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 THE WABASH TRADE ROUTE IN 
 
 THE DEVELOPMENT OF THE 
 
 OLD NORTHWEST
 
 THE WABASH TRADE ROUTE IN 
 
 THE DEVELOPMENT OF THE 
 
 OLD NORTHWEST 
 
 BY 
 
 ELBERT JAY BENTON 
 
 Reprinted by permission of the Johns Hopkins Press 
 from Johns Hopkins University Studies 
 in Historical and Political Science, 
 Series XXI, Nos. 1-2, January- February, 1903 
 
 ij»U.
 
 
 *»- 
 
 BL ^ wfek bj# 
 
 Ht % Hi Hk Gordon Re 
 
 ^™ Walter Honauer 
 
 Willard Sfiambough 
 
 public J^ iWcwi £<mxa i&t^fllen Coumu 
 
 The members of this Board include the members of the Boord of Tr 
 
 Gerold W. Morsch 
 
 James E- Grah< 
 
 Mrs. Front Dulin 
 
 Mrs. Charles Reynolds
 
 32L-H2 
 
 4^ 
 
 FOREWORD 
 
 From the mid-seventeenth to the early nineteenth centuries, 
 the Wabash trade route in the Old Northwest comprised a chain of 
 natural waterways from Lake Erie to the Mississippi River. Later 
 the Wabash and Erie Canal formed an important link in the route. 
 
 The following publication by Elbert Jay Benton, detailing 
 the influence of waterways in the growth of the Northwest Terri- 
 tory, originally appeared in the Johns Hopkins University Studies 
 in Historical and Political Science, series XXI, nos. 1-2, January- 
 February, 1903. 
 
 The Boards and the Staff of the Public Library of Fort Wayne 
 and Allen County gratefully acknowledge the kind permission of the 
 publisher to reprint the study and present the account in the hope 
 that it will prove interesting to residents of the area.
 
 CONTENTS 
 
 PAGE 
 
 Preface 7 
 
 Chapter I.— Early History of the Wabash Trade Route . . 9 
 
 Chapter II.— The Wabash and Erie Canal 32 
 
 The Origin and Federal Character 32 
 
 Organization and Construction as an Interstate Enterprise . 45 
 As the Trunk Line of a General System of Internal 
 
 Improvements 50 
 
 Mismanagement and Collapse in the Panic of "1837" . . 57 
 
 The Butler Bill : Repudiation or Resumption 63 
 
 The Administration of the Trust 74 
 
 Chapter III.— Influence on the Development of the Old 
 
 Northwest 89
 
 PREFACE 
 
 Artificial and natural waterways have exerted a definite 
 influence in the history of the Old Northwest. They have 
 promoted and directed the westward movement of popu- 
 lation and made possible the development of its resources. 
 The advantages which the waterways offered to commerce 
 stimulated settlement along their shores. When supple- 
 mented by Indian trails and later by white men's turnpikes, 
 these trade routes formed a network fairly covering the 
 region. The measurement of this factor in the history of 
 the Old Northwest has been the general object of this 
 research, though as a contribution to the subject the 
 present paper has been limited to an intensive study of 
 one only of the main waterways. 
 
 During the period of French, British, and American 
 occupation of the Northwest territory, the Wabash route 
 was one of the natural waterways from the lakes to the 
 Mississippi river. The principal links in this chain were 
 Lake Erie, the Miami river, the Wabash river, with the 
 portage connecting them, and the Ohio river. Later, 
 after state governments had been established in this region, 
 a canal known as the Wabash and Erie canal paralleled 
 the earlier natural waterway from Lake Erie to the Ohio 
 river. Such is, in brief, the scope of this inquiry. 
 
 Acknowledgments are due the many individuals who 
 have so kindly given assistance; especially to Mr. W. E. 
 Henry, state librarian of Indiana, for making so easy and 
 pleasant the use of the valuable documentary materials in
 
 8 
 
 the state library; to Col. R. S. Robertson, of Fort Wayne, 
 for the use of his private collections, and for repeated assist- 
 ance in other ways. Thanks are similarly due to Judge 
 Howe and Rev. M. L. Hayne, both of Indianapolis ; to Mr. 
 Geo. A. Baker, secretary of the Northern Indiana Historical 
 Society, and to Mr. Geo. S. Cottman, of the Indianapolis 
 press. Very many letters of inquiry have been written to 
 men connected in various ways with the earlier history of 
 their respective communities and satisfactory replies have 
 been uniformly received. It is pleasant to record the en- 
 couragement everywhere received while conducting this 
 series of investigations. Dr. Vincent, Dr. Hollander, Dr. 
 Willoughby, and Dr. Ballagh, of the Johns Hopkins Uni- 
 versity, have very kindly read this in whole or in part and 
 have made many suggestions as to subject matter or 
 method of treatment which have been adopted. Further 
 acknowledgments will be found in the footnotes.
 
 THE WABASH TRADE ROUTE IN THE 
 
 DEVELOPMENT OF THE OLD 
 
 NORTHWEST 
 
 CHAPTER I 
 THE EARLY HISTORY OF THE WABASH TRADE ROUTE 
 
 One of the most evident facts in the history of the 
 French in America is the influence exerted by various 
 waterways in distributing and directing the course of their 
 settlements. When France obtained control of the lower 
 St. Lawrence, its possession of the entire basin and of the 
 Mississippi valley was a logical sequence. With Quebec 
 established, the empire of New France became inevitable. 
 The great waterways led the hardy voyagers continually 
 further inland, though the implacable hostility of the Iro- 
 quois Indians restricted them for a time to the more 
 northern water routes. 
 
 The earliest expeditions from the French settlements on 
 the St. Lawrence to the upper lakes followed the course of 
 the Ottawa river rather than the upper St. Lawrence. Suc- 
 cessive expeditions pushed the route farther west until 
 under the leadership of such intrepid explorers as Jean 
 Nicollet, Allouez, and Marquette there was developed about 
 the middle of the seventeenth century what may be regarded 
 as a westward highway for the French, continuous from the 
 settlements on the lower St. Lawrence to the Mississippi 
 valley. 1 The voyagers' canoes followed the Ottawa river 
 
 1 Jean Nicollet probably reached the portage of the Wisconsin in 
 1634; Allouez penetrated to the same point in 1670; Marquette used
 
 10 
 
 from Montreal, then by portage to Lake Nipissing, and to 
 Georgian bay, an eastern arm of Lake Huron, and thence 
 by the northern lakes to Green bay, the Fox, and by port- 
 age to the Wisconsin and Mississippi rivers. It was the 
 most natural route because in every way it was the line of 
 least resistance. It avoided the near approaches to the 
 Iroquois Indian limits 2 and led directly to the numerous 
 Indian haunts around the greater lakes. As the objective 
 point for the westward expeditions was gradually moved 
 farther south into the Mississippi basin, shorter routes 
 across the territory, later known as the Old Northwest, 
 were used. The Wisconsin portage soon yielded in point 
 of frequency of use to those at the south end of Lake 
 Michigan. The route up the Illinois river and by portage 
 into the Chicago river and Lake Michigan was followed 
 by Joliet and Marquette on their return from the discovery 
 of the Mississippi. 3 A few years later La Salle followed 
 the coast of Lake Michigan to the St. Joseph river and up 
 that stream, thence by a portage to the Kankakee, and so 
 again to the usual destination — points on the Illinois and 
 the Mississippi.* 
 
 About this time, in the course of the evolution of new 
 routes leading to the Mississippi, occurred the first use of 
 the Wabash river by white explorers. This stream was 
 occasionally reached in the earliest period by leaving 
 Lake Michigan on the St. Joseph river and then by a 
 short portage to the headwaters of a northern branch of 
 
 the Fox-Wisconsin portage in his expedition to the Mississippi river 
 in 1673. See Butterfield, History of Discovery of Northwest by 
 John Nicollet, p. 68; Jesuit Relations, 1670, (Thwaite), p. 231; and 
 ibid., 1673-7, P- 105. 
 
 2 The Iroquois nations controlled the territory represented by 
 western New York, western Pennsylvania and the whole of Ohio; 
 or more loosely and perhaps in closer conformity to the facts in 
 the case, that region to the south of the lower lakes. 
 
 3 Jesuit Relations, 1673-7, P- l( >i ; Cp. map of Franquelin, 1684, 
 in Winsor, Narrative and Critical History, IV, pp. 224, 209; Shea, 
 Mississippi Valley, p. xxxii. 
 
 * 1679 ; Shea, Mississippi Valley, p. xxxvi.
 
 11 
 
 the Wabash, but the more important way to reach it was 
 by the " Miami river of Lake Erie " and a short portage." 
 Of the five great portage routes," this was the last one to 
 come into general use by the whites. It proved to be the 
 shortest route connecting the lower French posts on 
 the Mississippi with those on the St. Lawrence and has 
 been quite happily called the Indian Appian way. 7 It was 
 a common highway for the various Indian tribes of the 
 Northwest. The French routes were in almost all cases 
 the watercourses, portage paths, or overland trails in 
 earlier use by the Indians, who now became the guides. 
 The portage from French creek to the Alleghany was 
 used by La Salle, but its importance dates from a much 
 later period, when it came to connect strategic points on 
 the English frontier. In the race with the English for 
 the occupation of the interior, the French gradually drew 
 the cordon tighter. The paramount task for them was to 
 keep in ready and rapid communication with one another 
 and with outlying posts their two commercial and political 
 centers. Quebec and New Orleans. 
 
 The discovery of a portage connecting two rivers leading 
 into new regions was always a most valuable discovery for 
 the French. Such a chain of rivers was to them a ready- 
 made road, opening at once all the adjacent territories with- 
 out the difficulties of overland trails. It is, however, alto- 
 
 8 " The Miami river of Lake Erie " was later known as the 
 Maumee river. 
 
 "Winsor, Narrative and Critical History, IV, p. 224, gives the 
 following : 
 
 (a) Green Bay, Lake Winnebago and Fox river to the Wisconsin 
 river and to the Mississippi. 
 
 (b) From the upper end of Lake Michigan, the Chicago river, 
 and a short portage to the Des Plaines and Illinois rivers. 
 
 (c) The St. Joseph of Lake Michigan, a portage to the Kankakee 
 and so to the Illinois river again. 
 
 (d) The St. Joseph river to the Wabash by a longer portage and 
 then down to the Ohio and Mississippi. 
 
 (e) The Miami of Lake Erie, a portage to the Wabash and down 
 as above. 
 
 7 John Reynolds, Sketches of the country on the Northern route, 
 p. 151.
 
 12 
 
 gether probable that the question of the first use of the 
 Wabash trade route will have to remain unsolved. There 
 is the barest possibility that Sanson indicates a knowledge 
 of the Maumee and Wabash rivers with the connecting 
 portage in his map of Canada, 1657. 8 Probably more than 
 one unnamed traveler launched his boat on these streams but 
 it remained for La Salle and Allouez to give to the 
 French a permanent interest in this route. The former 
 pointed out its trade value and the latter added an interest 
 in the missions to the Miamis tribes. But here again it is 
 a difficult problem to determine the source of the knowledge 
 of these two fearless explorers. 
 
 Many have tried to trace La Salle's voyage of 1670 by the 
 Wabash river. 9 Joliet's map of 1674, 10 which locates La 
 Salle's route by way of Lake Erie and the Wabash, has 
 been used in support of this contention. But the route laid 
 down is clearly a later interpolation and adds nothing di- 
 rectly to the argument. It is, however, most significant 
 that within a few years La Salle had become in some 
 manner fully aware of this Wabash route and the advan- 
 tages it offered. During the years that he was in command 
 at Ft. Frontenac, he appears to have been evolving great 
 schemes for appeasing the Iroquois and for opening up an 
 easy channel of trade to the Mississippi valley by the 
 Maumee and Wabash ; u but by 1682 he seems to have tem- 
 porarily abandoned this plan, " because," he says, " I could 
 no longer go to the Illinois but by the Lakes Huron and 
 Illinois, as the other routes which I have discovered by 
 
 8 R. S. Robertson, American Antiquarian, Vol. II, p. 123. A 
 reduced copy of this map is found in ibid., Vol. I, p. 233. 
 
 " Parkman, who is generally followed now on this question, holds 
 that La Salle's expedition was by the Alleghany portage to the 
 Ohio river. Shea's Translation of Charlevoix [History of New 
 France, Vol. Ill, p. 198], accepting the same view, places the date, 
 however, as 1671. For an excellent discussion of other theories, 
 see Justin Winsor, Cartier to Frontenac, p. 224. 
 
 10 Justin Winsor, Narrative and Critical History, Vol. IV, pp. 
 212-3. 
 
 u Winsor, Cartier to Frontenac, p. 256.
 
 13 
 
 the head of Lake Erie and by the southern coast of the 
 same, have become too dangerous by frequent encounters 
 with the Iroquois who are always on that shore." u 
 
 La Salle's description of the territory between Lake Erie 
 and Lake Michigan indicates a familiarity with this region 
 scarcely possible save from personal observation. In a let- 
 ter written November 9, 1680, he says, " There is at the end 
 of Lake Erie ten leagues below the strait a river by which 
 we could shorten the route to the Illinois very much. 
 It is navigable to canoes to within two leagues of the 
 route now in use." ] These facts make La Salle the 
 explorer of the regions represented by our study. The 
 question as to whether his knowledge began with the expe- 
 dition of 1670, or whether, at that time, he merely skirted 
 the territory on the south, entering the Ohio river farther 
 to the east, and gained his information of the Wabash coun- 
 try while returning to the St. Lawrence from a later expe- 
 dition, remains unsettled, though the latter view seems to 
 me altogether the more probable. However, in either case, 
 the French claim to these lands in so far as based on explo- 
 rations is traceable to him, and his representations were the 
 first to direct the attention of the French to the regions 
 south and west of Lake Erie." 
 
 The claim that Allouez as a missionary to the Miamis at 
 this time, 1680, must necessarily have visited these regions 
 seems to be based on a misconception of the situation of the 
 Miamis tribes which were then located near Lake Michigan 
 and southward therefrom. 15 No evidence has been found to 
 show that Allouez ever penetrated the regions southeast 
 beyond the immediate environs of Lake Michigan, yet there 
 is a strong likelihood that he did. The Miami Indians mi- 
 
 " Margry, Decouvertes des frangais dans L'Amerique Septen- 
 trionale, Vol. II, p. 296. Subsequently cited under author only. 
 
 " Ibid., Vol. II, p. 98. 
 
 " Margry, Vol. I, pp. 377-8 ; N. Y. Col. Docs. Vol. X, pp. 243, 293, 
 383 ; Fiske, The Discovery of America, Vol. II, p. 534. 
 
 "Jesuit Relations, Vol. XLIV, pp. 247, 324; Vol. LXIX, p. 300; 
 Charlevoix, p. 186; N. Y. Col. Docs., Vol. IX, pp. 890-1.
 
 14 
 
 grated soon after this date to the headwaters of the Wabash 
 river and the French mission followed them, and this mis- 
 sion became the cause of many expeditions to the Wabash 
 country. 
 
 The very erroneous conceptions of the course and loca- 
 tion of the various tributaries of Lake Erie and the Ohio 
 river, prevailing for more than a half century following, is 
 evidence beyond question that any explorations in that di- 
 rection in the seventeenth century were of a hasty and de- 
 sultory character. The northern streams and upper lakes 
 are accurately drawn on the early French maps long before 
 a similar accuracy appears in the south. 16 Franquelin's 
 map of 1682 places the Wabash river as a stream running 
 due west of its course, forming a confluence with the Illi- 
 nois river. 17 This and Colvert's map 18 confuse the Wabash 
 and Ohio rivers, making only one stream to drain from 
 east to west the territory now comprised in the states of 
 Ohio and Indiana. Hennepin's map of 1683 1B makes Lake 
 Erie to extend oblong north and south rather than east 
 and west as far as the parallel of the mouth of the Ohio. 
 Thus it covers the entire states of Ohio and Kentucky. 
 Nor does the same author alter this in his map of 1697. 20 
 
 A much greater degree of accuracy as to the Wabash and 
 Ohio rivers and Lake Erie is attained in Franquelin's map 
 of 1684. 21 His map of 1688 is one of the earliest showing 
 the portage by way of the " River des Miamis of Lake 
 Michigan " " and the Wabash river. The " Coronelli et 
 Tellemon " map also shows that this portage from Lake 
 Michigan was known. None of the cartographers indi- 
 
 18 B. A. Hinsdale, The Old Northwest, p. 28. 
 
 17 Winsor, Narrative and Critical History, Vol. IV, p. 227. 
 
 18 Winsor, The Mississippi Basin, p. 28. 
 
 19 Winsor. Narrative and Critical History, Vol. IV, p. 249. 
 
 20 Ibid., IV, p. 253. 
 
 21 Ibid. Vol. IV, p. 228. Cp. D'Anville's map of La Salle's ex- 
 plorations of about same date, reproduction in Andreas, A. T., 
 History of Chicago, pp. 58-9, Chicago, 1884. 
 
