port with New Haven.
With the news that 260 miles of the Erie Canal had been completed in New York State, prominent men in New Haven realized they could have access to the interior by building a canal route running north, from the tidewater at New Haven to the Massachusetts border and beyond. This would increase the commerce and importance of New Haven and at the same time decrease the role of Hartford. The economic importance of Hartford rested on the fact that it was located on the Connecticut River, but New Haven businessmen were quick to point out the difficulties of traveling beyond Hartford because of the Enfield Rapids.
The first step in building the canal was to raise capital. Preliminary meetings were held in 1821 by the New Haven businessmen interested in the venture. (See Appendix B for basic chronology of events). They decided they needed the cooperation of the towns along the proposed canal route and invited representatives to a special meeting in Farmington on January 29, 1822. Seventeen towns that expected to benefit from the waterway were represented at the Farmington meeting. At this meeting a committee was formed to raise $1,000 for a survey to determine the feasibility of the proposed project. The committee hired Benjamin Wright, who was the chief engineer of the Erie Canal, and America’s leading civil engineer at the time, to conduct a preliminary survey from New Haven to Southwick, Massachusetts. In 1822 he reported his findings: “The terrain is favorably formed for a great work of this kind and a canal may be formed for considerable less expense per mile, than the cost of canals now in the making in the state of New York.”
In the original plan, the canal was to travel from the tidewater at New Haven through Farmington to the Massachusetts boarder at Southwick. (See Appendix C and D for maps). A branch or “side-cut” was also proposed which would start at Farmington, go through Unionville, and proceed through the valley of the Farmington River to Colebrook, Connecticut. The canalers envisioned the main portion of the canal would continue all the way to the St. Lawrence River along the course of the Connecticut River through Lake Memphremagog and the valley of the St. Francis River. In addition, the proposed “side-cut” would connect the Erie Canal via the proposed, but never build, Boston and Albany Canal, or the Hudson River. While charters and preparations for all these proposed undertakings were secured, they actually constructed only eighty miles from New Haven to the Connecticut River just above Northampton or the main line, and some three and a half miles of the side-cut in Unionville, which was later turned into a feeder for the main canal.
On May 30, 1822 the Farmington Canal Company was granted a charter to complete the canal in the next ten years, and given a tax exemption for twenty-one years. To protect the interests of the public, the State appointed a six member commission to regulate the activities of the Canal Company. This commission was much like the turnpike commissions that had been established over thirty years before and acted much as the present-day Public Utilities Commission.
The commissioners were specified by name in the charter and were sworn to have no financial interest in the company. Their term of service was set at ten years and payment for their services was to come from the Canal Company. With the assistance of engineers and surveyors, they were to determine the exact route of the canal and were also authorized to sell stock. They were also responsible for determining the right of way; hearing the owners’ situation and making proper judgements on the amount of payment that should be awarded for loss or damages to property caused by construction of the canal. Their other duties included the location of toll houses and private crossings; directing the location, construction and maintenance of any new bridges and highways that might be necessary; calling the first meeting of the corporation; inspecting the construction that was in progress. When the project was finished they were to turn in a detailed report to the proper state agencies on the surveys and location and full details of the cost.
For those services they were paid three dollars a day for every day they worked.
On July 8, 1822 the commissioners voted to make an investigation preliminary to a survey of the route, but no other steps toward actual building of the canal took place for nearly a year. The delay was caused by the fact that the Hampshire and Hampden Canal Company, the corporation which was to construct the Massachusetts extension of the canal was not granted its charter until February 4, 1823.
After the Hampshire Canal Company received its charter, work on the Farmington Canal began. The commissioners opened the subscription books for the Farmington Canal on July 15, 1823, and called the first meeting for two weeks later. A board of twenty-one directors was chosen and they in turn elected Joel Root of New Haven as President.
In August the board of directors hired surveyors under the direction of Benjamin Wright’s son to determine the route and cost of the canal. Wright figured that the cost of construction of the fifty-eight miles of canal line from New Haven to Southwick would be $480,698.88. This figure did not include provision for the costs of land or the 16 1/2 mile side-cut from the main line to New Hartford.
The Farmington Canal Company needed to raise $480,698.88 before they could start digging, and it soon became clear that such funding would be difficult. They optimistically issued stock at one hundred dollars per share with the prospective stockholders paying only a portion of this down, the remainder to follow at intervals specified by the company.
