Erie Canal

The answer to the question “why this big deal about DTIS and canals’ is “look at Erie Canal”.

The second question that follows when one examines the case history of the Erie Canal is “why did it take so long for the Erie Canal to be approved?.

Let’s start with the second question. In the opening module about our illustrious “First Economic Developer”, George Washington it was clear that he fully appreciated the potential of the Mohawk Valley as the site for a canal–he was not the first, by any means–but he correctly saw its potential in opening up Upstate New York and the Great Lakes, if not the northern Ohio territory. This was in 1783. When he returned to Virginia he organized his network, led by of all Virginians Thomas Jefferson, to start building Virginia’s canal into the southern Ohio or risk being beaten to the area by those “Yorkers”. During 1786-6 he kept close attention to those Yorkers; several of them including Wilson and Fulton stayed with him at Mount Vernon for several days–with canal-building their principal topic. He shared with Lafayette his concern that Virginia could fall behind in this “race” to the interior hinterlands. The pace of his canal-related activities during those crucial years, and his insistence that the Articles of Confederation were the chief barrier to its achievement generated the initial constituency to demand its revamp. Without doubt, the Tidewater Virginians were first to recognize the importance of being first to open up the West–and the Potomac, by hook or crook–highway or river/canal–was the way to do it. And they were not adverse to using the power of the Federal Government to do it.

By 1783, it seemed obvious to anyone who cared to look that New York possessed a unique geographical advantage that privileged New York with the easiest access into the nation’s interior. That access was the Mohawk Valley, a deep valley because the river had for eons chipped away at the bedrock. Over a hundred million years, that river created a deep gorge that squeezed river flow through a narrow valley, increasing its velocity and wearing away the rock. “The Mohawk was the only river that slices right through the Appalachian mountain system. All the other rivers rise on the eastern slopes of the mountains, and flow to the Atlantic, requiring land travel across rugged mountain passes to reach the western slopes[1] Bernstein, p. 48 Virginia and the Potomac was the shortest–in terms of mileage–but the ascent and the elevations were among the Appalachian’s highest and most rugged. The Mohawk, however, once the great barrier at Little Falls was breached, the land beyond was relatively flat–without need of tapping a western river system to flow westward. “That gorge made the Mohawk Valley the [potential] nodal point of the national network of transportation, ideas, and economic and political forces forging the powerful link between the Atlantic and the vast land to the west” [2] Bernstein, p. 49.

The Delay Explained

It wasn’t a secret that the Mohawk offered New York a unique opportunity. Peter Bernstein presents several chapters full of colorful and articulate individuals and advocates who were committed to building something–canals were the most logical–and as he further details–they got nowhere. Cadwallader Colles made his presentation to the New York State Legislature in 1784–the same year and month as Washington made his to the Virginia legislature. Washington got Virginia to incorporate his state-chartered company in January 1785, and by the mid-1790’s the canal/river system reached to Cumberland MD on the border of the Ohio. The National Road would follow by 1803. Construction on the Erie Canal only began in 1817–thirty-two years after Washington started his race–and over twenty years after his canal had reached to the Ohio borders. Why the delay?

The easy answer is that the Virginia legislature jumped on board right away, while the New York legislature told Colles that his was a wonderful idea, but it was too expensive for the state and Colles should enlist private support for his project. In the next year the legislature gave Colles $125 to conduct a survey–and a lots of rhetorical encouragement–but by 1786, it was clear Colles could not muster the private support the legislature demanded. Colles eventually abandoned the project and moved on to produce a tourist atlas detailing the road system from Albany to Williamsburg VA–no one bought it and Colles moved to Philadelphia, and eventually got caught up in the Fitch steamboat fuss.

Next in line to advocate a canal was Elkanah Wilson (having a weird first name seems to be directly related to NY canal advocacy-after Cadwallader and Elkanah-the next in line will be Gouverneur Morris, and the guy that finally did it was DeWitt Clinton; Virginia simply let George do it). Wilson spent three days with George in January 1785 discussing canals at Mount Vernon while Washington nursed his flu, and served him tea at his bedside [3] Bernstein, p. 85. Watson himself wrote that Washington, having offered him a place in his Virginia project (which Wilson turned down), convinced Wilson that canals were the innovation of America’s future: “Hearing little else for two days from the persuasive tongue of this great man, I confess completely infected me with the canal mania and enkindled all my enthusiasm” [4] Bernstein, p. 86. In any case, after necessary due diligence including an extensive road trip into NY’s interior after which he drafted a report which was nothing less than a call to build the Erie Canal.