 22 Later called the St. Joseph river.
 
 15 
 
 cates a knowledge on the part of the author of any Lake 
 Erie portage until well into the eighteenth century." 
 
 French colonization was slow. The trader opposed 
 agricultural settlements because they destroyed his trade; 
 the Jesuit was often hostile to them because they destroyed 
 his mission fields. The French posts were generally little 
 more than military garrisons. But slowly and deliberately 
 during the closing years of the seventeenth century and 
 the first half of the eighteenth, the French line of con- 
 trol was drawn closer to the English frontiers. The plun- 
 dering expeditions of the Iroquois to the south of Lake 
 Erie were the most serious check on this process of east- 
 ward expansion. The Erie Indians, inhabiting the region 
 of the Ohio and Indiana portages, were wholly destroyed 
 by the Iroquois shortly before the discovery of the Missis- 
 sippi by the French. 24 and these hostile tribes took posses- 
 sion of Lake Erie and its southern environs. For the re- 
 mainder of the seventeenth century the weak hold of the 
 French on the interior offered little opposition to Indian 
 raids. The Iroquois practically controlled these lands and 
 the French made little use of the waterways leading from 
 Lake Erie to the south and west. 25 
 
 A series of events at the beginning of the eighteenth cen- 
 tury completely changed the course of French history in 
 the West. Differences between the Fox Indians, located 
 to the west of Lake Michigan, and the French alienated the 
 
 28 Winsor, Narrative and Critical History, IV, pp. 230-232. 
 
 " " The Eries were extirpated by the Iroquois above a century 
 past, from which time they have been in possession of Lake Erie.'' 
 This legend is found on a map in Bowen and Gibson, " North 
 America," London, 1763. Cp. Charlevoix, History of New France, 
 Vol. I, p. 226; Jesuit Relations, 1654, P- 9! ibid., 1660, p. 7; Force in 
 the Historical and Philosophical Society of Ohio Publications fixes 
 the date at 1656. 
 
 28 The Iroquois devastations of about 1667 extended west to the 
 Illinois. Charlevoix, History of New France, Vol. Ill, pp. 107, 205; 
 Winsor, Narrative and Critical History, IV, p. 225 ; ibid, for La 
 Houtan's map, p. 258; Mag. West. History, I, p. 41; Western Re- 
 serve Hist. Tracts, No. 40; J. H. Perkins, Memoirs and Writings, 
 Vol. II, p. 186.
 
 16 
 
 former completely. For nearly half a century this hostility 
 effectually checked the growth of French trade and occu- 
 pation in the Wisconsin regions. The result was to impel 
 the French to strengthen a more direct connection with the 
 Mississippi settlements than by the Wisconsin and Lake 
 Michigan, to secure more fully the less remote posts, and 
 to foster trade in this direction. A change of policy was at 
 once resorted to. The French along Green bay and in the 
 other posts west of Lake Michigan were recalled and 
 nearer posts were strengthened. 26 
 
 Cadillac wrote to Count Pontchartrain at this time : 
 " The forces of the French are too much scattered ; they 
 live too far apart. It is absolutely necessary to draw them 
 together." !T And at this opportune moment Cadillac pre- 
 sented his plan for a settlement on the strait connecting 
 Lake Erie with Lake Huron. Cadillac argued further in 
 an interview with Count Pontchartrain the importance of 
 attracting the friendly Indians around such a French post 
 and building up a bulwark against the advances of the 
 Iroquois, with the further purpose of cutting off their 
 western fur trade and ultimately of conquering them. In 
 addition, he argued the need of anticipating the encroach- 
 ments of the English in these regions. 28 Cadillac's plan 
 met with a favorable reception in France ; Fort Pontchart- 
 rain, the Detroit post, was founded in 1701, and the key 
 to a new course for French expansion was established. 
 
 Another event of importance to the success of Cadillac's 
 scheme was the migration of the Miamis Indians eastward 
 from the head of Lake Michigan to the headwaters of the 
 Maumee and Wabash rivers. This movement seems 
 to have been a gradual migration of the various tribes 
 composing this confederacy towards those hunting 
 grounds so long abandoned as a consequence of the 
 
 M Turner, The Fur Trade of Wisconsin, pp. 35-36. 
 S1 Sheldon, E. M., Early History of Michigan, p. 85, New York, 
 1856. Almost entirely made up of translations of documents. 
 28 Ibid. p. 85; Margry, Vol. V, pp. 135-250, especially p. 195.
 
 17 
 
 Iroquois wars and raids. The hostility of the Wisconsin 
 Indians, the advantages of the French trade, and the value 
 of the new regions were factors almost equally strong 
 forcing this change. By 171 2 the Miamis Indians had 
 taken possession of the entire upper Wabash valley, 28 and 
 gradually spread over the country eastward from that as 
 far as the Big Miami river in Ohio. 30 Other tribes settled 
 farther east: the Wyandots migrated there about 1701 ; 
 the Shawnee in 1740; the Delawares in 1749 or 1750. 
 Altogether about 12,000 Indians were located in Ohio and 
 Indiana by 1750. These tribes were generally friendly 
 to the French and continued to be an effectual barrier to the 
 Iroquois raids. 31 The value of their trade and their aid 
 promoted the growth of a line of forts on the Wabash 
 leading to the lower Mississippi posts. 32 
 
 The idea of a line of forts connecting Canada with the 
 West and South became a favorite scheme of the French 
 government at an early day. La Salle's correspondence 
 with the ministers of Louis XIV contains a suggestion for 
 such a policy. 33 The fear of English participation in a 
 valuable fur trade and the enterprise of French merchants 
 
 29 The gradual migration of the Miamis Indians eastward from 
 the Mississippi, across southern Wisconsin and northern Illinois, 
 around the head of Lake Michigan and their settlement around De- 
 troit, and on the Wabash, Maumee, and Miami rivers can be readily 
 traced from the writings of French officers, missionaries, and trav- 
 elers. 
 
 30 Jesuit Relations, LXIX, pp. 299-300, N. Y. Col. Doc, Vol. IX, 
 pp. 885-892 ; The Fergus Historical Collection, No. 27, p. 107 ; Wis- 
 consin Historical Collection, Vol. VII, pp. 123-187; Journal of 
 Captain Trent, p. 15. 
 
 81 The fighting force of the Miamis Indians numbered at this time 
 not far from 1400 warriors. The estimate of 8000 men made in the 
 Jesuit Relations, Vol. XLIV, pp. 247, 324, is undoubtedly a gross 
 exaggeration. See Hutchins, Topographical Description, p. 66, 
 London, 1778; N. Y. Col. Docs. Vol. IX, p. 891. 
 
 "Journal of Captain Trent, p. 13; Albach, Annals of the West, 
 p. 80; Ind. Hist. Soc. Pub., Vol. I, No. 4, pp. 132-3; Fergus, His- 
 torical Collection, No. 27, p. 107; Winsor, Narrative and Critical 
 History, Vol. IV, p. 212, (map). 
 
 " Old Fort Chartres, p. 23, No. 12 of Fergus Hist. Collection, 
 Chicago, 1881. 
 2
 
 18 
 
 had far more to do with the establishment of these posts 
 than any far sighted imperial policy, but back of every 
 individual adventure, nevertheless, stood the French gov- 
 ernment desiring to build up a New France in the wilder- 
 ness beyond the mountains and thus anticipate any west- 
 ward ambitions of its inveterate rivals, the English. 
 There was a clear cut policy of France for colonial expan- 
 sion that became evident in its dealings with America as 
 early as 1690. Mercantile adventurers took the first steps 
 in winning the valleys of the Northwest for the French, 
 but the French government was always ready to reap the 
 fruits of individual enterprise. 
 
 The early records repeatedly show that the French by 
 increasing the number of posts were struggling for new 
 markets." " To maintain the trade in beaver skins " was 
 the avowed object. 85 The directors of the Company of the 
 Colony of Canada, having a monopoly of the fur trade at 
 Fort Frontenac and Detroit, represented that the burdens 
 imposed upon them for this privilege were too heavy 
 and asked, as a partial remedy, for an extension of their 
 monopoly by the establishment of more trading posts. 
 One among the Miamis, and another at the mouth of the 
 Ohio were among those urged.* 8 Such motives prevailed. 
 Kaskaskia had been settled in the last century, and, under 
 this new impetus given to the planting of trading posts, 
 the mouth of the Ohio was selected as a suitable point." 
 This site was not well chosen; it proved to be an unhealth- 
 ful location and was abandoned in its second year. 
 
 The chief village of the Miamis became one of the ear- 
 liest posts in the line to the southwest of Detroit on the 
 
 " Margry, Vol. V, pp. 175, 195, 227, 353, 356-360; Vol. VI, p. 658. 
 
 " Ibid., Vol. V, p. 356. 
 
 "Letters of Directors, Nov. 10, 1701, Margry, Vol. V, pp. 175- 
 180, 360-367. 
 
 3 ' This was called Fort St. Vincent, but it is not to be confused 
 with the later post on the Wabash known as Vincennes. Fort St. 
 Vincent was founded in 1702, abandoned in 1704. Dunn, Indiana 
 P- 39; Craig, Ouiatanon, pp. 331-2.
 
 19 
 
 Wabash route. It was, in fact, an outpost of the Detroit 
 colony. No garrison seems to have been stationed there 
 nor did it ever attain, under the French occupation, a 
 greater degree of dignity than to be an Indian trading post 
 and the chief village of an Indian confederacy. 88 In 1719 
 or 1720 another post was established farther down the 
 Wabash in the midst of the Ouiatanon Indians. This was 
 a military post established by Sieur Dubuisson with a 
 garrison from Canada. 39 Some years later while Sieur. de 
 Yincennes was in command at Ouiatanon that garrison 
 with the district below was placed within the limits of 
 Louisiana, and Sieur de Vincennes was ordered to estab- 
 lish a fort lower down on the Wabash, and " Au Post," or 
 "The Post," not known until after 1752 as Vincennes, was 
 founded in 1727.* Other posts established during these 
 years completed the chain of forts connecting Canada with 
 Louisiana. Fort Chartres in 1720 and Fort Niagara in 
 1726 were among the more important.* 1 
 
 Wherever there existed a group of Indian villages, such 
 a point determined the location of a French garrison or 
 trading post." Where, on the other hand, no important 
 Indian villages previously existed to make the trade im- 
 mediately remunerative, but where the strategic importance 
 of a place itself made it necessary to plant a fort as at 
 Detroit, one of the earliest concerns of the colonial policy 
 of the French was to attract Indian tribes to take up their 
 residence in the immediate vicinity. 43 This policy offers a 
 
 38 Fort Wayne was established at this point by the military forces 
 of the United States. 
 
 59 N. Y. Col. Docs. Vol. IX, p. 894; Craig, Ouiatanon, Ind. Hist. 
 Pub. Vol. II, p. 329. 
 
 40 Mag. of Am. Hist., Vol. XXI, p. 392, and XXII, pp. 146-7 ; Craig, 
 Ouiatanon, p. 331. 
 
 41 Cohokia, St. Philip, Prairie du Rocher, and St. Genevieve were 
 smaller posts in Illinois established at this period. Monette, Valley 
 of the Mississippi, Vol. I, pp. 166, 167. 
 
 42 N. Y. Col. Docs., Vol. IX, p. 891. 
 
 **Margry, Vol. V, Letter of Cadillac, Aug. 31, 1703; Sheldon, His- 
 tory of Michigan, pp. 102, 150; Burton, Detroit under Cadillac, p. 
 14, Detroit, 1896.
 
 20 
 
 striking contrast to the English method of displacing and 
 removing to the most remote places possible such tribes as 
 came in their way. Presents of goods and brandy were 
 used by the French to draw the Indians to their posts " and 
 numerous bands gathered around Detroit. 45 The influence 
 of this policy was clearly to lower the character of the 
 French colonists. Brought in close contact with the Indi- 
 ans, accustomed to their shiftless life, associating with them 
 almost on an equality, the French early yielded to their 
 vices and excesses. 
 
 Cadillac founded Detroit as a private mercantile adven- 
 ture, but before the fort was completed the Company of 
 the Colony of Canada obtained a monopoly of the trade." 
 This company paid heavy duties in France for its exclusive 
 rights, while individual traders in Canada were restrained 
 from selling to any but the company's agents. 47 In De- 
 troit Cadillac regained for himself as commandant of the 
 post the monopoly of trade in 1705. 48 From this time on 
 the trade rights rested exclusively with the commandant 
 who, in turn, frequently regranted these special privileges 
 to individuals or companies. 48 
 
 It was the policy of the French government to make 
 such posts in the west self-supporting. 50 Similar efforts 
 
 44 Many cases are given by Cadillac in his defense before Count 
 Pontchartrain. Sheldon, Michigan, pp. 190-5. 
 
 45 The Hurons settled near Detroit numbered 100 men ; the Pou- 
 touatamies 180; the Outaouaes about 100 men; other tribes as the 
 Oppenagos and the Miamis were represented. Cp. N. Y. Col. Docs. 
 IX, 888 ; Sheldon, Michigan, pp. 190-5 ; Burton, Detroit under Cadil- 
 lac, p. 14. 
 
 46 Margry, Vol. V, pp. 135-250, 301-336, 360-367; N. Y. Col. Docs., 
 Vol. V, p. 733; Mag. West. Hist., Vol. V, p. 66; Burton, Detroit 
 under Cadillac, pp. 17-20; Farmer, Detroit, Vol. I, p. 765. 
 
 47 N. Y. Col. Docs., Vol. V, p. 733 ; Sheldon, Michigan, pp. 93-98, 
 157; Mag. West. Hist., Vol. V, p. 66. 
 
 48 Sheldon, Michigan, pp. 138-9; Burton, Detroit under Cadillac, 
 p. 16. 
 
 49 The Cass MSS. in Wis. Hist. Col., Vol. Ill, pp. 169-179; Shel- 
 don, Michigan, p. 150; N. Y. Col. Docs., Vol. IX, p. 742. 
 
 60 The Cass MSS., p. 167; N. Y. Col. Docs., Vol. V, p. 727; Shel- 
 don, Michigan, p. 150; Burton, Detroit under Cadillac, pp. 7-8; and 
 Turner, The Wisconsin Fur Trade, p. 31.
 
 21 
 
 were made, not without success, to make the profits of the 
 fur trade support even the minor exploring expeditions." 
 At Detroit the commandant was charged with the mainte- 
 nance of the officers and soldiers of the fort together with 
 the expense of an almoner, the surgeon and the medicine 
 necessary to the sick, the transportation of provisions and 
 clothing for officers and men, presents for Indians, a mis- 
 sionary, blacksmith and armorer. The equipment and 
 clothing only were paid for by the government of France." 
 
 The commandant's monopoly did not extend to " the 
 little ordinary trade " with the Indians, to the exchange of 
 such commodities as one might produce on his own land.** 
 Only the commandant or those having licenses from him M 
 could import merchandise for the Indian trade. The place 
 of this trade in the royal economic policy toward the posts 
 was set forth in the following declaration : " The Gov- 
 ernor and other officers have but a scanty allowance from 
 the King and could not subsist were it not by the perqui- 
 sites they have from this trade. Neither could their priests 
 find any means to satisfy their ambition and luxury without 
 it. So that all heads and hands are employed to advance 
 it (fur trade)." 55 
 
 At the other posts of the French in Louisiana and New 
 France a similar policy of merchant-company and com- 
 mandant trade monopolies was pursued — at Vincennes, 
 Ouiatanon, Kaskaskia, and elsewhere. 56 The effect of this 
 policy of the French was harmful to the prosperity of the 
 various settlements. Volney, a French traveler, visiting 
 
 51 Margry, Vol. I, pp. 293-6 ; Vol. V, pp. 503-7 ; N. Y. Col. Docs., 
 Vol. IX, p. 167; American State Papers, Vol. VI, p. 65. 
 
 52 Cass MSS., Wis. Hist. Col., Vol. Ill, p. 167. 
 88 Ibid., pp. 168-179. 
 
 64 Traders paid from 400 to 500 livres per year for this privilege. 
 Beckwith, Notes on the Northwest, p. 215. Henry, Travels and Ad- 
 ventures in Canada, 1760-1776, p. 173. Cass MSS., Wis. Hist. Col., 
 Vol. Ill, pp. 168-179; Burton, Detroit under Cadillac, p. 8. 
 