The sale of stock was quite good at first, but soon the demand declined. With no new capital coming in, the directors were forced to ask for some assistance from the Connecticut General Assembly. Unlike New York, the state of Connecticut did not want actual financial involvement in a private endeavor. In an effort to encourage stockholders to invest in the project, the General Assembly offered to make the canal stock tax free until the Farmington Company could earn over six percent profit.
Despite these efforts by the state government the sale of stock did not increase. (See Activity #5 for Lesson on Corporations).
Still in an effort to increase the subscription and to encourage public confidence in the canal project, the directors of the canal company organized the Mechanics Bank of New Haven with a capital of $500,000. The bank’s charter had been granted on the condition that it would subscribe to $200,000 of the stock of the Canal company. The speed with which the Connecticut General Assembly granted the bank charter, and the fact that bank charters were not so easily attained, suggest that the state was at least minimally supportive of the canal project. By April 22, 1825 enough capital was secured for the stockholders to vote for the construction to begin. Later, due to Chronic financial difficulties of the company, the state granted charters to City Bank of New Haven in 1831, and the New Haven County Bank in 1834, again with the provision that they subscribe to stock in the canal company.
The ground-breaking ceremonies took place in July 4, 1825 at the Massachusetts-Connecticut line. Governor Oliver Wolcott had the honor of turning the first spadeful of earth. The spade broke. In years to come when the canal company had gone bankrupt many of its stockholders would no doubt shake their heads and swear that the broken spade must have been a bad omen. At the celebrations though, this event did not receive much attention. Numerous accounts describe the day’s pageantry. An account of the day from the
claims that “There were from two to three thousand people present on the occasion, and among them several gentleman of distinction from Massachusetts.” Another account from the diary of Deacon Hooker of Farmington states, “On Saturday a boat on wheels drawn by four horses arrived in town from New Haven this afternoon containing old Mr. Hillhouse, the superintendent of the canal, and eight or ten other persons . . . . On its stern was painted ‘Farmington Canal’ and on each side “For Southwick & Memphrenagog.”’
In May of 1825, Chief Engineer Davis Hurd called for payment of the first two dollars installment of the Farmington Canal stock. Unexpectedly soon, in August, he called for a second installment this time of ten dollars followed by eight more in rapid succession. These installments were the capital needed to pay the workers and buy the materials. But many stockholders were not able to keep up with them. The failure to obtain these funds when they were needed led to skimping by the contractors. This helps to explain why the canal had a history of constant repair.
The second problem with the canal was the competition with Connecticut River travel. During all this activity, the businessmen of Hartford began to worry about the competition from the canal. To keep New Haven from gaining the upper hand in commerce, the “Riverites of Hartford,” attempted to improve navigation on the Connecticut River. The river was only navigable up to Hartford by sloop. Commerce north of that point was impossible due to the Enfield Rapids and the shallow river bed. The Hartford group had already acquired a charter for the Connecticut River Company from the General Assembly in 1824 for the purpose of improving the navigation of the Connecticut River. Both the Farmington Canal and Connecticut River would serve much the sane area. The Connecticut River was an established river route, with only two barriers to easy travel. The Farmington Canal on the other hand had much more to overcome. Not only did the canal basin need to be dug, but sixty locks also had to be built to raise the water level 520 feet above tide level. In 1825, Riverites petitioned the Massachusetts Legislature for the right to build locks at Enfield. This caused great concern among the supporters of the canal. Despite protests, the General Assembly approved the Connecticut River charter in May of 1825. (See Activity #6 for Riverites vs. Canalers debate).
Meantime construction had begun on both the Farmington Canal and the connecting Hampshire and Hampden Canal, the Massachusetts portion of the Farmington project. It was decided that stocks of both companies should be united to increase the amount of working capital, but no formal action was taken at that time. By 1827 capital taken in from stock subscriptions from the Farmington Canal Company was exhausted and work on the canal progressed slowly. At this rate completion would take much longer than had been estimated with a resultant increase in the overall costs.
Although 1828 saw the opening of the canal from New Haven to Farmington and the great aqueduct over the Farmington River, the Farmington Company was in desperate need of capital to complete its work. In addition to the lack of funds, a third reason for the Company’s difficulties was the complaints from angry property owners who felt cheated out of their land. Town records show that many landowners were not satisfied with the assessment of damages made by the commissioners. Controversy also developed over whose responsibility it was to construct fencing to set the canal off from adjacent lands. In some instances, according to company records, land damages were not paid. This produced bad feeling towards the Company. The canal was also plagued by freshens and mysterious accidents; the “accidents” no doubt the work of some dissatisfied landowners.