To this end he contacted his Albany State Senator, Phillip Schuyler–who was already a member of the canal “choir” by virtue of his having experienced the great canal of the day, the Bridgewater Canal in the UK. Schuyler, a Revolutionary War hero and general from Albany’s most prominent family- also the father-in-law of Alexander Hamilton–was a potentially powerful ally. The two conspired and Watson sent his message/report to the state legislature in December 1791. The legislature loved it and approved shortly after the Mohawk Improvement Bill, which had been jointly sponsored by Schuyler and Governor George Clinton. The bill incorporated the Western Inland Lock Navigation Company. The thrust of the bill, however, was to not building a canal, but rather improving navigation–the river was the primary route–and was based on Washington’s Patowmack river/canal/highway hybrid system over the mountains.

Schuyler appointed himself as its chief, albeit part-time engineer, and that seemingly ruptured what had been a bi-partisan consensus.  Governor Clinton’s executive secretary, his nephew, however as a personal and political rival to Schuyler, publicly wrote that Schuyler decision was a that of an “mechanic empric … [who is] wasting the property of the stockholders”. DeWitt Clinton had entered into the canal fray. In any case, Dewitt was only frosting on the Western Inland burnt cake. The Corporation did its thing for several years, both Watson and Schuyler eventually left it for greener pastures, with the latter taking over a U.S. Senator position recently vacated by its previous occupant, DeWitt Clinton’s appointment to be New York City’s mayor. Not without its successes, including building of several locks which bypassed the Little Falls barrier, the Western Inland Corporation puttered along and was only formally closed when the “real” Erie Canal opened in 1825. The privately-owned and managed state-chartered Western Inland simply put failed in its task to link the Hudson with the Great Lakes. Bernstein describes the cause for its ineffectiveness and slow pace:

There was never enough money [for the state-chartered corporation], even with this high-powered backing. In the end [only] 743 out of the authorized 1000 shares were sold, but 240 of those were forfeited because their owners refused to meet the calls for additional capital. By 1801 the stockholders had been called nine times to increase their investments. The State had to donate $10,000 in 1795, and then lend the company another $37,500 the following year. Total outlays for construction amount to $400,000, but the investment was never a rewarding one. The company paid only two dividends in its lifetime [and never made a dime in profit] [5] Bernstein, p. 95.

The Pace Picks Up

By 1805, it was clear the Western Inland was in trouble, and so when President Jefferson announced that there were federal funds available for internal improvements, and the atmosphere in Washington led by him and Henry Clay produced the great spasm of canal and internal improvement action that culminated in Gallatin’s 1808 Report. Gallatin’s Report as we have noted observed that the pace of canal-building was slowed, “because the resources of private investors are too small to achieve the greater goal“, and that justified, arguably required the entry of the federal government in to internal improvements [6] Bernstein, p. 113. So predictably a New York Representative Joshua Forman introduced legislation that invited the federal government to participate in the linkage of the Hudson to the Great Lakes internal improvement–resulting in is passage the following year (1809) authorizing $1,000 for a survey. The survey was conducted over the next several years, and it catalyst a new advocacy constituency separate from the Western Inland Company. In particular, the Holland Land Company (who possessed Robert Morris immense defaulted land holdings in central and western New York) and its chief surveyor, Joseph Ellicott combined forces with New York State’s Office of Surveyor and produced an immense survey/report which detailed how and why an internal improvement could link the Hudson to the Great Lakes.

A formal report was drafted in and filed in Congress in January 1809 , accompanied by a personal meeting with the now lame-duck President Jefferson. Jefferson’s reply at the meeting more than suggests why the Federal Government never became involved in the New York canal program–and where Jefferson’s true position regarding internal improvements lay. In this reply is Jefferson’s much repeated quote about a 350 mile canal being “sheer madness”–but instead of conveying his opposition to internal improvements, the unabridged comments convey his real purpose. Jefferson’s reply was summarized by Representative Forman the presenter at the meeting as:

“Why Sir [to Forman] here is a canal of a few miles projected by General Washington [the Patowmack, now the Delaware and Ohio] which, if completed would render this fine commercial city [Washington D.C and presumably the intermediate lands of Virginia and Maryland], which has languished for many years because the small sum of $200,000 dollars necessary to complete it, cannot be obtained from the general government, the state government, or from individuals–AND YOU TALK OF MAKING A CANAL OF 350 MILES THROUGH THE WILDERNESS–IT IS LITTLE SHORT OF MADNESS TO THINK OF IT AT THIS DAY [LARGE CAPS MINE] [8] bERNSTEIN, PP. 124-5

The message that Forman got from this response was that Jefferson did not think canals to be mad, nor internal improvements, but rather than a Tidewater President would award funds that would allow New York to compete with a Virginia-Tidewater canal was what as “sheer madness”. Forman reportedly ended the exchange with Jefferson with the words “the state of New York would never rest until [the canal] was accomplished [9] Bernstein, p. 125.