 58 N. Y. Col. Docs., Vol. V, p. 727. 
 
 "Jesuit Relations, Vol. LV, pp. 320-1; LXV, pp. 213-215, 225-9, 
 233, 237, 243-5, 272; Fraser's Report, Ind. Hist. Soc, Vol. II, p. 
 413; Monette, Valley of the Mississippi, Vol. I, pp. 162, 195, 238-9.
 
 22 
 
 these posts in 1796 when the fruits of the French system 
 were most apparent, wrote : " The nature of the govern- 
 ment in some measure contributed to this ; for at first when 
 French and afterward when Spanish, 57 being purely military, 
 the commanding officer is an aga or bashaw, who gives, 
 sells, or takes away at pleasure, privileges of importation, 
 exportation, purchase and monopoly of goods ; so that there 
 is no liberty of trade, or enjoyment of property and to 
 enrich two or three families the rest of the inhabitants are 
 rendered poor and destitute." M 
 
 The missions of the Northwest engaged alike in the fur 
 trade, contributing in part to their self-support; and, in 
 general, adopted the same business policy as the command- 
 ants had, letting for annual rentals the mission lands, and 
 granting licenses for the exclusive rights of the mission 
 forge or the mission store. 68 At the various military posts 
 the church was virtually the property of the commandant; 
 dependent entirely upon him for support. While the Com- 
 pany of the Colony of Canada held the monopoly of trade 
 it supported the missionaries at its posts, paying each one 
 800 francs per year, with clothing and transportation. 90 
 
 The posts of the Wabash country grew slowly in popu- 
 lation. Ouiatanon never became more than a trading post 
 and a fort for a military garrison. No land grants were 
 made as at the other posts, 61 and there was lacking, in con- 
 
 37 Volney is speaking of the Illinois settlements as well as Vin- 
 cennes. 
 
 58 Volney, Works, p. 371. 
 
 "Jesuit Relations, Vol. LXIX, pp. 241, 261, 267, 305; LXX, pp. 
 31-33; Margry, Vol. II, p. 251; N. Y. Col. Doc, Vol. V, p. 7W, 
 Turner, The Fur Trade in Wisconsin, p. 29; Parkman, The Old 
 Regime in Canada, p. 328 ff. 
 
 "Cass MSS., Wis. Hist. Col., Vol. Ill, p. 167; Letter of Cadillac, 
 Sheldon, Michigan, p. 102. 
 
 81 In connection with this subject the terms of land grants at De- 
 troit have considerable interest : " The grantee was bound to pay 
 a rent of fifteen livres a year in peltries to the Crown forever; to 
 assist in planting a May-pole, on each May-day, before the door of 
 the Mansion House. He was forbidden to buy or sell articles of 
 merchandise Carried to or from Montreal, through servants, clerks 
 or foreigners ; to work at the business of a blacksmith ; to sell
 
 23 
 
 sequence, the permanence which is only possible where 
 some system of land holding prevails." George Croghan 
 reported fourteen French families there in 1765." At 
 Miamis, the same authority reported nine or ten French 
 houses and at Vincennes eighty or ninety families, while 
 thirteen years later Hutchins found sixty houses. The two 
 reports indicate probably no change in the population of 
 the village for the two dates." Hutchins described Detroit 
 as " two long extended villages. The inhabitants, who are 
 mostly French, are about 2000 in number ; 500 of whom 
 are as good marksmen and as well accustomed to the woods 
 as the Indian natives themselves." 65 
 
 It is always difficult to determine the exact population 
 in a French post at any given time because of the constant 
 going and coming of the trading expeditions. Colonists 
 sent to these settlements soon grew discontented and set 
 off for more remote points. 05 In 1708 of the sixty-three 
 French settlers at Detroit only twenty-nine had taken lands, 
 while thirty-four were traders. Nor does the proportion 
 seem to have changed much later or at other posts. 67 Me- 
 chanics were seldom met in these frontier posts. 68 Agri- 
 brandy to the Indians, or to mortgage the land without the consent 
 of the government. The Crown reserved all minerals and timber 
 for military purposes. The grantor reserved the right of hunting 
 rabbits, partridges, and pheasants. All the grain raised was to be 
 ground at the manor wind-mill, where toll was to be given, according 
 to the custom of Paris. On every sale of land a tax was levied, 
 and the government reserved the right to take precedence of any 
 buyer, at the price offered." Michigan Pioneer Collections, Vol. 
 I, P- 352. 
 
 " Ouiatanon had no garrison after Pontiac's war and was prac- 
 tically abandoned. Craig, Ouiatanon, Ind. Hist. Soc. Vol. II, 
 
 P- 334- 
 
 " Journal of Geo. Croghan, Western Annals, p. 102. 
 
 01 Cp. Bonnecamp's Relation where he states that in 1749, he found 
 at Miamis 22 Frenchmen in 8 huts which " only the desire of making 
 money could make endurable." Jesuit Relations, Vol. LXIX, p. 189, 
 Vol. LXX, p. 235; Hutchins, Topographical Description, pp. 28-29. 
 
 85 Hutchins, Topographical Description, pp. 28-29. 
 
 "Jesuit Relations, Vol. LXIX, p. 193. 
 
 " 7 Sheldon, Michigan, p. 282. Monette, Valley of the Mississippi, 
 Vol. I, p. 192. 
 
 68 As an illustration of restrictions on mechanical pursuits : M.
 
 24 
 
 culture or the fur trade supplied the colonists with their 
 means of livelihood. The Illinois and Wabash posts were 
 favorably situated for agriculture and considerable advance 
 was made in this particular. Hutchins describing the set- 
 tlement at Vincennes says: "They raise Indian corn, 
 wheat, and tobacco of an extraordinary good quality — 
 superior, it is said, to that produced in Virginia. They 
 have a fine breed of horses (brought originally by the 
 Indians from the Spanish settlements on the western side 
 of the River Mississippi), and large flocks of Swine and 
 Black Cattle. . . . Apples, Peaches, Pears, Cherrys, Cur- 
 rants, Gooseberrys, Melons, etc. thrive well, both here, and 
 in the country bordering on the River Ohio." 8B The same 
 authority described the other posts of this region. His 
 view of Detroit shows some attention to agriculture there. 
 " For eight miles below and the same distance above Fort 
 Detroit, on both sides of the river, the country is divided 
 
 into regular and well cultivated plantations They 
 
 raise large flocks of black cattle and great quantities of 
 corn, which they grind by wind-mills, and manufacture 
 into excellent flour." ,0 
 
 From the Wabash settlements, 600 barrels of flour were 
 shipped to New Orleans in 1746. 71 Salt, beef, tallow, tar, 
 fur, bear's grease, flour, and pork were regularly sent to 
 New Orleans from the Wabash and Illinois settlements 
 together." But as in all French posts trade in agricultural 
 products was very little encouraged. 
 
 The posts were built to promote the fur trade and to that 
 industry the activities of the colonists were mainly limited. 
 
 Parent complained that he was required to pay 600 francs, 2 hogs- 
 heads of ale, and agree to shoe all of Cadillac's horses for the privi- 
 lege of engaging in the business of blacksmithing. Jesuit Relations, 
 Vol. LXIX, pp. 241, 267 ; Vol. LXX, p. 33. 
 
 69 Hutchins, Topographical Description, pp. 28-29. 
 
 70 Ibid. pp. 49-50. 
 
 71 Martin, Louisiana, Vol. I, p. 316; Monette, History of the Mis- 
 sissippi Valley, Vol. I, p. 166; Mag. Am. Hist. Vol. XXI, p. 394. 
 
 "Jesuit Relations, Vol. LXIX, p. 213; Monette, History of the 
 Mississippi Valley, Vol. I, P- 221.
 
 25 
 
 " The chief trade of Detroit consists in barter of coarse 
 European goods with the natives for furs, deer skins, tal- 
 low, etc." 73 A well known contemporary writer says : 
 "Around Detroit was one of the richest regions exploited 
 by the fur traders." Another traveler wrote at Vincennes 
 in 1765 : " The great plenty of furs taken in this country 
 induced the French to establish this post. . . . and by a 
 very advantageous trade they have been richly recompensed 
 for their labor." 74 
 
 No effort was made to keep any account of the value of 
 the fur trade carried on at the various posts and conse- 
 quently any attempt to measure this is dependent wholly 
 on occasional chance references. At Detroit 30,000 beaver 
 were killed in the three years, 1701-4/° while out of the 
 Wabash valley 20,000 skins were said to have been shipped 
 in 1702. Three years later 15,000 hides and skins were 
 sent out of the same region to one point, Mobile. 76 Thomas 
 Hutchins estimated, in 1778, the annual output from Ouia- 
 tanon at £8000, and at Vincennes at £5000." There is no 
 doubt that, in most places, the French enjoyed a large fur 
 trade, 78 and that there were enormous profits to the trader, 78 
 but the shiftless, dissolute habits of the traders and the 
 demands on the commandants for presents to appease the 
 Indians and the other requirements together with the cor- 
 ruption prevailing in official life from the lowest to the 
 highest prevented the colonists generally from acquiring 
 
 73 Hutchins, Topographical Description, pp. 49-50. 
 
 74 Croghan's Journal in " Western Annals," p. 103. 
 
 75 And this was at a time when every effort was being made to de- 
 crease the quantity of beaver furs taken and to increase that of other 
 furs. The beaver market was regarded as over-stocked. Sheldon, 
 Michigan, pp. 115, 152. 
 
 76 Monette, History of the Mississippi Valley, Vol. I, p. 162 ; Mag. 
 Am. Hist., Vol. XXI, p. 393. 
 
 77 Hutchins, Top. Des., p. 29 ff. ; Ind. Hist. Soc, Vol. II, p. 338. 
 
 78 N. Y. Col. Docs., Vol. VII, p. 787; Vol. IX, pp. 152-160, 662, 
 954-8. Captain Rogers found in the store at Detroit, in 1760, $500,- 
 000 worth of furs. Farmer, Detroit, Vol. I, p. 767. 
 
 79 Cadillac offered 10,000 livres for the exclusive right to the fur 
 trade at Detroit as early as 1703. Farmer, Detroit, Vol. I, p. 765; 
 Mag. West. Hist., Vol. V, p. 68.
 
 26 
 
 permanent wealth and in many cases even ruined the par- 
 ticipants. 80 The life of the trader was one of strenuous 
 activity for a short period followed by ruinous debauchery 
 at the end of the season. 81 
 
 The interior trade of the French found an outlet for ex- 
 portation either at New Orleans or at Montreal. The 
 trade of the upper Wabash posts 82 and Detroit went to 
 Montreal either by way of Lake Erie and the St. Lawrence 
 or by Lake Huron and the Ottawa river route. 83 Until the 
 founding of Fort Niagara, 1726, it is quite certain the 
 northern route was almost exclusively used. 84 But after 
 that the two divided the traffic, with the lighter canoes 
 following the northern route to avoid the uncertain waters 
 of Lake Erie, 85 while the heavier followed its northern coast. 
 The remainder of the lake-coast line was left comparatively 
 unexplored until the expulsion of the French. A map 
 by Charlevoix, as late as 1744, bears on the southern side 
 of the lake the words, " This shore is almost unknown " ; 
 nor were the geographers of 1755 more accurate as to these 
 waters. 86 
 
 80 Compare the failure of Crozat's monopoly. Monette, Vol. I, 
 pp. 238-9. Jesuit Relations, Vol. LXIX, p. 189 ff . ; N. Y. Col. 
 Docs., Vol. V, p. 733; Sheldon, Michigan, pp. 150, 190-5, 316; Hins- 
 dale, Old Northwest, p. 49. 
 
 "Jesuit Relations, LXIX, 193; N. Y. Col. Docs., IX, 154; Volney, 
 Works, p. 374. 
 
 82 In 1748 a treaty of peace between the English and the Miamis 
 made this a safer highway for the English traders than for the 
 French, but only five years later the French were able to reestablish 
 themselves on friendly terms with the Indians and came again into 
 active control of the region. The Indians made the portage a con- 
 siderable source of profit to themselves by supplying traders with 
 carts, pack-horses and a corps of Indians to assist in carrying canoes, 
 furs, and merchandise around the portage, charging a commission 
 for the service. Winsor, Mississippi Basin, pp. 243, 294; Journal 
 of Capt. William Trent, p. 36; and Am. State Papers on Indians, 
 Vol. I, pa 576, 578. 
 
 83 Jesuit Relations, LXIX, 253, 261, 305; LXX, 49; N. Y. Col. 
 Docs., X, p. 183. 
 
 84 Mag. West. Hist., Vol. V, p. 64; Turner, The Wis. Fur Trade, 
 p. 21. 
 
 85 Cadillac used the Ottawa route in going to Detroit, 1701, while 
 Tonty went by the lakes in 1717. Mag. West. Hist., V, 64; Shel- 
 don, Michigan, pp. 278, 316. 
 
 80 Hinsdale, The Old Northwest, p. 28.
 
 27 
 
 The relation between Detroit and Montreal as important 
 trading centers is clearly stated in the following quotation : 
 " The convoy was the great event of the year in colonial 
 life at Detroit. It was the annual shipment from Montreal 
 of the year's supplies, of the government's stores and 
 money, and of the consignments of the factors and mer- 
 chants at Montreal, Three Rivers, and Quebec to their cor- 
 respondents at Detroit. ... It was a fleet of trading canoes 
 and batteaux with armed protection, and arrived during the 
 month of September." 8r 
 
 The lower Wabash and Illinois settlements looked to New 
 Orleans for their market. 88 Volney, visiting these places 
 toward the close of the eighteenth century, wrote of life at 
 Vincennes : " All their time, too, is wasted in prating, end- 
 less stories, insignificant adventures and journies to town 
 to see their friends. That is to New Orleans, nearly five 
 hundred leagues down the river. At Fort Vincent, they 
 say of a man going to New Orleans, ' he is going to town,' 
 as if they lived in one of its suburbs." 89 
 
 When a journey was to be made from Montreal or De- 
 troit to Kaskaskia or New Orleans, the traveler found his 
 safest and easiest course by Miamis, Ouiatanon, and Vin- 
 cennes. 90 From the latter point to Kaskaskia, two courses 
 were available to him, both in use, one by the rivers and 
 the other an Indian trail across over-land. 81 As early as 
 1699 De Iberville conducted a colony of Canadians from 
 Quebec to Louisiana by way of the Maumee and the Wa- 
 bash. Other colonists followed under the leadership of M. 
 du Tessenet. 92 The French colonists of Canada dissatisfied 
 with the rigorous climate of New France, seeking the more 
 
 "Jesuit Relations, Vol. LXX, p. 306 (note). 
 
 83 Fraser's Report, Ind. Hist. Soc, II, 412; Mag. Am. Hist, XXI, 
 394; Monette I, 162. 
 
 *" Volney, Works, p. 374. 
 
 80 Documents Relating to the Settlements on the Wabash, Ind. 
 Hist. Soc. Vol. II, p. 435. 
 
 91 Ibid., Vol. II, p. 435. 
 
 92 Memoir de la Marine et des Colonies, Beckwith, Notes on the 
 Northwest, p. 97.
 
 28 
 
 genial lands of Louisiana, made this their route. There 
 was another route commonly in use by the French during 
 the eighteenth century from Montreal by the Ottawa river, 
 Post Michilimacinac, Lake Michigan, and the Illinois river. 
 It is scarcely safe to make definite assertions concerning 
 the relative importance of these two routes but, in general, 
 it would seem that the Illinois route was the more important 
 until the founding of the lower Wabash posts (1719-27), 
 when the Wabash route took the first place. The trader 
 and the missionary, the colonist and the traveler alike 
 used it,* 3 but it was the fur trader who made it historic. 
 
 The French and Indian war which broke out in 1754 
 was the culmination of a century of continual rivalry be- 
 tween France and England for the control of the Indian 
 fur trade. These rivalries kept the border colonies in a 
 constant foment." The movement of the French up the 
 St. Lawrence, by the upper lakes and into the Northwest 
 simply lengthened the line of conflicting trade inter- 
 ests. The English left the Indian trade largely to indi- 
 vidual enterprise, yet their adventures were none the less 
 aggressive. Both parties employed the Indians in pushing 
 their trade farther into the interior.* 5 The Iroquois raids 
 in the West were but one phase of this struggle. Their 
 victories and alliances threatened for a time to drive the 
 French entirely out of these regions. In this period the 
 Iroquois Indians were truly the coureurs des bois for the 
 English, penetrating the remote interior and returning 
 laden with furs to the settlements on the Hudson. 
 
 When Detroit was founded the latter were attempting 
 to win the Indians of those regions to friendly alliances," 
 and neither the French nor the English scrupled to incite 
 
 * Kaskaskia and its Parish Records, Fergus Hist. Col., No. 12, 
 p. 12; Am. Antiq., Vol. II. pp. 125-6; Pouchot, Memoirs, Vol. I, 
 p. 152; Dunn. Indiana, p. =7. 
 