In the early part of 1829 the financial embarrassments were relieved for the most part, by the city of New Haven. Citizens authorized the mayor “to borrow the sum of $100,000 on the credit of the city, to be appropriated for the putting of the Farmington Canal in perfect condition for the public use.”
With this new source of capital the Canal company was able to settle all of the outstanding claims for land damages. The company also made some necessary improvements such as building the lockhouses and repairing any breaches. With a few small exceptions the Connecticut project was complete. With the Massachusetts project having completed its work from the Connecticut state line to Westfield, there was a continuous line of navigation from New Haven to Westfield, Massachusetts. This produced a good amount of business and even helped to reduce the price of fuels such as coal and wood in the Connecticut River Valley area.
Nevertheless, financial troubles continued to plague the canal. The original estimate for the Farmington Canal was $420,698.88, but by 1830 the price had reached $770,000 because of the land damages and many repairs. The Hampshire and Hampden project was also over budget, although not as much as the Farmington. Again the two companies went looking for the necessary capital to complete their projects.
On February 22, 1830, James Hillhouse, the superintendent of the company, made an appeal to the federal government for a grant of $155,000 to complete both projects. He argued that the entire country would benefit from the completion of this internal improvement. Strong opposition came from the Connecticut River Company. To counter Hillhouse’s proposal, the Riverites presented an argument to the United States House of Representatives which questioned the practicality of the whole New Haven scheme. Hillhouse’s bill to secure federal money for the completion of the canal, H.R. 276 of the 21st Congress, failed to pass. The “Riverites” won. All work on the Hampshire and Hampden came to a standstill because it had exhausted all capital.
For the canal in Connecticut, this meant a continued struggle to keep the canal in good repair with no ability to make the necessary large scale improvements.
Although completion of the canal to Northampton and the Connecticut River would not be accomplished until 1835, the years between 1830 and 1835 witnessed a steady stream of business on the canal with some minor interruptions because of damages or weather. The increased freight business on the canal had a positive economic affect on the communities that it served. By 1830 the Farmington was an essential factor in the business activities of the region. Businesses advertised that they had access to canal navigation. It was estimated that the same amount of business done on a railroad would have paid in freight, on an average, not less than seventy thousand dollars a year.
The canal did have some economic impact on the commerce of New Haven by diverting goods up the canal rather than the Connecticut River. Plainville built a canal basin where boats docked and many small businesses grew up around this “port.” The clock makers in Bristol found canal transportation to be much safer than turnpikes for their delicate products.
But boats that used the Canal were not owned by the Canal Company. Anyone who wished to use the canal could do so by simply paying the required toll, which depended on the weight of the merchandise being carried. The amount of money taken in by tolls was only enough to cover the average operating expenses of the company, and could not handle the extraordinary expenses due to such things as floods and drought, or the draining of canal waters by desperate farmers, events that plagued the canal throughout its history.
By 1836 both the Farmington and Hampshire companies were in severe debt. People by this time were not quick to subscribe in an endeavor whose history was one of unrelieved financial disaster. Worse yet, those who had agreed to invest did not meet the installments on their subscriptions when they were due. No stockholder was ever known to receive a divided on his investment.
Finally on June 22, 1846, the New Haven-Northampton Company was established to take the place of the two original companies. The stocks of the two older companies were relinquished. The debts were partially paid and subscribers bought stock in the amount of $120,184.92.
This capital was secured mostly from the old stockholders of the two previous companies who evidently did not want to lose all of their initial investment. An account of this event states, “It is not a little creditable to the enterprise of the patrons of this work, that after so great losses in the former Companies, they should embark so readily in the new Company.”
For ten years, until 1848, after this financial arrangement was made, the Company met the costs of washouts of the canal banks and other troubles and carried a steady traffic.
Perhaps the most fundamental threat to the canal came in 1838 with the opening of the New Haven Railroad between New Haven and Meriden. A decade later, in one last effort to salvage their investments in the tired old canal, the stockholders petitioned the General Assembly for authority to build a railroad on their canal bed. A charter was granted, and work on the railroad commenced on January 1847.