Jefferson’s reaction to federal funding of the Erie Canal certainly struck a nerve in New York, but so did the “awesomeness” of building a 350 mile canal through the near-Wilderness. The task was daunting, and Western Inland’s experience did nothing to settle one’s nerves. Even its old-time old time advocate Elkanah Wilson thought its as “extravagant as a canal to the moon”. On top of this dose of reality, the prospect of a serious trade war, maybe even the real thing, with Great Britain erupted anew in 1809. Warring Britain and France both set up blockades. The port of New York was especially hard-hit. Migration into Upstate New York dwindled to almost nothing–hitting the bottom-line of the Holland Company. Congress repealed the 1807 Embargo Act and replaced it with the Non-Importation Act; the former had forbidden imports, but not exports, and the latter simply reversed the equation. In any event, 1809 proved a waste in terms of advancing the prospects of the hypothetical Erie Canal.

But 1810 was better. The catalyst was yet another crisis in Western Inland’s finances. With barely enough funds to provide maintenance for her existing network, Western Inland’s Board was split over the question of whether to extend the system deeper into central and western New York. What passed for a market analysis suggested such an extension would increase revenues sufficient o pay for the costs of extension. A board member, Thomas Eddy, met with a favorably inclined state legislator, Jonas Platt, and together they came to the conclusion that a legislative commission could study the matter, and prepare a case not just for a limited expansion, but for a canal that stretched to the Great Lakes. The commission would evaluate if a pure canal or a continuation of Western Inland’s river/canal hybrid was the better alternative to extend across the whole of New York.

Platt also insisted the matter be framed so that any extension would be performed and financed by the state of New York itself–not a state-chartered private corporation. Platt asserted that “No private corporation was adequate to, or ought to be entrusted with the power and control over such an important object”. Platt felt strongly that the frustration with the Western Inland was so great, his proposed legislation was all the stronger if it abandoned any association with the near-discredited enterprise. The bill also listed a bipartisan commission, with its prospective members identified, and included funds to hire a competent engineer, who was identified and included in the legislation. Before introducing the legislation, Platt needed to ensure that New York Mayor DeWitt Clinton was on board.

Eddy and Platt met with Clinton to make their presentation. It worked. It caught Clinton ‘s imagination, and it seemed a perfect capstone for his future ambitions. With Clinton’s support the commission bill was approved by the Legislature.  Clinton was to serve ten terms as Mayor and during that time the city prospered, and was clearly overtaking Philadelphia in becoming the nation’s largest city. In 1810, New York overtook Philadelphia (and her two suburbs who would shortly be annexed). Upstate New York had also grown dramatically over that last decade, from 589,000 in 1800 to 959,000 in 1810–the Yankee Diaspora had commenced in earnest. New York had now surged past Virginia as the nation’s most populous state. Clinton asserted that New York should and could be “the Empire State” if it were willing to assume leadership in economic and population growth. The Canal Commission with its newly-appointed bi-partisan and geographically diverse membership seemed a likely source of leadership and innovation: the canal itself seemed as a bold venture into the unknown.

The Commission’s de facto head was Gouverneur Morris. Its membership composed of Federalists and Democrats (such as Clinton himself), and a western New York canal advocate and political power, Peter Porter, the Genesee region’s “patroon” landowner Stephen van Rensselaer, plus several Western Inland Board members. Seizing the initiative the commission en masse decided to survey and tour the area and develop its plan and support along the way. Its engineer accompanied them. they brought with them the 1808 surveys and reports presented to Jefferson–including with them by default the Holland Land Company. Morris, a Founding Father, then 58, with only one good leg–the other amputated by a carriage accident, brought along his new young wife. His core love was New York City, and although a Federalist, he was determined New York City rise to its potential greatness. Before he left on the tour in June 1810, he allied with Democrat Mayor Clinton and successfully approved legislation to install a grid street system over Manhattan–12 north-south avenues, 166 cross-streets, plus the old intersecting Indian trail, Broadway. His next joint project with the Mayor was the Canal. In 1810, he hoped that this bi-partisan “get things done” approach would yield him the 1812 Federalist Presidential nomination–which it did.

The tour lasted fifty-three days and bonded the group into a coherent plan of advocacy. Bold and expansive was the theme they brought back–and the theme they were determined should be incorporated into the Commission’s Final Report. Despite Morris’s insistence of a highly impracticable canal structure, the Commission under Clinton’s determined leadership produced a unanimous vote in favor of a 350 mile pure canal, owned, financed, and built by government not private enterprise was the way to go. Drawing upon the Western Inland experience, and the unwillingness of the Federal Government to participate, the government seemed the only place where resources and will were sufficient to the bold task that lie before them. Clinton took it to the Legislature and in 1811 secured its passage–just in time for the War of 1812. A variety of problems soon appeared. The Federal Government once again refused not only to fund directly, but also refused to make land grants to the project. War and trade shut the economy down, and diverted political agendas away from big expensive projects.