 Y. Col. Docs.. Vol. IX. 
 "Ibid. Vol. IX, 160; Beckwith, Notes on the Northwest, pp. 
 215-6. 
 
 * Margr)', V, 219; Sheldon, Michigan, p. 284.
 
 29 
 
 the Indians against their rivals." Wherever an expedition 
 went there was always either a representative of its oppo- 
 nents already on the ground engaged in a friendly traffic 
 with the Indians, or evidence of the recent departure of 
 such an emissary. 98 The English were constantly inducing 
 the Indians to bring their furs to the seaboard from the 
 very midst of the French posts." As M. Tonty journeyed 
 from Montreal to his post at Detroit he met on Lake 
 Ontario three canoes of Indians from Michil, three from 
 Detroit and three from Saginaw which were going to Fort 
 Orange. Two days later he met seventeen canoes of sav- 
 ages bound for the same place. 100 Two years later eight or 
 ten canoes are reported at Fort Orange from the Miamis 
 Indians. 101 Such facts show the reality of a trade war for 
 the West during the entire eighteenth century. 
 
 The French and English first struggled for the possession 
 of the strategic points along the Wabash line. The con- 
 test was a real one with this difference between the efforts 
 of the two parties : the French attempts were backed by 
 the home government, and forts and garrisons supported 
 them, while the English relied on friendly alliances with 
 the Indians and individual action of interested traders, the 
 government at home giving them no support. The French 
 fear that these individual plans were backed by the eastern 
 colonies was the great incentive which drove them to occupy 
 the Wabash valley. 102 The activity of the French govern- 
 ment drew the Western boundary of the English colonies 
 
 87 Cass MSS., Wis. Hist. Col., Ill, 161; Gist, Journals, pp. 50-51. 
 
 88 Jesuit Relations, LXIX, p. 187; Sheldon, Michigan, pp. 284, 
 316; N. Y. Col. Docs., V, 726 ff., IX, 894, 1035; Margry, VI, p. 658; 
 Gist, Journals, p. 224 ff.; Journal of Capt. Wm. Trent, p. 15; cp. 
 Irving, Life of Washington, I, p. 48. 
 
 ** The English made it of advantage to the Indians to bring them 
 their furs. Jesuit Relations, Vol. LXVI, 173; LXVII, 127; N. Y. 
 Col. Docs., IX, 408 ; cp. Mag. West. Hist, V, 68. 
 
 100 Sheldon, Michigan, p. 316. 
 
 101 N. Y. Col. Docs., IX, 894 
 
 102 Margry, Vol. V, p. 219; Vol. VI, pp. 657-8; N. Y. Col. Docs., 
 Vol. IX, pp. 894, 1035, mi ; Journal of Capt. Trent, p. 15; 
 Sheldon, Michigan, p. 284.
 
 30 
 
 first along the line of posts from Detroit to Vincennes, and 
 then began anew another battle with the opponents for the 
 Ohio country. From 1727 to 1750 the contest was thus 
 narrowed to the region south of Lake Erie. The English 
 made Pickawillany, an Indian village at the mouth of Lora- 
 mie creek, a centre of their Ohio traffic 103 and were en- 
 gaged north and south of the Ohio river in a lucrative 
 fur trade. 
 
 Toward the close of this period the contest grew more 
 intense. The Wabash posts were starting points for a 
 constant stream of French traders going to the Ohio 
 country; while on the other hand, the organization of the 
 Ohio company in 1748 gave the English adventurers what 
 they had long lacked, a political and financial backing. 104 
 The company's store-houses became invaluable centers for 
 trade, and resulted in giving a new impetus to their 
 interests in the West. Christopher Gist was sent into 
 the valley of the Ohio to explore the country and to 
 win the Indians to the English. On the other hand, De 
 Celeron set out in 1749 on an exploring expedition in the 
 interest of the French government. 105 He traversed the 
 region from the Alleghany mountains to Detroit, deposit- 
 ing medals at strategic and important places as an act of 
 taking formal possession of the Ohio country for the king 
 of France. Such was the trend of affairs in the West 
 when the French by a sudden movement drew the western 
 boundary line for the English at a new series of military 
 posts extending from the east end of Lake Erie to the 
 headwaters of the Ohio. This began the war for the great 
 interior valleys. 
 
 After the English had wrested from the French their 
 settlements in America, the Wabash posts languished from 
 
 103 Jesuit Relations, Vol. LXIX, pp. 187, 299; N. Y. Col. Docs., 
 Vol. IX, p. 1 105; Margry, Vol. VI, p. 657 ff. ; Gist, Journal, p. 
 48; Wis. Hist. Col. Vol. VII, pp. 123-187; Parkman, Montcalm and 
 Wolfe, Vol. I, pp. 51, 52, 83-5. 
 
 104 Gist, Journals, pp. 35, 37, 44, 48, 224-5. 
 
 108 Gist, Journals, pp. 50, 51, 224, 225; Jesuit Relations, Vol. 
 LXIX, p. 151 ff.
 
 31 
 
 the effect of the sudden withdrawal of the patronage of the 
 French government. " Left almost to themselves, in the 
 midst of deserts, a hundred and fifty miles from the nearest 
 post on the Mississippi, without any taxes to pay and at 
 peace with the savages, they spent their lives in hunting, 
 fishing, trading in furs, and cultivating a little corn and a 
 few vegetables for their families." 10 * All evidence goes to 
 show a collapse of any considerable fur trade in these 
 regions during the exciting years attending the series of 
 wars which began in 1754 and which did not end until the 
 peace which followed the overwhelming victories of Mad 
 Anthony Wayne in 1794. The French settlers of Vincen- 
 nes " had nothing to live on but their fruit, vegetables, 
 potatoes, Indian corn and once now and then a little game. 
 No wonder therefore they became as lean as Arabs." Such 
 testimony is good evidence of the lower state of trade in 
 these regions under English occupation. The Wabash 
 route was used by the British in their occasional military 
 expeditions back and forth between Detroit and Vincen- 
 nes, m and the portage at the Miamis post became of such 
 importance that carts were regularly employed to transport 
 boats and merchandise from the Miami to the Wabash 
 
 103 
 
 river. 
 
 The Wabash trade route passed within the jurisdiction 
 of the United States under the terms of the treaty of 1783 
 with Great Britain, but severing the political bonds connect- 
 ing it with the St. Lawrence valley deprived it of any great 
 significance as a highway, until emigration had gone far 
 enough to make better facilities for transportation in the 
 West imperatively necessary. The history of the response 
 to that demand is the history of the origin and operation of 
 the Wabash canal. With the coming of the United States 
 into these valleys passed the days of the French regime, and 
 of the Indian fur trade. 
 
 llw Volncy, Works, p. 370, 371. 
 
 107 Major Bowman's Journal, in appendix to " George Rogers 
 Clark's Campaign.'' p. no. Cincinnati, 1869; Journal of Joseph 
 Buell. 1785-6, in Hildreth, Pioneer History, p. 140. 
 
 108 Hutchins, Topographical Description, p. 30.
 
 CHAPTER II 
 
 THE WABASH AND ERIE CANAL 
 
 The Origin and Federal Character 
 
 It is scarcely necessary to discuss at length the various 
 theories concerning the origin of the canal. Nature had 
 too clearly fitted the marshy headwaters of the Wabash 
 and Maumee rivers for a connecting waterway to make a 
 study of the evolution of such an idea of any historical 
 value. The lengthening and shortening of the portage 
 with the changes in the seasons must have suggested the 
 scheme to every traveler over this swampy pass, whether 
 French or English. 1 
 
 In the Ordinance of 1787 the United States had reserved 
 this carrying-place to its citizens for a common highway 
 free from any tax, imposts, or duty. 2 This action was an 
 official recognition of the value of the waterway and a 
 placing of the seal of the Federal government upon it as a 
 national roadway. General Washington pointed out in 
 1784 in a letter to Benjamin Harrison the necessity of 
 cementing the East and West by lines of communication, 8 
 and again in the same year in a letter to Richard Henry 
 Lee, President of Congress, suggested the advisability of a 
 survey of the waters of the territory north of the Ohio 
 
 1 When General Hamilton was encamped at the eastern terminus 
 of the portage on his expedition to Vincennes 1778, he wrote of 
 this fact: " By damming up the water of this petite riviere four 
 miles below the landing, the water is backed and raised an inch 
 here. At the Dam it rose an inch the first hour. The Beaver had 
 worked hard for us, but we were obliged to break down their dam 
 to let the Boats pass that were sent forward." See Hamilton to 
 Haldimand. Nov. 1, 1778. Haldimand Collection Canadian Arch- 
 ives; also Documents in Ind. Hist. Soc, II, p. 436. 
 
 "Ordinance of 1787, Art. IV. 
 
 3 Washington, Writings, Vol. IX, p. 445 (Sparks ed.).
 
 33 
 
 river for lines of communication. 4 His plan was a canal, 
 but a canal that should ultimately connect Lake Erie and 
 the western territory with the projected Potomac canal and 
 thus bind the western trade to Virginia. 6 In another place 
 Washington suggested in a letter to Henry Knox, his Sec- 
 retary of War, the strategic importance of the head of the 
 Maumee river and prophesied the connection of the waters 
 of Lake Erie with the Mississippi. 8 
 
 There is also a tradition that Quaker missionaries, while 
 establishing an agricultural school among the Indians 
 around Ft. Wayne, 7 urged the advantage of a canal. The 
 idea was in the air. Perhaps the most definite and widely 
 known of these early opinions was that of Captain McAfee. 
 He wrote, " The Maumee is navigable for boats from this 
 place to the lake and the portage to the nearest navigable 
 branch of the Wabash is but seven or eight miles through 
 a level, marshy prairie from which the water runs both to 
 the Wabash and to the St. Marys. A canal at some future 
 day will unite these rivers." 8 
 
 But for something more than an expression of opinion 
 we must look to Captain James Riley, a deputy United 
 States Surveyor, who was sent to Ft. Wayne in 1818 to 
 make a preliminary survey of the lands in this region which 
 were soon to be opened for settlement. He suggested the 
 importance of a canal which he thought could very easily 
 be cut with a length not to exceed six miles, and the fol- 
 lowing year ran a line of levels over the portage from the 
 St. Marys to Little river. His recommendation communi- 
 cated to his superior, Ed. Tiffin, Surveyor General, became 
 
 4 Washington, Writings, IX, p. 80. 
 
 5 Ibid., IX, 303, 327 ; Ward, Chesapeake and Ohio Canal, Johns 
 Hopkins University Studies, 17th Series, Chapter I. 
 
 6 June 18, 1785, Washington, Writings (Sparks ed.), IX, p. 
 108. But here again his object is evidently to extend his Potomac 
 route via Lake Erie westward into the Wabash and Illinois country. 
 
 T i8o4- 
 
 8 Captain McAfee, History of the Late War in the Western 
 Country, p. 127, Lexington, Ky., 1816. 
 
 3
 
 34 
 
 a part of the official records," and by the action of the latter 
 was brought to the notice of Congress. Further surveys 
 later established the feasibility of the plan. The origin 
 of the canal, however, must be sought in a combination of 
 forces. Other causes than the speculation of military ex- 
 perts united to make it a practical necessity. 
 
 Peter Buell Porter, 10 a representative in the eleventh 
 Congress from western New York, became the champion 
 of a system of roads and canals to connect the West with 
 the East. He pointed out the need of markets in the West 
 and showed the moral effect of the idleness resulting where 
 there was no incentive to work because of inadequate mar- 
 kets. His remedy was a canal from the Mohawk to Lake 
 Ontario; a canal around the falls of the Niagara; a canal 
 from the Cuyahoga to the Muskingum, and another around 
 the falls of the Ohio at Louisville. He included in his plan 
 the construction of a canal across the Wabash portage, 
 closing his arguments with the following resolution: 
 
 " That a committee be appointed to examine into the ex- 
 pediency of appropriating a part of the public lands, or of 
 the proceeds thereof, to the purpose of opening and con- 
 structing such roads and canals as may be most conducive 
 to the general interests of the Union." n This plan was in 
 continuation of the more famous movement represented by 
 Gallatin's report of 1808. But at this time stress of war 
 turned Congress from any course looking to internal im- 
 provements. After the close of the War of 1812 and the 
 European wars the commercial depression which followed 
 drove multitudes to seek new homes. The seaboard could 
 no longer furnish the returned soldier nor the ruined mer- 
 
 9 Helm, History of Wabash County, p. 67. A similar recommen- 
 dation as a result of surveys found its way to Congress in 1819. 
 American State Papers, Vol. XXI. 555. 
 
 10 Porter was also a member of the firm of Porter, Barton and 
 Company, which enjoyed the monopoly of the carrying-trade along 
 the Niagara river from Lakes Ontario to Erie. 
 
 " Annals of Congress. 1809-10, p. 1401. Feb. 9, 1810. Speech of 
 Peter Buell Porter in Congress on Internal Improvements.
 
 35 
 
 chant with adequate opportunities." This le*d to a rush 
 of the people into the new country beyond the mountains, 
 and the westward movement gave, in turn, an immediate 
 demand for highways of transportation. It was soon found 
 that except along the navigable waterways or artificial 
 roadways products of the soil could not be marketed be- 
 yond a radius of about one hundred and fifty miles." The 
 cost of transportation on longer distances destroyed all the 
 profits. Thus there came back from the new settlements 
 of the West a demand for aid in creating artificial lines of 
 communication. The rapidity with which new regions were 
 occupied and the wide extent covered in the settlements 
 prevented the states from Undertaking the building of ade- 
 quate roads and channels for this trade. An eminent his- 
 torian asserts that " The heaviest taxes that could have 
 been laid would not have sufficed to cut out half the roads 
 or build half the bridges, or clear half the streams neces- 
 sary for easy communication between the new villages and 
 for successful prosecution of trade and commerce." " 
 
 Already a rude line of water and land transportation be- 
 tween New York and the West was in use. Freight was 
 taken up the Hudson to Albany. Then for fifteen miles 
 over a good turnpike to Schenectady. Up the Mohawk by 
 a scow steered by a sweep oar and pushed up the stream 
 by man-power. Around Little Falls in the Mohawk by a 
 canal and eight locks. From Utica to Lake Oneida by a 
 canal and Wood creek, through Lake Oneida to the Onon- 
 daga and Oswego rivers into Lake Ontario; thence, along 
 Lake Ontario to Lewiston where the Porter, Barton Trans- 
 portation Company took it overland along the Niagara 
 river. At Black Rock, it was delivered to a fleet of steam- 
 ers plying on Lake Erie. Thence, by land over the port- 
 age to old Fort Boeuf, and once more by water to Pitts- 
 
 12 McMaster, Vol. IV. pp. 382-3. 
 
 "Ibid., Ill, p. 464; The Central Water-Line from the Ohio River, 
 Pamphlet, Richmond, Va., 1868. 
 "McMaster, III, p. 461.
 
 36 
 
 burg, and down the Ohio to the various points of distri- 
 bution. This was the cheapest way then possible. One 
 hundred thousand bushels of salt annually passed west- 
 ward from central New York. 15 The route as a whole bore 
 the same relation to New York trade that the overland 
 route from Philadelphia to Pittsburg did to Pennsylvania." 
 Certainly the greater part of the travel and commerce up 
 to this time followed the mountain routes from Philadel- 
 phia, Baltimore or Alexandria but of the several routes 
 freight could be carried slightly cheaper from New York to 
 Pittsburg by the northern way. 17 If the Hudson route 
 was to have any commercial importance, there was great 
 need of shortening it and eliminating the portions of land 
 carriage, 18 and several had pointed out the way. 
 
 Together with the economic factors voiced in the demand 
 for national aid in constructing roads and canals, there was 
 a strong military need. The experience of the Northwest- 
 ern campaigns of the War of 1812 had demonstrated the 
 futility of military operations with inadequate means of 
 transporting troops and supplies. These expeditions were 
 almost invariably failures due to defective transportation. 
 A national military highway across the Old Northwest was 
 
 "John Palmer, Journal of Travel in the United States, London, 
 1818. McMaster, Vol. Ill, pp. 480-1. Winsor, the Westward Move- 
 ment, p. 506. 
 
 16 It is noteworthy that whether the journey began at New York, 
 Philadelphia, or Baltimore, the Western terminus was more often 
 Pittsburg. The Erie and Michigan portages had relatively declined 
 in importance due to the unsettled status of Indian affairs in these 
 localities and the proximity of the not too friendly British settle- 
 ments of Canada and the frontier. 
 