The road opened to Plainville January 18th, 1848, to Tariffville January 19th, 1850, and to Collinsville, February 28th, 1850. The canal took five years to complete. The railroad took only a year. The canal project cost its investors $1,089,425.10 while the railroad only cost $186,000.
The canal did provide the railroad with two distinct benefits: a complete right of way, and graded banks which could be used as a railroad bed. This had the advantage of saving about a third of the ordinary construction costs. The railroad had other advantages in that it was basically a monopoly. The line owned the road, its own carriages, and it could charge what tolls it liked. Canal lines were abandoned not just here in Connecticut but in many other parts of the country as well because although train freight rates were more expensive, people wanted a faster method of transportation. Trains were the answer.
Construction and operation of the Farmington Canal had both positive and negative affects on the communities along its banks. While actual economic impact is difficult to measure, as a method for linking geographical specialties, the canal it was effective. Cargo manifests show the diversity of products that traveled on the canal. Items such as coal from the west, farm products from the interior areas of western New England, and iron and steel were transported to various markets. The canal also helped to stimulate new business ventures along its bank. In Farmington the Union Hotel, now the main building of Miss Porter’s School was built for canal patrons. After the closing of the canal the stretches between locks were used as mill ponds. Mills and factories that produced small items such as buttons were established. Even during its operation there were successful attempts made at using the waters of the canal for power. For New Britain the canal created a need for improved roads to towns such as Farmington and Plainville. In Cheshire a warehouse was built on the banks of the canal which helped to foster other kinds of businesses. This area became known as Beachport and is West Cheshire today.
The canal boats offered convenient and more pleasant travel on Sundays to the Village church. The clock industry of Bristol also benefitted from the canal.
To children the canal provided unlimited enjoyment. In the winter they raced mile after mile on the canal’s frozen waters. In hot weather the canal provided a safe swimming hole even for the youngest swimmers. People enjoyed taking packet boat excursions to any town along the canal bank.
The canal of course had its negative points. The most obvious problem created by the canal was the disruption caused by its construction, the commissioners and surveyors determined that. Individual land owners had no control over the course of the canal. The canal company had the right of eminent domain and little could be done if the canal had to cut through a farmer’s best field. Land damages were awarded, but many individuals were not satisfied with the monetary compensation.
To many the canal meant that their farms and highways would be ruined. Farmers continually complained about hayloads being upset as they passed over the steep bridges of the canal that crossed the highways. Farmington town records are full of their negative votes on building the canal.
The most noticeable failure of this Connecticut attempt at internal improvement was the inability of all three corporations to find sources of adequate capital to sustain the functions of the company. Although the General Assembly did make some major contributions, the state still never considered supplying these private enterprises with public money. Another problem that greatly affected the ability to raise capital was that their only source of revenue was charging tolls, the amount of which was never enough to even cover the normal expenses of the corporation. If the canal company had owned the boats which used the canal or charged freight rates as the railroads did, perhaps an increased amount of revenue would have been produced. High construction costs and repairs led to financial disaster. “Canals were never able to control the lines of travel, or carry passengers to any great extent; this deprived them of great sources of revenue possessed by the railroad.”
It is interesting to speculate on the fate of the canal had the state or federal government involved themselves in the financial affairs of the company. By the modern standards of our mixed economy the justification for government’s involvement is clearly evident. The canal, a large scale private enterprise, did provide an important public service, much as private utility companies do today. The benefits of the canal were evident in the amount of commercial activity that its presence generated. Laissez-faire attitudes nevertheless prevailed.
The failure of the canal must in part be attributed to the unwillingness for the public to make an effort to support this massive private enterprise. Perhaps, if this support had been provided, the canal’s fate would have been quite different.
The failure of the Farmington Canal shows that such a large scale private enterprise involving so many towns and with the benefits to so many people needs to have public support. Throughout the canal’s history Connecticut government refused the canal company financial assistance. Other state governments such as New York and Ohio had contributed heavily to their projects. Clearly the failure of the Farmington Canal demonstrates that large scale enterprise for the public good requires more than private capital. It is a demonstration that government must play a large role in the economic life of the nation.
Over the years since the canal the laissez-faire attitudes of leaving private enterprise to its own devises has changed drastically. Today economists use the term “mixed economy” to describe the economic system of the United States. Although government has increased its presence in every aspect of the economy, the idea of a mixed economy did not emerge without resistance. The Farmington Canal’s failure is an example of that resistance in Connecticut.