The reality that some of the War of 1812 was fought in Western and Upstate New York put a kibosh on any construction project until War’s end. Accordingly, it was not until peace was achieved in 1815, that the old leadership in the canal commission resurrected their boldness and their plan. With Clinton’s prospects to be governor increasing, canal advocates were able in 1815-6 to secure legislation and appropriate to begin construction. Construction actually commenced on July 4th, 1817.  A final note: the politics behind the DeWitt Clinton-led Erie Canal and the approval/ implementation of the Canal by the New York State Legislature is again picked up in our module on the New York Policy system. A smush paragraph such as the reader has just read, obscures some larger lessons on how culture and politics affected the making of MED policy–the emerging two party system affected New York differently than Washington D.C., or the southern states. The Canal proved to be a last hurrah to the older, patrician-led Articles/Federalist policy system. By the time the Canal opened in 1825, a new New York Policy system was taking shape and Clinton himself retired that year.

Wrap Up and Segue Way

The Erie Canal was the page-turner–the breakout infrastructure that opened up the western economy. No one except Clinton and fellow enthusiasts had  believed in it. America in 1816 (when Erie Canal construction started) had constructed only 100 miles [i] of canals–by 1840, the nation had 3000. Warner states that canals were built in two spurts, from 1815 to 1834, and from 1836 to 1854. The first burst connected Atlantic coast port cities with cities in the interior. The second burst, built off the earlier canals connected the interior area to other interior geographies (Sam Bass Warner, (the Urban Wilderness, 1972, pp. 67-8).

The 360 mile Erie Canal, DeWitt Clinton’s “eighth wonder of the world”, or if one prefers Clinton’sFolly” or “Big Ditch” was the inspiration for the subsequent canal craze. Connecting New York City to the Great Lakes the canal opened up in 1825 rich agricultural lands of the upper Midwest to Atlantic coast ocean and coastal commerce–reducing transportation costs by 90%. “Three hundred and sixty-three miles long, forty feet wide and four foot deep, the canal rose and descended a distance of 660 feet [elevation] through eighty-three massive stone locks, and passed over eighteen stately aqueducts,” a full two years ahead of schedule” [88] (Gotham, p. 40). An opening boat tour, extravaganzas at each major city en route, and a symbolic pour of water from the Atlantic into Lake Eire (and vice versa) (wedding of the waters it was called), followed by huge NYC parade, steamboat revue, City Hall in lights (candles and oil lamps)–and fireworks. Presidents Madison or Monroe were not in attendance.

The Erie Canal Corporation, a state-financed project, designed, lobbied, then dug by a state-chartered commission, cost seven to nine million dollars. The Canal Corporation was initially approved in 1805 to chase the promise of federal, Jefferson administration internal improvement dollars. Hopes prove eternal, it encapsulated the dreams of many to build a canal to Lake Erie; it rose from the ashes of a previous major canal-building effort (Western Inland Lock Navigation Company) and went through a decade-long gestation period–which is best not described, as it was even more ridiculous than today’s convoluted quest for the lithium battery. A state-chartered developmental infrastructure corporation, which from the get-go it was mostly public, and not much of a hybrid.

Lacking any hope of private financing in 1806, it was built with State of NY bonds sold to financial markets and the general public. Construction started in 1816-7 and the Canal opened for business in 1825-6. Nine years after opening (1837), Canal Corporation revenues paid off the outstanding construction bonds[iii]. Just in time as we shall later see.

The Erie Canal was an immediate success; it captured grain from the newly-settled Midwest which was sent by lake to Buffalo, to the Canal’s terminus in Albany, and ultimately to NYC for transshipment. NYC’s economic growth explosion in this time period was due to several factors, but the Erie Canal was a major one. That massive piece of infrastructure thrust NYC into “world city status”. Left largely unappreciated the Canal anchored a series of hugely-successful city-building initiatives that settled Upper New York and made Upper New York the most populous region in the 1830 nation. Upstate New York, in effect became a nearly 400 mile long transshipment zone.

The immensity of the Erie Canal, the fool-hardy risk it assumed, the nearly generation-long authorization, massive financing needs, and incredibly-complex construction difficulties, the project produced several sticker shocks and seeming near collapses, and many soon-to-be-proven wrong media outbursts. Its success was unexpected, and threatened immediate woe to neighboring naysayers. Whatever people thought of it, the Erie Canal forced neighboring states and their localities to devise their own response, or forever be locked underneath NY and NYC’s growing shadow