 17 The great commercial routes to the Western country at this early 
 period and indeed till the construction of the Erie canal and the 
 various canals of the Northwest were as follows : 
 
 (A) One starting from Philadelphia reached by different portages 
 the Alleghany river. 
 
 (B) and another route leaving either Baltimore or Alexandria 
 passed from the Potomac to the Monongahela. Both centered at 
 Pittsburg from whence the common way led down the Ohio river. 
 
 18 This early route between the chain of rivers and lakes across 
 New York as such attained to no great commercial importance. 
 Its main significance lies in the fact that it pointed the way for the 
 Erie canal. See Poor's Railroad Manual, 1881, p. 6.
 
 37 
 
 demanded. In Congress this motive was doubtless the 
 deciding factor, yet a less creditable force had its place in 
 winning support. The policy of harbor appropriations 
 had already had its beginning. 18 Sectional jealousies now 
 compelled the national government to distribute its wealth 
 in money and lands among the western states demanding 
 canals and roads to counterbalance the Atlantic seaboard 
 clamoring for harbors and ships. 20 
 
 The sentiment demanding a system of internal improve- 
 ments was particularly strong in the central and northern 
 part of the then sparsely settled state of Indiana. 21 Gov- 
 ernor Jennings a in his message to the state legislature in 
 December, 1818, urged the consideration of a system of 
 canals and roads to facilitate commerce and enhance the 
 value of the soil. A system of roads and canals invites, 
 he said, " To a more general intercourse between the citi- 
 zens; which never fails, in a great measure, to remove the 
 jealousies of local interests, and the embittered violence 
 of political feuds, which, too often, produce the most un- 
 dignified results to our republican institutions." M 
 
 " Improvements of Harbors by Federal Government began in 1822. 
 Annals of the American Academy of Political and Social Science, 
 Sept., 1893, p. in. Cp. Harbor bills for military purposes, Annals 
 of Congress, 1797, p. 24 and p. 324. 
 
 "The first step in this direction was taken when Congress by the 
 act of April 30, 1802, gave one-twentieth of the net proceeds of the 
 land sales in Ohio to be used for a system of roads to connect with 
 the Atlantic seaboard. Another act of March 3, 1803, gave 3 per 
 cent of this fund to the state to use for roads within its limits. 
 This policy was continued in other states. Donaldson, Public 
 Domain, pp. 257-8. 
 
 n Schoolcraft, Travels in Central Portions of the Mississippi 
 Valley, 1821, pp. 90-91. This author examined the locality with the 
 object of furnishing the public with information at a time when 
 interest was running high. 
 
 22 Major Stickney, Indian agent in Indiana, had a part in stimulat- 
 ing the public authorities to action. In a MS. of 20 pages, he com- 
 municated his views on a canal to some gentlemen in Cincinnati, 
 carried on a lengthy correspondence with Governor Clinton, of New 
 York, and Governor Jennings, of Indiana. See the autobiography of 
 Major Stickney printed in " Early History of the Maumee Valley," 
 H. L. Hosmer. 
 
 23 House Journal, Session III, p. 21.
 
 38 
 
 In 1822 the states of Indiana and Illinois conjointly 
 made provision for the improvement of the Grand Rapids 
 of the Wabash river. 24 This was a definite step toward the 
 development of the Wabash route as something more than 
 a waterway for canoe trade. Both legislatures, during 
 their sessions of 1823, again considered the subject of con- 
 necting the Maumee with the Wabash by canal. 25 Gover- 
 nor Hendricks of Indiana in his message of December, 
 1822, having in view the further improvement of the Wa- 
 bash river for navigation, had urged that the state should 
 husband its resources " for the great work to be done." 28 
 A year later the same governor reported to his legislature 
 a communication from the Illinois board of canal com- 
 missioners wherein attention was called to the importance 
 of connecting the navigation of the Wabash and Maumee 
 rivers by a canal. 27 Public opinion was doubtless correctly 
 expressed when a local newspaper said: "Not only 
 would our markets improve from the facilities to send off 
 our produce, cash flow in, instead of out, as is the case now, 
 and merchandise be cheaper, but the whole section of coun- 
 try from here to the Lake, which is now scarcely less than 
 a wilderness, would become a thickly populated region, 
 of enterprise, industry and happiness." M 
 
 Ever since the admission of the state of Indiana into the 
 Union, the canal project had been a favorite subject be- 
 fore the legislature. But the state lacked the means even 
 to make the surveys necessary to test the practicability 
 of the canal, 20 and the movement was of necessity carried to 
 the Federal Congress, a body just then beginning to show 
 itself ready to aid such enterprises. Indiana's representa- 
 tives in Congress united their efforts to secure a land grant 
 
 1 Dillon, History of Indiana, p. 569. 
 
 Ibid., p. 569. 
 
 Ibid., p. 570. 
 
 House Journals, 8th Session, p. 12, Dec. 2, 1823. 
 ' Lafayette Mercury, March 20, 1834. 
 ' Indiana Executive Documents, No. 32, p. 12.
 
 39 
 
 for this purpose. 30 The battle for internal improvements 
 by Federal aid was a long one. 81 More than a decade of 
 discussion followed ere it arose in triumph as the American 
 System of Gay, Calhoun, and Adams, 32 and in this parlia- 
 mentary struggle the Wabash and Erie canal project be- 
 came one of the measures toward which both sides of the 
 controversy directed their strongest arguments. The con- 
 test began with the introduction in 1822 of a bill which pro- 
 vided an appropriation for the survey of routes best fitted 
 for a series of canals and roads. 33 The measure was de- 
 feated and the same fate met it upon its re-presentation the 
 following session. 34 However, the friends of western in- 
 ternal improvements secured in 1824 $30,000 with which to 
 make a series of surveys. 35 No routes were specified, 
 though in the debates Senator Thomas Hart Benton had 
 strongly presented the natural advantages of the Wabash 
 route. 38 
 
 More definite action had in the meantime begun in the 
 lower House. Mr. Jennings, a representative for Indiana, 
 reported on January 23, 1823, from the Committee on Pub- 
 lic Lands, a bill to authorize the state of Indiana to open a 
 canal through the public lands for the purpose of connect- 
 ing the Wabash and the " Miami of Lake Erie." " It called 
 for no further aid than the right of way, but was generally 
 
 30 Very credible sources show that the definite project for a canal 
 by Federal aid had its origin in the individual enterprise of Samuel 
 Hanna and David Burr. At their urgent representations, the ser- 
 vices of the state delegation in Congress were enlisted in behalf of 
 the plan. The Life and Character of Samuel Hanna, G. W. Wood, 
 p. 16. 
 
 31 For a brief history of the movement see Ward, Early Develop- 
 ment of the Chesapeake and Ohio Canal, Chapters II and III. Johns 
 Hopkins University Studies, Seventeenth Series. 
 
 39 From Gallatin's Report in 1808 to the close of Monroe's adminis- 
 tration little more than the presentation of various projects was 
 accomplished. Schouler, Vol. Ill, pp. 247, 295, 2>37- 
 
 33 Annals of Congress, II, p. 1682, April 10, 1822. 
 31 Ibid., p. 340, December 10, 1822. 
 
 35 Ibid., I, p. 570, 1823-4. 
 
 34 Ibid., Vol. I, p. 534. 
 
 3 ' Ibid., 1822-1823, p. 667.
 
 40 
 
 regarded by the representatives from Indiana as the enter- 
 ing wedge finally to secure a land grant from Congress. 88 
 No action was secured until near the close of the session 
 following. Mr. Rankin had reintroduced Mr. Jennings' 
 measure early in the session, 38 and the General Assembly 
 of Indiana joined with a memorial asking aid from Con- 
 gress. 40 In May Mr. Rankin's bill was considered in both 
 houses. 41 The measure asked for a right of way of 90 feet 
 on each side of the canal. It was regarded, accordingly, 
 as a request for a Federal land grant to a state for purposes 
 of internal improvement, though the tract of land was to 
 be reserved to the state and used for no other purposes. 
 In the debates it was argued that this was a land grant 
 worth $50o,ooo, 42 whereas, the estimated cost of the canal 
 was only $300,000. 
 
 The Committee on Public Lands reported most favor- 
 ably to the work itself but opposed a grant of land unless 
 this canal should be included in a general system of in- 
 ternal improvements, and preferred a money grant if any 
 aid should be given. In the open debate in the House 
 an attempt was made to substitute, for the reservation of 
 90 feet on each side, a strip of one mile on each side. In 
 opposition to such an amendment, it was argued that such 
 a grant was " trenching on the terms of the cession of the 
 Northwestern territory by Virginia to the United States 
 which declared that the whole of that cession should be a 
 fund for the payment of the common expenditures of the 
 United States." " The canal was a local work and not 
 one of the common expenditures of the United States." " 
 The friends of the work adverted to the frequently pre- 
 sented argument that on the contrary such a public work 
 would immensely enhance the value of the public lands 
 
 M Tippecanoe Journal and Free Press, Sept. 29, 1842. 
 
 88 Annals of Congress, 1823-4, p. 829. 
 
 "Ibid., 1823-4, p. 1083. 
 
 " Ibid., 1823-4, Vol. II, p. 2601. 
 
 a Ibid., p. 2601. 
 
 ** Ibid., p. 2600.
 
 41 
 
 and thus prove a compensation to the general government. 
 The opinion of Washington favorable to the improvement 
 of this water communication was presented." Finally, 
 the original bill, with a slight amendment requiring the sur- 
 vey to be finished in three years, passed both houses." The 
 expense of surveying and constructing was thrown wholly 
 on the state, if any action were taken. It remained to be 
 seen whether the state desired to undertake such a work 
 at its own expense. 
 
 Somewhat earlier, Congress, in the enabling act pro- 
 viding for the admission of Indiana into the Union, had 
 granted to the state three per cent of the net proceeds of 
 the public lands to " be reserved for making public roads 
 and canals " under the direction of the legislature. w This 
 fund served as a nucleus for some indirect state action. A 
 part of this money was appropriated in 1824 " to improve 
 the commerce on the Wabash river, 48 and the state's obliga- 
 tion to carry out the act just passed by Congress was urged 
 by Governor Ray.* 9 " Our waters must be imprisoned 
 in new channels and made to subserve the essential pur- 
 pose of commerce," he said, 50 and reported to his legis- 
 lature that surveys and estimates were just completed by 
 the general government which proved the practicability of 
 
 ** Annals of Congress, 1823-4, Vol. II, p. 2601. 
 
 45 Passed House, May 13, 1824, Senate, May 26, 1824; Annals of 
 Congress, 1823-4, p. 788, Vol. II, p. 2613. 
 
 *" Acts of Congress, Sec. VI, CI. 3, April 19, 1816. 
 
 " Act of Jan. 31, 1824. Laws of Indiana. The whole income 
 from this three per cent fund could have done little toward such 
 an undertaking. For the first seven years it yielded: 1816, $7673.80; 
 1817, $9762.91; 1818, $7935-03; 1819, $4661.87; 1820, $12,595.85; 1821, 
 $20,557.84; 1822, $8762.78. Am. State Papers, Vol. 18, p. 717. Nor 
 had the fund became very valuable 10 years later. In 1835, it 
 amounted to $20,105.00 and for 1835, $24,398.00. House Journals, 19 
 Sess., p. 12 and 20 Sess., p. 15. The fund was finally distributed 
 among the counties to be used for improvement of roads. Act of 
 Feb. 6, 1837. A total of $575,547-75 was paid into this fund. Tenth 
 Census, VII, 618. 
 
 "The Wabash river is to be regarded as a component of the 
 Wabash and Erie waterway. 
 
 48 Message, Dec. 8, 1826, Indiana House Journal, No. 11, p. 32. 
 
 60 Ibid., p. 44.
 
 42 
 
 a canal connecting the waters of the Maumee with the 
 Wabash and following the valley of the latter stream. 51 
 Such a work, he continued, would be a step to the relief of 
 the hard times. 52 Arguments were accumulating. The 
 Erie canal had just been completed and had opened a 
 navigable water line from New York to Chicago. To 
 profit by this outlet the western states lying along the lakes 
 were desirous of constructing channels to connect with it 
 the more remote portions of their territory. 53 Ohio had 
 begun its comprehensive system. The fever, if this intense 
 demand for increased facilities of trade may be so called, 
 was spreading westward. Governor Clinton of New York 
 had had a part in stimulating Ohio into action. 54 The an- 
 swer on the part of Indiana to this demand was that the 
 state lacked means. Doubtless the state authorities as a 
 whole had no intention of constructing it without the aid 
 of the general government," and took no step toward 
 acting under the Federal authorization of 1824. 56 
 
 Independent, however, of any action for direct aid to 
 the canal, the United States government had been making 
 surveys in the western territory. In addition to the $30,- 
 000 appropriated in 1824, $50,000 more was added March 
 25, 1826, for the purpose of examining a series of canal 
 routes and turnpike projects. 57 At the same session a bill 
 was introduced into Congress asking for a land grant to 
 aid the state of Indiana in the construction of the Wabash 
 and Erie canal. The plan was to appropriate a quantity of 
 land equal to six sections in width on both sides through- 
 out the entire length. The state was to use the proceeds of 
 these lands in the construction and maintenance of the 
 
 51 Message, Dec. 8, 1826, Indiana House Journal, No. n, p. 47- 
 
 52 Dillon, History of Indiana, p. 570. 
 
 "Andrews, Report on Colonial Trade, p. 306, Washington, 1854. 
 
 "Hosmer, Early History of the Maumee Valley; E. E. Sparks, 
 Expansion of the American People, p. 268. 
 
 55 Congressional Debates, Vol. II, Part I, 1825-6, p. 590. 
 
 M Donaldson, Public Domain, pp. 257-8. 
 
 "United States Statutes at Large, Little and Brown edition, Vol. 
 IV, p. 151.
 
 43 
 
 canal. 13 The bill returned from the Committee on Roads 
 and Canals early in the session, but final action upon it was 
 postponed until the measure was crowded over for the fol- 
 lowing season/ 9 In the debates in Congress at this time 
 the strongest opposition arose from the indefiniteness as 
 to the amount of land necessary. Various opinions were 
 expressed as to the length of the canal to be constructed. 
 One estimate was that a cut across the summit level, a dis- 
 tance of about seven miles, would be sufficient. Another 
 extended the canal to the Little Wabash, twenty-five miies 
 below. Others, to the mouth of the Tippecanoe river, one 
 hundred miles down the Wabash. Mr. Hendricks, the 
 leading supporter of the bill and Senator from Indiana, 
 probably expressing the sentiment of the canal's friends, 
 was of the opinion that the canal should extend fifty miles 
 to the mouth of the Mississinaway river. 80 
 
 Mr. Hendricks in his speech in the Senate April 20, 1826, 
 in defense of the bill spoke at length upon the benefits to 
 accrue to the Union from this canal as a military route. 
 The experience of the forces under General Harrison in 
 the war of 1812 was cited in evidence of the value of such 
 a highway. Such a grant would be expedient as enhan- 
 cing the value of the other lands to an extent sufficient to 
 reimburse the government. It was claimed that this last 
 had been the motive of all the Federal land grants. 81 The 
 opponents of the measure replied, " Let Indiana construct 
 
 M Congressional Debates, 1825-6, Vol. II, Part I, p. 705. 
 
 " Ibid., 1825-6, p. 590-7. 
 
 00 These estimates become of interest in view of the later contro- 
 versies over the location of the terminus. After fixing this for a 
 time at the mouth of the Tippecanoe river, it was extended a few 
 miles below to Lafayette, only in turn to be carried down to Terre 
 Haute. Finally, abandoning the attempt to make the Wabash river 
 a part of the waterway, Evansville on the Ohio was selected as 
 the ultimate terminus. The indefiniteness of the bill on the terminal 
 points of the canal was due to the scant information available upon 
 the navigability of the Wabash and the Miami rivers. Letter of 
 Governor Noble to Hon. James Whitcomb, Commissioner General 
 Land Office, dated Nov. 12, 1837. Executive Docs., 1837, No. 32, 
 po. 12-13. 
 
 41 Congressional Debates, Vol. II, Part II, 1825-6, pp. 59Q-7-
 
 44 
 
 her own roads and canals as Pennsylvania has made hers." 
 The defense easily showed the falsity of such an argument. 
 Pennsylvania's resources were her public lands; in Indiana 
 no such resource existed, for the general government 
 owned the public lands. This condition deprived the new 
 states of such resources as all the older states had and was 
 held to be a valid reason why the new states should receive 
 aid. It was held that the United States should foster do- 
 mestic commerce equally with foreign. But final action 
 was postponed for the session of 1825-6 pending further 
 information from the surveys being made in the west.™ 
 
 Early in the following session, the subject was again 
 presented. In the Senate the Committee on Public Lands 
 was directed to inquire into the constitutional power of 
 Congress to dispose of the public lands, and into the justice 
 and expediency of appropriating portions of these domains 
 to the states for constructing canals.* 4 The resolution 
 met with defeat rather because of the strong feeling that it 
 would cause needless delay, and be only an expression of 
 the opinion of a few when completed. Mr. Harrison said 
 in the debates in the Senate that no similar project 
 promised to be more beneficial to the western country as 
 it would open the West to the markets of New York. Mr. 
 Smith of South Carolina opposed it as inaugurating a 
 general system of land grants and as an indefinite donation. 
 The bill was amended in the Senate to satisfy certain of 
 these conflicting elements." 3 Instead of six sections in 
 width, three on each side, it was made to give the alter- 
 nate sections for five miles on each side, reserving the re- 
 maining sections to the United States." This reduced 
 slightly the amount of the grant and was calculated to 
 greatly enhance the value of the portion remaining to the 
 
 G Congressional Debates. Vol. II.. Part I., p. 597. 
 
 " See Speech of Mr. Chandler, Feb. 9, 1827. Congressional De- 
 
 VoL III, p. 310. 1826-7. 
 " Congressional Debates. 1826-7, Vol. Ill, pp. 7-12. 
 °Feb. 13. 1827. 
 "Congressional Debates, 1827, Vol. Ill, pp. 310-318.
 
 45 
 
 United States. Other amendments in the Senate made it 
 incumbent upon the state to commence the canal in five 
 years. The measure did not come up before the House 
 for final action until one day before the close of the session, 
 March 2, 1827, and passed at midnight of that day. 87 For- 
 tunate it was for the success of the project that it passed 
 at this session. The next Congress was composed of Jack- 
 son men opposed to internal improvement."' This project 
 originated a third and distinct phase of Federal aid for 
 canals and roads. In 1806 Congress began a system of 
 direct appropriations of money for the National road 
 from Cumberland westward, 69 and in 1825, authorized 
 stock to be taken in the Chesapeake and Delaware Canal 
 Company and three years later subscribed stock to the 
 Chesapeake and Ohio canal. 70 The Wabash appropria- 
 tion 71 took the form of a Federal land grant in aid of a 
 state public work. 72 
 
 Organization and Construction as an Interstate 
 Enterprise 
 
 During the consideration of the canal bill in Congress 
 the canal had been planned wholly as an Indiana work. 
 The grant was made to the State of Indiana, for the navi- 
 gable point of the Maumee was supposed to be within its 
 limits. The actual examination by surveys soon made it 
 apparent that the canal must extend for some distance into 
 Ohio, and accordingly Congress authorized Indiana to 
 convey to Ohio the lands within the limits of the latter to 
 
 BT Congressional Debates, 1826-7, p. 1496. 
 
 ™ Letter of Judge Test, Sept. 29, 1842, Tippecanoe Journal. Test 
 was Representative from Indiana from i8?3 to 1831. 
 
 " Annals of Congress, 1806-7, p. 1238. 
 
 70 Annals of Congress, 1825, pp. 686-7; Ward, Chesapeake and 
 Ohio Canal, p. 86. 
 
 71 A similar grant on the same day was made to Illinois for a 
 canal to join the Illinois river with Lake Michigan, and May 24, 
 1828, to Ohio to extend the Miami canal. 
 
 72 Donaldson, Public Domain, p. 258.
 
 46 
 
 be used by it in constructing its portion of the canal. 1 
 Indiana accepted the portion of the grant in its bounds in 
 1828 and by the same acts took steps looking to the ulti- 
 mate construction of the canal. A board of three com- 
 missioners 2 was elected by the legislature for a term of 
 two years,' and paid out of the " debt due from the state 
 to the road and canal fund." 4 The commissioners were 
 authorized to locate the canal with such terminal points 
 on the Wabash and Maumee as might seem advisable 
 from the surveys made by the general government, to 
 select the lands donated, and to ascertain whether funds 
 could be obtained on a pledge of the lands granted. The 
 board was reorganized in 1830 and one of the three mem- 
 bers was designated as the Commissioner of the Canal 
 Fund, another as Commissioner of Contracts, and the 
 third as the Commissioner of Accounts. In addition, the 
 office of Chief Engineer was created. 5 
 
 Governor Ray had recommended that the funds should 
 be secured by a loan or an issue of paper money redeem- 
 able in land at a minimum price when the land should be 
 offered for sale. His plan was to have the completed 
 work enhance the value of the land." The task of provid- 
 ing ways and means was taken up by the state legislature 
 at its session in 1830/ Timber, stone, and other material 
 upon the canal lands suitable for use in the construction 
 of the canal and locks were reserved. The state asked 
 for the alternate sections reserved by Congress, but met 
 with a refusal. 8 Little progress toward definite work was 
 made for several vears because of delavs over minor 
 
 1 United States Statutes at Large, Vol. IV, p. 306. 
 * Samuel Hanna, David Burr and Robert John were the first mem- 
 bers of the canal board. 
 s The term of office was made three years in 1830. 
 
 4 This refers to the proceeds of the three per cent fund. 
 
 5 Session Laws, 1829-1830, Ch. VIII. pp. 13-18. 
 
 8 House Journals, No. 12, p. 19; Niles' Register, Jan. 12, 1828, Vol. 
 33. P- 322. 
 
 7 Session Laws, 1829-30. Ch. \ III, pp. 13-18. 
 
 8 Senate Documents, No. 62, 3rd Congress, 2nd Sess., Vol. III.
 
 47 
 
 details of organization. It was currently believed that 
 the delay in beginning the actual work of construction 
 was due to " some divisions of opinion respecting the 
 comparative utility of canals and railroads." " That 
 question was, indeed, carefully canvassed. Governor Ray 
 called the legislature's attention to the fact that it might 
 be advisable to construct a railroad instead of a canal 
 from the proceeds of the grant. 10 Two years later his 
 conviction was stronger when he urged that a railroad 
 would cost less than one-half as much as a canal. 11 The 
 canal commissioners, on the other hand, set forth the argu- 
 ments which probably turned the scales for a canal. Canals 
 require " labor and such material as this state affords; the 
 latter (railroads), iron, which constitutes a large item of 
 expense, must come from abroad." " 
 
 There was in favor of canals their long tested usefulness 
 and success in England and the older states. 13 Nothing 
 depended upon experiment and conjecture. As a boat 
 did not exceed greatly the cost of a wagon, the canal 
 satisfied the masses better. The commissioners chose the 
 conservative course. In the light of then existing knowl- 
 edge a different course would have been little short of a 
 foolhardy adventure. Foresight which penetrated the 
 future so far as to realize the wonderful changes so soon 
 to begin in the transportation system would have been 
 phenomenal. 
 
 * History and Geography of the Mississippi Valley. Timothy 
 Flint, Cincinnati, 1833, p. 389. 
 
 10 Governor James B. Ray, Message, Dec. 4, 1827, House Journal 
 12th Sess., p. 15. Such an action as was here suggested was taken 
 by Illinois March 2, 1833, changing the use of its grant for a railroad. 
 From the success of the Illinois Central Railroad and in the light of 
 the failure of the canal, one is reminded of the serious error made 
 by Indiana. Donaldson, Public Domain, pp. 257-8. 
 
 11 Message, Dec. 8, 1829, 13th Sess., p. 14. 
 
 12 Indiana, House Journal, 16th Sess., Appendix F., Dec. 17, 1831. 
 
 13 The Erie and Champlain canals had yielded to the state of New 
 York before their completion five per cent upon the investment. The 
 tolls for 1824 amounted to $340,642. " The Canal Policy of Penn- 
 sylvania," Fulton.
 
 48 
 
 Finally, urged on by the strong demands of public 
 sentiment, the legislature took up in earnest the question 
 of creating a canal fund. The land sales had failed to 
 provide an income sufficient to warrant the letting of con- 
 tracts, 14 mainly because the length of credit given to the 
 purchasers, one-seventh in cash and the remainder in six 
 equal annual payments, yielded to the state little ready 
 cash. Accordingly, the same act that created a special 
 board to manage the canal funds " outlined the final 
 course 16 and authorized a loan of $200,000. As a safe- 
 guard it was provided that the amount of the loan should 
 at no time exceed the amount due on land sales. The 
 certificates were issued on a credit of thirty years, and the 
 canal lands were pledged for their ultimate payment." In 
 addition, the commissioners were directed to begin the 
 construction of some portion of the middle section at 
 once." 
 
 The first ground was broken at Fort Wayne, February 
 22, I832. 1 " Little progress was made during the first year, 
 although local interest ran high. Meetings were held 
 along the line to promote the rapid building of the canal. 
 Committees worked to secure legislative action for addi- 
 tional surveys." The scarcity of good material for locks 
 
 14 The lands were put on sale at Logansport in October, 1830, and 
 at Fort Wayne, October, 1832. 
 
 15 Session Laws of Indiana, 1831-1832, Ch. I, Sec. 3. 
 
 10 This made the canal fund to consist of money derived from the 
 following sources : From the sale of the lands donated by the United 
 States ; from loans procured under authority of the state and predi- 
 cated on the amount arising from the sale of canal lands ; from tolls 
 of the canal and rents for the use of all privileges created by the 
 construction ; from any donations, grants, or any other sums set apart 
 for this purpose. Session Laws, 1831-2, Ch. I, Sec. 2, p. 3. 
 
 17 Session Laws of Indiana, 1831-2, Ch. I, Sec. 4. 
 
 18 The act was passed Jan. 31, 1832. It directed work to commence 
 before March 2, 1832. Session Laws, Ch. CVIII, p. 113. 
 
 18 For an account of the celebration held and the address by C. W. 
 Ewing on that occasion, Cass County Times, March, 1832, Logans- 
 port. 
 
 20 Report of Commissioners, House Journals, 17 Session, p. 99. 
 Wabash Mercury, Lafayette, Sept. 26, 1833.
 
 49 
 
 and waterways proved the greatest obstacle." 1 By 1834 
 a small part near Fort Wayne had been completed and the 
 first canal boat launched. The first section of 32 miles from 
 Fort Wayne to Huntington was opened July 4, 1835." 
 But in the meantime it had been necessary to make 
 another loan of $400,000 to secure funds to continue the 
 construction. 23 
 
 Ohio experienced even greater delay than Indiana 
 before beginning her portion. As soon as it had been 
 ascertained that the canal must be a joint work of the two 
 states, commissioners were appointed by both. 24 In the 
 conference which followed, December 18, 1829, a compact 
 was formulated, subject to the ratification of the legisla- 
 tures of both states." It was agreed that Ohio should 
 commence her portion of the canal before January 1, 1835, 
 keep it in good repair, and charge no higher tolls to 
 citizens of Indiana than to her own citizens. In turn, 
 Indiana was to cede to Ohio her right to the lands granted 
 on the Ohio side.' 8 Indiana ratified the compact at its 
 next legislative session," but Ohio delayed action. The 
 state had already undertaken several canals connecting the 
 lake with the Ohio river and dreaded the canal com- 
 petition which would result from building another line." 
 Fear of the immediate expense of such a work added to 
 this inaction. Finally, after considerable correspondence 
 between the two commonwealths, Ohio accepted the con- 
 ditions of the cession, February 1, 1834. 29 Within a year 
 
 21 Reports of Chief Engineer, Doc. Journals, No. 6, 1836. 
 
 22 House Journals, 20 Session, p. 12. 
 
 23 Session Laws, 1834, p. 49. Transferable certificates of stock, 
 6 per cent, for 25 years, were issued. 
 
 24 W. Talmage for Ohio and Jeremiah Sullivan for Indiana. 
 2 " House Journals, 13th Session, No. 13, p. 14. 
 
 "Laws of Ohio, 1840-1, p. 200. 
 
 27 Session Laws of Indiana, 1829-1830, Ch. CXXV, pp. 172, 173. 
 
 26 Another cause of delay was the pending boundary dispute between 
 Ohio and Michigan which placed the jurisdiction of a portion of the 
 canal route at issue. 
 
 28 House Journal, Session 13, p. 30; ibid., Session 16, p. 17; ibid., 
 Session 18, p. 16; Session Laws of Indiana, 1832-3, pp. 223, 359; 
 Ohio Laws, Vol. 32, p. 44. 
 
 4
 
 50 
 
 a commission began the selection of lands and located the 
 route. Further surveys led Ohio to make the Maumee 
 bay the eastern terminus, and the remainder of its part 
 was put under contract during 1836."° 
 
 To the citizens of Indiana, these delays seemed unneces- 
 sary and prejudicial to the state's interests and caused at 
 the time some little friction between the two common- 
 wealths. 31 Both, however, soon experienced such diffi- 
 culties and fiscal embarrassments as to render any pro- 
 gress on public works almost impossible. The compact 
 of 1829 made the canal from the Maumee bay to the 
 Wabash river one work in commercial interests but in 
 two divisions with regard to its finances, construction, 
 and management. 
 
 As the Trunk Line of a General System of 
 Internal Improvements. 
 
 During the period from 1830 to 1835 the population of 
 Indiana rapidly increased. 1 This led to a correspondingly 
 greater need of facilities for transportation. The same 
 motives which had secured for the state the partially com- 
 pleted Wabash and Erie canal now led to the inaugura- 
 tion of a plan for an expansion of the state's public 
 works. Ohio's canal system begun in 1828 had proven 
 successful from the tax-payer's standpoint. The financial 
 success of the Erie canal aroused among the new states a 
 similar enthusiasm for internal improvements. It was 
 well known that New York had created a debt of 
 $10,000,000 for this purpose. The local newspapers 
 quoted Governor Marcy's statement in his annual mes- 
 sage where he said, " The revenue arising from these works 
 will in the short space of three years more than pay off 
 
 80 Ex. Doc, Indiana, No. 32, p. 5 ; Doc. Journals, No. 2, p. 2, 1837. 
 n Mitchell, Compendium of Canals and Railroads, p. 70, Phila- 
 delphia, 1835; Lafayette Free Press, Feb. 5, 1836. 
 1 U. S. Census, 1830 and 1840.
 
 51 
 
 every cent of their cost." J The same papers stated that 
 the tolls on the Erie canal for 1833 had amounted to 
 $235,000 and this in face of a reduction of 28 per cent, on 
 tolls.' These and similar representations were very potent 
 factors in pushing the state where its own needs and wants 
 already inclined it. 
 
 Accordingly, the proposed general system was pre- 
 sented to the legislature of 1835 by an act then popularly 
 known as the Mammoth bill, so called from the huge 
 proportions of the system proposed. The estimated cost 
 of the improvements projected by this bill was $5,910,000/ 
 The plan included an extension of the Wabash and Erie 
 canal from Tippecanoe to Lafayette, and a network of 
 connecting canals, railroads, and turnpikes. Discussion 
 upon the bill was animated. The whole principle of state 
 public works was freely discussed. 5 The question of rail- 
 roads or canals was again canvassed. However, the bill 
 failed at the first session, not because of a strong hostile 
 sentiment, but rather because of a demand for more defi- 
 nite information and for more mature deliberation. 
 
 A great deal has been written on this point and in most 
 cases the state has been accused of plunging hastily into 
 a wild scheme of internal improvement. Nothing is 
 farther from the truth. Such an action was just what the 
 state deliberately tried to avoid. Surveys were ordered 
 and the question was made an issue at the succeeding 
 election. A revolution in the means of transportation 
 and bad administrative methods were factors which the 
 community at large could not anticipate. 
 
 The legislature of 1835 took two important steps: it 
 
 2 Governor Marcy, 1834, annual message to legislature of New 
 York. 
 
 a Wabash Mercury, Lafayette, Feb. 27, 1834. 
 
 * Estimate of Mr. Wallace for the legislature. Detailed state- 
 ment of separate works published in Lafayette Free Press, Feb. 6, 
 
 183S. 
 
 6 Reports of Proceedings of General Assembly, published in Lafay- 
 ette Free Press, Feb. 6, 1835; Feb. 16, 1835. 
 
 UNIVERSITY OF 
 ILLINOIS LIBRARY
 
 52 
 
 appropriated $227,000 to extend the Wabash and Erie 
 canal from the mouth of the Tippecanoe river to Lafayette 
 and ordered a series of surveys to determine the feasi- 
 bility of the individual works planned in the Mammoth 
 bill/ 
 
 During the next summer and the campaign in the fall 
 this subject was uppermost. In the election of 1835 
 there were but two issues: an ad valorem tax and a state 
 system of internal improvements. Candidates announced 
 themselves as favoring or opposing these measures. The 
 arena of discussion was for the summer transferred to the 
 local gatherings and the public press. The system 
 planned was so generally distributed that nearly every 
 section contained some public work, 7 and. consequently, 
 there could be little opportunity for a dissatisfied, jealous, 
 local interest to develop any strength." The newspapers 
 presented again the various arguments relative to the 
 merits of railroads and canals.' England's experience 
 showing that its railroads yielded an income of from 
 6 to 9 per cent on investments in contrast to the canals 
 with 15 to 136 per cent, was presented. 10 Railroads, it 
 was said, could not sustain themselves in a new and 
 sparsely populated region; short lines might, in densely 
 settled parts at times, be valuable. 
 
 With the meeting of the General Assembly in Decem- 
 ber, the question became paramount in the halls of the 
 legislature. The speaker of the House in an address to 
 that body called attention to the seriousness and import- 
 ance of the subject upon which they were called to take 
 action. Leading members of both parties became ardent 
 
 * Session Laws, 1834-5. Ch. XVI. p. 25. 
 
 7 Only seven counties were without a navigable stream or some 
 contemplated public work. 
 
 * Logansport Telegraph, Aug. 22, 1835. Lafayette Free Press, July 
 3. ^835. and Sept. 2- ■ 
 
 '" Indiana Farmer." a series of articles widely copied in local 
 newspapers, contained a careful consideration of this question. 
 
 " See *' Indiana Farmer " in Lafayette Free Press, June 5, Aug. 14, 
 Aug. 27. Sept. 11, Dec 4, 1835.
 
 53 
 
 supporters of the measure. Governor Noble in his mes- 
 sage reported the favorable character of the various sur- 
 veys completed during the summer, and recommended 
 the expenditure of ten million dollars on such a system of 
 internal improvements. 11 Public opinion was thoroughly 
 in accord with such a movement. Without delay a bill 
 was introduced and enacted into law. 13 In the popular 
 branch the overwhelming majority of 65 to 18 voted for 
 the measure, and in the Senate there was a majority of 
 two-thirds." 
 
 The act created a Board of Internal Improvements 
 consisting of nine members so classified that the terms 
 of three expired each year. The members, appointed by 
 the governor, were to be assigned individual works over 
 which each was to be an acting commissioner. In his 
 appointments the governor was instructed to have regard 
 to the local situation of the nominee, so that each work 
 should be represented. This proved to be a fatal defect 
 of the administration. Each member of the board deter- 
 mined to complete the work of his home district at the 
 earliest possible moment. The work of construction 
 under the act reduced itself to a scramble to see which 
 one could finish his work first and thus secure the ap- 
 proval of his locality. The failure of the plan under such 
 a policy was inevitable. 
 
 The system was to be a combination of canals, railroads, 
 and turnpikes with the Wabash and Erie canal and the 
 Ohio river as the main arteries. Each separate work 
 was to have a termination at the lake, the Wabash canal, 
 or the Ohio river, the Wabash canal constituting the main 
 artery or trunk to the plan." The act extended the 
 
 11 Doc. Journal, 1836-7, Message Governor Noble, Dec 1836; 
 Lafayette Journal and Free Press, Dec. 18. 1833. 
 
 "Jan. 27, 1836. Session Laws. 1835-6. Ch. II. 
 
 11 Lafayette Journal and Free Press, Jan. 22, 1836; Niks' Regis- 
 ter, Vol. 44, p. 388. 
 
 14 Message of Governor Noble, Dec. 8, 1835 ; House Journal No. 20. 
 p. 12, and Doc. Journals, 1856, Pt. II, No. 23; Tippecanoe Journal, 
 Aug. 18, 1842.
 
 54 
 
 Wabash and Erie canal from the mouth of the Tippecanoe 
 river to Terre Haute and from thence by a section known 
 as the Cross Cut canal to the Central canal on the White 
 river." The Central canal as projected had its begin- 
 ning at Peru on the Wabash and Erie canal running 
 south by way of Indianapolis and thence down the White 
 river to the Ohio at Evansville. Later the portion of this 
 from the junction of the Cross Cut with the White river 
 at Evansville was built as an extension of the Wabash 
 and Erie canal." 
 
 To carry out this elaborate plan a loan of $10,000,000 
 on a credit of 25 years at a rate not to exceed 5 per cent, 
 was authorized. At this time the construction of the 
 Wabash and Erie canal was progressing slowly. To 
 secure its speedy completion from the Ohio state line to 
 the mouth of the Tippecanoe river, section 10 of the act 
 authorized the Canal Fund Commissioners to negotiate a 
 loan of $500,000." 
 
 The passage of this act was exceedingly popular, 
 " Hailed by its friends, as the dawning of a new era in 
 the history of our legislation, essential to the prosperity 
 of our people, and highly creditable to the character of 
 Indiana." " It was denominated by the state's chief 
 executive as an act which " has not been fastened upon 
 her by surprise nor imposed upon the people as the 
 hasty offspring of over zealous public agents. It was 
 
 10 Tippecanoe Journal, March 23, 1842. The length of the Cross 
 Cut canal as surveyed was 41^ miles. 
 
 18 For the Central Canal, 290 miles, $3,500,000 was appropriated, 
 and for the Cross Cut canal the amount was $1,300,000. Another 
 canal on White Water to connect Cambridge on the National road 
 with the Ohio river, 76 miles, was included with an appropriation 
 of $1,400,000. The system included a railroad from Madison to 
 Lafayette, $1,300,000; a macadamized road from New Albany to 
 Vincennes, $1,150,000; a railroad or turnpike from Jeffersonville 
 to Crawfordsville, $1,300,000; the improvement of the Wabash 
 river as a part of the system from its mouth to Vincennes, $50,000; 
 and a survey for a railroad or canal from Fort Wayne to Lake 
 Michigan. Session Laws, 1835-6, Ch. II, p. 6. 
 
 " Session Laws, 1835-6, Ch. II, Sec. 10. 
 
 1S Lafayette Journal and Free Press, Jan. 29, 1836.
 
 55 
 
 openly discussed for over two years, made the turning 
 point in our elections and as public sentiment demanded 
 it, with full knowledge of ulterior consequences, it may 
 be emphatically called the measure of the people." " 
 Some years later an attempt was made to lay the responsi- 
 bility upon political parties. But a search of the legisla- 
 tive records proves beyond a doubt its non-partisan 
 character. In the bitter controversies of more recent 
 years writers frequently project into this period their 
 own perspective. It is scarcely reasonable to demand a 
 foresight which should view in the few short lines of rail- 
 road then in existence, with their poorly constructed road 
 beds, the revolution already impending. It has been 
 suggested that the best vindication of the system lies in 
 the fact that every line then planned has been paralleled 
 by a railroad, and a paying one, too. 10 An attempt to 
 extend the system still farther the following year met 
 with speedy defeat. 21 We hold " any extravagant, 
 visionary, or vacillating policy to be ruinous to the state," s 
 said the senate committee in its adverse report upon this 
 measure. 23 
 
 Before the Wabash and Erie canal was completed to 
 the original terminus, the Tippecanoe river, the act of 
 1835 had extended it to Lafayette, and before this exten- 
 sion could even be begun it had been decided under the 
 general state system to make Terre Haute its southern 
 terminus. 2 * The work was carried along steadily by the 
 
 19 Governor Noble, Message of Dec. 5, 1836 ; Doc. Journal, 1836-, . 
 
 20 Dunn, J. P., Men of Progress, p. 34. 
 
 21 A measure really intended to be supplementary to the " Mam- 
 moth " bill and therefore popularly known as the " calf." It pro- 
 vided for 27 distinct works. Its main support came from log-rolling 
 among the legislators. Lafayette Free Press, Dec. 17, 1836, Jan. 
 6, 13, and 27, 1837. 
 
 22 These words are significant, as they are practically an expres- 
 sion of the imputation thrown against the original act of 1836. 
 
 23 Lafayette Free Press, Feb. 17, 1837, and cf. Governor's Mes- 
 sage, Dec, 1836. 
 
 "The selection of the mouth of the Tippecanoe as the southern ter- 
 minus had been based on the theory that this was the head of navi-
 
 56 
 
 Board of Internal Improvements. This canal had a great 
 advantage over the new parts of the system in having a 
 land grant * behind it and a small income from the 
 already completed portion." Ohio advanced more slowly 
 with its part. The financial embarrassment "throughout 
 the United States after 1837 put a stop generally to active 
 operation on public improvements. 27 Five years after the 
 contracts were let, 28 the legislature of Ohio directed the 
 Board of Public Works to proceed to the completion of 
 the Wabash and Erie canal. " Even amid the serious 
 embarrassments of the times, the state of Ohio will con- 
 tinue to make every exertion to fulfil her obligations and 
 promote the mutual interests of both states by an early 
 completion of this improvement " ran the slightly encour- 
 aging resolution of the General Assembly. 
 
 gation in all seasons. It was early realized that the Wabash river 
 was not navigable in all seasons so far up, and indeed it became in 
 time the prevailing idea that no part was satisfactory for a waterway, 
 and hence the further extension to Terre Haute and later to Evans- 
 ville on the Ohio. This change of view is not at all to be charged 
 to a shifting policy. A stream that was navigable to the flat boat 
 trade of the earlier frontier life did not satisfy the steamboat traf- 
 fic of later years and especially as increasing business enlarged 
 the size of these. But even more important in bringing about a 
 new conception of the place the canal must take and the location 
 of its southern terminus was the actually decreasing volume of 
 water in the Indiana rivers. As long as the region was heavily 
 forested, the matting of leaves and windfall conserved the rainfall 
 so as to maintain a considerable flow in the streams throughout 
 the year. The removal of these forests and the breaking of the 
 soil and subsoil drainage caused the rapid draining of the water 
 and decidedly decreased the volume of the streams during the long 
 summer season. 
 
 23 The state surveyed a route for the extension from Lafayette to 
 Terre Haute in the summer of 1835, presuming upon the right of the 
 state to select lands under the act of 1827. Lands were selected 
 accordingly and Congress was asked to confirm the action, which was 
 done. For survey see Ex. Docs, of Indiana, No. 32, 1835-6. For 
 Act of Congress confirming, U. S. Statutes, Vol. V., p. 414, Act of 
 Feb. 27, 1841. 
 
 26 The canal was completed to Wabash, July 4, 1837; Peru, same 
 month ; Logansport, Sept., 1838 ; Tippecanoe river, 1841 ; Lafayette, 
 July 4, 1843. 
 
 27 Annual Report of Ohio Board of Public Works, Dec. 30, 1839. 
 
 28 March 29, 1841, Laws of Ohio, Vol. 39, p. 200, 39th Session.
 
 57 
 
 From the completion of the upper sections the inter- 
 state character of the canal made it necessary to arrange 
 similar schedules of tolls by frequent communications 
 between the canal boards of Indiana and Ohio. Different 
 rates in the two states were regarded as a violation of the 
 compact whereby Indiana had ceded the canal lands to 
 Ohio, and uniform tolls were generally maintained 
 throughout the whole line.™ 
 
 Mismanagement and Collapse in the Panic of 
 "1873" 
 
 As soon as the legislature committed the state to a 
 general system of internal improvements, there was a great 
 eagerness on the part of the public to have every work 
 completed without delay. 1 Governor Noble urged at the 
 beginning of the following legislative session that, since 
 the system was being begun under favorable circumstances, 
 careful and wise financial planning was necessary; and fur- 
 ther, that the rapid disbursement of money would lead to 
 extravagance, high living, and then a reaction when the 
 system would become a burden.* These words uttered 
 when all was prosperous proved an all too true prophecy 
 of the actual mistake that was made by the state. 
 
 From the reports of the Board of Internal Improve- 
 ments, it appears that up to this time the land sales for the 
 Wabash and Erie canal had amounted to about 18 per cent, 
 of the total receipts. That is, the land sales furnished 
 about one-sixth of the funds and the other five-sixths were 
 secured by loans negotiated by the state. For the ex- 
 tension planned by the act of 1836, $241,742.58 was se- 
 cured from another loan. For the other parts of the sys- 
 tem, a bond issue of $950,000 more was floated. To this 
 
 29 Reports of Superintendent Wabash and Erie Canal, Part I, 
 No. 8. 
 
 1 Letter of Jesse L. Williams, Lafayette Free Press, Sept. 25, 1841 ; 
 Indiana Gazetteer, p. 25, Indianapolis. 1849. 
 
 2 Doc. Journal, 1836-7, Message of Governor Noble, Dec. 5, 1836.
 
 58 
 
 was added in 1837 for the general system, $1,650,000 and 
 for the Wabash and Erie canal east of the Tippecanoe river 
 $400,ooo. 8 In rapid succession the market was flooded 
 in the next year with a total of $1,800,000 for the general 
 system and in 1839 with $1,632,000. Of course, the rapid 
 sale of bonds for the general system affected disastrously 
 the market for the Wabash and Erie bonds and rendered 
 helpless the one work that could have become safe financi- 
 ally. 4 To add to the state's embarrassment, the price of 
 labor, provisions, and material increased the cost of the 
 various works far above the original estimates. At the 
 time these vast sums were being expended for construction, 
 very little was being returned to the state. One work only 
 was far enough advanced to yield an income. The Wa- 
 bash and Erie canal earned from tolls for 1838, $1,398.37, 
 though this was a sum scarcely sufficient to pay the salary 
 of one of the fund commissioners. 8 
 
 The attempt had been made to secure capital from abroad 
 by means of the state's credit, but the latter had been ex- 
 tended beyond the limit permissible by sound fiscal laws. 
 The authorities lost largely by selling bonds on credit. In 
 several cases the purchaser failed through unsuccessful 
 speculations to be able to meet his obligations to the state. 
 The general panic in business extended to these loan com- 
 panies. For instance, the Morris Canal and Banking Com- 
 pany of New York failed, owing the state on bonds, which 
 it had purchased on credit, $2,112,200.00. The failure of 
 other parties and institutions caused the state to lose in 
 the same way over $1,000,000 more.* The estimated loss 
 to the state in negotiating the sale of its bonds on credit 
 was $3,183,461.00, or a loss of 25 per cent, of the value of 
 the bonds offered for sale. Such losses wrecked the gen- 
 
 3 Revised Statutes, Indiana, 1838, pp. 133-4. 
 
 4 Tenth Census, U. S., Vol. VII, p. 618. 
 
 5 Doc. Journal, No. 23, Report of Fund Commissioners, 1838. 
 "Report of State Agent, Dec. 15, 1845, Ex. Doc, 1845; Louisville 
 
 Journal, Nov., 1841 ; Tippecanoe Journal, Dec. 1, 1841.
 
 59 
 
 eral system of internal improvements. All might have been 
 avoided had there been less haste in prosecuting the construc- 
 tion of the various works projected. 
 
 What was demanded for the success of the system from a 
 financial standpoint was the deliberate letting of contracts 
 so as to finish up works in connected sections at points 
 nearest the trunk line first and thus make these sections 
 self-supporting and at the same time relieve the state of 
 part of its burden. The letting of new contracts only so 
 fast as the state could assume by taxation the interest pay- 
 ments would have made the projected system safe and 
 comparatively easy. Instead there was the most precipitate 
 haste. Contemporary authorities put the case very clear- 
 ly. " The policy of constructing the works and parts of 
 works simultaneously was so well pursued, that no con- 
 siderable portion of any work was completed or fit for use. 
 ....There lies the system still, its unfinished excavations, 
 embankments, locks, culverts, aqueducts and bridges 
 hastening to ruin." 7 Somewhat later another wrote: "In 
 many places public works were commenced where there 
 was no surplus of labor or produce, where they did not 
 lead to a market, and where the lot speculator was the only 
 person who could be profited." 8 For such a mistaken 
 public policy, the blame can rest only in one place. The 
 Board of Internal Improvements yielding to outside pres- 
 sure committed a blunder in administering its trust. With- 
 out doubt the voice of the public supported its action, but 
 it was a time when a sound fiscal policy required that the 
 impatient demands of the interested citizens along the 
 several routes should be disregarded. 9 
 
 By 1839 the entire state system of public works was para- 
 
 7 Louisville Journal, Nov., 1841, copied in Tippecanoe Journal, 
 Lafayette, Dec. 1, 1841. 
 
 8 Indiana Gazetteer, 1849, p. 25. 
 
 8 The correspondence of the state's engineer, Mr. Jesse L. Wil- 
 liams, shows how contrary to his strongly expressed judgment this 
 policy was. Reports of State Engineer, 1836-39.
 
 60 
 
 lyzed. The state could not find purchasers for its bonds; 
 the contractors could not secure payments on their con- 
 tracts; the Board of Internal Improvements could not 
 meet its obligations, and consequently abandoned, in Au- 
 gust of 1839, all efforts to complete the public works. 10 
 The following year, the state issued $1,500,000 in treasury 
 notes to provide for the unpaid balances due the contrac- 
 tors. 11 With barely revenue enough to pay the ordinary 
 civil expenses, the additional annual interest account of 
 nearly a half million dollars could not be paid. 12 In Febru- 
 ary, 1841, the legislature, confronted by an unpaid interest 
 account and with as heavy a tax burden as its weakened 
 resources would apparently bear, cut the Gordian knot 
 by an issue of bonds to pay the interest on the public debt. 
 These were worthless under the circumstances, and when 
 tendered to the bondholders were nearly all rejected. 
 
 To secure partial relief and place the public works where 
 they might be completed to a paying point, the same legis- 
 lature authorized the organization of private companies 
 to own, complete, and operate all the unfinished portions, 
 except the Wabash and Erie canal which was to be retained 
 by the state. This act also abolished the Board of Internal 
 Improvements, the office of Fund Commissioner, and Chief 
 Engineer, creating in their stead a Canal Commissioner, 
 and also a State Agent to perform the duties of the Fund 
 Commissioners. 13 To increase the financial confusion, the 
 legislature attempted to sustain and give credit to its de- 
 preciated currency, land scrip," and treasury notes, 18 by 
 
 10 Governor's Message, Dec. 7, 1841, Doc. Journal, 1841-2. 
 
 11 Auditor's Report, Doc. Journal, 1845, Part II, No. 19. 
 
 "At this time the revenue from all sources, equaling $420,388.00, 
 was absorhed by the regular civil expenses; the annual interest ac- 
 count was $400,000.00 additional. See Tenth Census, United States, 
 Vol. VII, p. 620. 
 
 13 General Laws of Indiana, 1841-2, p. 3, Act. of Jan. 28, 1842. 
 
 14 There were several forms of land scrip : 
 
 a. A scrip based on the canal lands east of Lafayette, popularly 
 
 known as " White Dog." 
 
 b. Another issued on the lands west of Lafayette, known as 
 
 " Blue Dog."
 
 61 
 
 making them " receivable for all canal tolls and water rents 
 on the Wabash and Erie canal. 19 The measure failed to 
 add to the value of the currency but crippled the work of 
 construction and repairs on the entire canal by depriving 
 it of available funds." 
 
 By 1841, the state had piled up a debt of $13,148,453.00, 
 of which $9,464,453.00 was on account of the internal im- 
 provement system. 18 During the next five years this was 
 
 c. A third, a sort of shinplaster currency, known as " Blue 
 Pup." This was an unlimited issue in small denomina- 
 tions by the contractors for their convenience in paying 
 labor. It was based on " Blue Dog " and circulated quite 
 generally at greatly depreciated rates. 
 See Laws of Indiana, Jan. 1, 1842, Ch. V, p. 24; Niles' Register, 
 Vol. 15, p. 69; Tippecanoe Journal, Jan. 19, 1843, Feb. 16, 1843, Nov. 
 13, 1843, and Dec. 18, 1845; Doc. Journal, 1841-2, Message of Gov- 
 ernor, Dec. 7, 1841. 
 
 15 Issued in 1840, after suspension of public work to pay con- 
 tractors, bore interest at one-fourth of one per cent, and circulated at 
 about fifty cents on the dollar. Report of Commissioner, Part II, 
 No. 6, 1842. 
 
 18 Session Laws of Indiana, 1843. Cp. Tippecanoe Journal, Feb. 16, 
 1843. 
 
 17 Governor's Message, Dec. 7, 1841, Doc. Journal, 1841-2. 
 
 18 A detailed statement of the state debt to 1840, inclusive of the 
 state stock in the State bank, follows : 
 
 1832 for Wabash and Erie canal $100,000.00 
 
 1834 " stock to subscribe for State bank 500,000.00 
 
 1835 " Wabash and Erie canal 605,257.42 
 
 1835 " State bank 890,000.00 
 
 1836 " Wabash and Erie canal 241,742.58 
 
 1836 " General internal improvement system 850,000.00 
 
 1836 " The Lawrenceburg and Indianapolis railroad 100,000.00 
 
 1837 " The Wabash and Erie canal 380,000.00 
 
 1837 " General Internal Improvement system 1,650,000.00 
 
 1837 " Lawrenceburg and Indianapolis railroad 124,000.00 
 
 1838 " General internal improvement system 1,800,000.00 
 
 1839 " Wabash and Erie canal 400,000.00 
 
 1839 " General internal improvement system 1,632,000.00 
 
 1839 " State bank 1,000,000.00 
 
 1839 " State bank instead of fourth instalment of surplus 
 
 revenue which was to have been invested in 
 
 bank stock 294,000.00 
 
 1839 " Indianapolis and Madison railroad 455,000.00 
 
 1839 " Amount advanced by State bank on public 
 
 works 629,453.00 
 
 1840 " Treasury notes issued to contractors of public 
 
 works 1,500,000.00 
 
 Total debt $13,151,453.00
 
 rapidly increasing by unpaid interest. On the other hand, 
 it had to its credit about 200 miles of canal in use, yielding 
 $5,000.00 in tolls, two railroads yielding $26,000.00 more 
 annually, and several useless fragments of canals. The 
 Cross Cut canal and the southern division of the Central 
 canal, on which little had been accomplished, became inte- 
 gral parts of the Wabash and Erie waterway on its exten- 
 sion to the Ohio river. The other portions of the state 
 system were either purchased by private companies and 
 completed or abandoned entirely. 1 " This cleared the way 
 for the state to concentrate its efforts on the completion of 
 the Wabash and Erie canal to Terre Haute as provided in 
 the act of 1836. 20 
 
 Ohio's part of the canal was finally completed to Mau- 
 mee bay in 1843, the same year in which Lafayette became 
 the western terminus. Prior to this date the only traffic 
 was the small local trade. With the extension of the canal 
 to the lake, on the east, the through traffic which im- 
 mediately followed raised the income from tolls six-fold; 
 
 19 The state abandoned outright three of its works : The Jefferson- 
 ville and Crawfordsyille road, after expending $339,183.18; the Lafay- 
 ette and Indianapolis road after expending $73,142.87 ; the work on 
 the Wabash rapids after expending $14,288.42. The White Water 
 canal projected from Lawrenceburg to the mouth of Nettle creek, 
 76^ miles, was completed for 31 miles between the Ohio river and 
 Brookville. The work cost $1,099,867. It was later completed by a 
 private company and maintained in successful operation for some 
 years. Rents and tolls had brought the state $9902.41. The North- 
 ern division of the Central canal was sold to private parties in 1850 
 and 1851. It had cost the state something over $863,209.88. The 
 state received in tolls and rents $13,720.13. Similarly the Madison 
 and Indianapolis railroad passed into private control after costing the 
 state $1,624,603.05 and returning $63,182.32. No part of the Erie and 
 Michigan canal was finished. A feeder and surveys cost the state 
 $156,324.00 The water power of the Northport feeder dam was 
 available and that was conveyed to Noble county for school purposes. 
 On the Central canal between Indianapolis and Evansville, $574,- 
 646.49 was expended; on the Cross Cut, $436,189.88. See Doc Jour- 
 nals, Indiana, 1847, No. 2, p. T7 ; 1850, Part 1, No. I, p. 41 ; Indiana 
 Gazetter, 1849, pp. 26-7; Niles' Register, Vol. X, p. 40, March 20, 
 1841 ; Vol. II, pp. 293-4, Jan. 8, 1842. 
 
 "At the time the general system collapsed, $408,855.00 had been 
 expended on this extension.
 
 63 
 
 Indiana's share now became $60,000.00, Ohio's $35,000.00." 
 During 1844 a disastrous flood closed navigation for 
 two months, and the Superintendent's " report for the year 
 showed a decrease of 7 per cent in tolls. The tolls and 
 rents still fell short of furnishing an adequate income for 
 the ordinary repairs and maintenance by 27 per cent. Con- 
 sequently, the creditors could get no return from this 
 source, even in interest, for their investment. They looked 
 to the state for relief, but the state was crippled in its efforts 
 to provide adequate revenue through taxation because of 
 the stagnation in business and the general impoverished 
 condition after the panic. A recourse to increased ex- 
 portation, in order to bring enough money into the state 
 to make higher taxes immediately possible, was out of the 
 question; such a course demanded markets in the east for 
 its raw products. Unfortunately, just at this time, every 
 other state was in need of these eastern markets and was 
 flooding them. Distance and cost of transportation put 
 Indiana at a disadvantage. Under such circumstances, 
 the less scrupulous classes favored an immediate repudia- 
 tion of the entire internal improvement debt. 
 
 The Butler Bill: Repudiation or Resumption 
 Two problems presented themselves to the state of Indi- 
 ana in 1845 : one was to complete the Wabash and Erie 
 canal to a point where it was hoped the canal would become 
 a profitable work ; the other was to provide a way to manage 
 the state debt. In the solution of these problems, they 
 became inseparably connected. The preceding session of 
 the state legislature had expressed strongly the ultimate 
 
 "The length of the entire canal at this time was 215 miles; 144 
 miles were in Indiana and 71 in Ohio. United States Senate Docs., 
 No. 202, 28th Cong., 1st Sess., Vol. 4; Cp. Indiana Doc. Journal, 
 1841, Part II, No. 7, Governor's Message. 
 
 "To unify the interests of the sections east and west of Lafayette 
 and centralize the control, the offices of commissioners for the two 
 parts were abolished and a general superintendent was provided. 
 General Laws Indiana, 28th Session, 1843-4, p. 14.
 
 64 
 
 intention of the state to meet its obligation to the fullest 
 extent. It recognized the state's moral obligation in the 
 matter and admitted that a refusal to meet her plighted 
 faith given over her own seal was equivalent to a forfeiture 
 of her station in the sisterhood of states. 1 
 
 Indiana was not alone in her embarrassment. In Penn- 
 sylvania the unusual course of postponing the payment of 
 the domestic debt in order to pay the public debt had been 
 pursued. Ohio imposed a tax of 75 cents on the $100 to 
 meet the interest on the public debt. 1 Michigan's internal 
 improvement system had failed and the state was unable 
 to meet its interest demands.' The failure of Indiana and 
 Michigan, led the dissatisfied creditors, both European and 
 American, to appoint Charles Butler as their agent. 4 Butler 
 was commissioned to visit the two states and secure some 
 measure of relief for the bondholders. He first visited 
 Michigan, and after a partially favorable adjustment there in 
 1 842,* he turned his attention to Indiana. Before a Terre 
 
 1 Resolution of legislature on Public Debt, 1844-5. 
 
 3 Ohio had constructed canals at the following cost : 
 
 The Miami and Erie canal $8,062,880 
 
 The Ohio canal 4,695,203 
 
 Walhonding canal 607,268 
 
 Hocking canal 975,48i 
 
 Muskingum Improvement 1,627,018 
 
 Total canal debt $15,967,850 
 
 3 Pennsylvania, Maryland, Michigan, Mississippi, Illinois and In- 
 diana defaulted in their interest payments. Scott, The Repudiation 
 of State Debts, p. 228. 
 
 * Charles Butler, a New York attorney, was later the president of 
 Union Theological Seminary. "A History of Union Theological 
 Seminary " is the title of a recent publication which contains a 
 brief biography and collects into an appendix the series of letters 
 which Mr. Butler wrote to his wife while he was agent of the bond- 
 holders in Indiana. These letters are of incalculable value in 
 reconstructing the history of this critical period in Indiana. 
 There is a homely, familiar tone to his letters, frank and honest, 
 which convinces one that he believes himself that he represents 
 the moral side and that for him to win is to save the honor of the 
 state. At times the letters exhibit an almost pathetic anxiety lest 
 justice shall not be done. 
 
 8 The legislature of Michigan authorized a loan of $5,000,000 for a 
 system of improvements by an act of March 21, 1837. Much diffi-
 
 65 
 
 Haute audience in May, 1845, ne began his campaign by 
 suggesting a plan which would satisfy the state's creditors. 
 " Pay us by your state tax and otherwise a portion of the 
 interest on your public debt and we shall be willing to look 
 to the revenues of the canal for the balance " was his plea." 
 A convention of those interested in the completion of the 
 Wabash and Erie canal to the Ohio river followed a few 
 months later. 7 This was on the eve of the assembling of 
 the state legislature. The convention prepared a memorial 
 to be presented to that body in which it almost unanimously 
 endorsed the plan suggested by Mr. Butler, and recom- 
 mended as an additional feature that the bondholders ad- 
 vance a sum sufficient to complete the canal, taking its 
 revenues or the lands given by Congress as their security.' 
 Combining these two plans, the original suggestion of Mr. 
 Butler and the convention's additional feature regarding 
 the means for completing the canal gave a working 
 scheme. Henceforth the problem was to stimulate public 
 sentiment to action. From other parts of the state came 
 suggestions of a similar nature. The rumor spread that 
 the creditors would give further time, diminish the interest, 
 and make deductions from the principal in return for the 
 punctual payment of interest. Others argued that the state 
 could transfer in part payment of its debt such property as 
 its Bank stock, the Wabash and Erie canal, and its interest 
 in other improvements. The property would still be within 
 
 culty was experienced in disposing of its bonds, but finally they were 
 sold to the Morris Canal and Banking Co. and the United States 
 Bank of Pennsylvania. The latter agreed to pay for its portion by a 
 system of regular payments. The two companies failed before Michi- 
 gan had received more than about three hundred dollars in cash 
 per one thousand dollars of its loan. By the adjustment act of 
 Feb. 17, 1842, the state agreed to pay her creditors as much as 
 she had actually received from the banking companies to whom 
 she originally sold the bonds, with interest, repudiating the re- 
 mainder. See, The Repudiation of State Debts, Scott, pp. 161-4. 
 
 * From extract of speech in Tippecanoe Journal and Free Press, 
 Lafayette, Nov. 20, 1845. 
 
 7 The Convention met in Evansville, Ind., Nov. 4, 1845. 
 
 8 Tippecanoe Journal and Free Press, Nov. 20, 1845. 
 
 5
 
 66 
 
 the state and benefit commerce with the additional advan- 
 tage of better management under private control.* The fall 
 elections had pledged successful candidates in several coun- 
 ties to work for some provision looking toward the pay- 
 ment of the debt. 10 Repudiation or adjustment had been 
 flung at the people by the outside press." 
 
 It seems altogether probable that the sentiment through- 
 out the state at this time favored the payment of the debt." 
 A competent contemporary writer maintained that the poli- 
 ticians instead of the people stood in the way ; that a species 
 of demagogism was practiced when strong convictions for 
 payment should have been expressed to the taxpayers. 13 
 The legislature assembled Dec. I, 1845. Mr. Butler was 
 present at this time preparing to work for the claims of the 
 bondholders. He confessed to his wife in a letter that the 
 situation was almost hopeless : " The prospects are alto- 
 gether discouraging and almost everybody says that nothing 
 can be done." " It is really amazing to see what a paralysis 
 hangs upon the people." " It is certain that if the question 
 is not now settled it never will be; the people will go into 
 repudiation." M He soon came to the conclusion, however, 
 that though " The state is on the verge of repudiation . . . 
 they have not known it." " 
 
 To arouse this dormant public conscience became But- 
 ler's self-set task. 18 He formally introduced his case by 
 transmitting a statement for the bondholders to the Gover- 
 
 9 Tippecanoe Journal and Free Press, Nov. 13, 1845. 
 
 10 Ibid., Dec. 4, 1845- 
 
 " New York Tribune, October 18, 1845. 
 
 u Report of Joint Committee of Legislature, Doc. Journ., 1845, 
 No. 21, Pt. 11. 
 
 "Thomas Dowling in Tippecanoe Journal and Free Press, Dec. 
 
 4, 1845- 
 
 "Letters of Charles Butler, Nov. 29, 1844, A History of Union 
 Theological Seminary, p. 454. Subsequent citations to this work 
 will be made in the form, " Letters of Chas. Butler." 
 
 "Ibid., Dec. 10, 1845, p. 457. 
 
 16 " I am fully persuaded that it is only by addressing myself to 
 the conscience of the people, stirring that up and bringing that to 
 bear, that I stand the slightest chance of success." Letters of Chas. 
 Butler, Dec. 7, 1S45, p. 455.
 
 67 
 
 nor and legislature." The letter presented the grievances 
 of the creditors and set forth the following propositions*, 
 (a) interest remains unpaid for five years; (b) there is no 
 assurance of when and how the bondholders may expect re- 
 lief; (c) the revenues of the Wabash and Erie canal are not 
 being used to pay the interest on the loans, but diverted to 
 other channels; (d) it is unjust to make the tolls receivable 
 in a land scrip at par when the market value is only forty 
 cents on the dollar; (e) the bonds are in the hands of trus- 
 tees, guardians, retired and aged persons, widows, whose 
 reliance for support is on their income and the loss of which 
 falls heavily; (f) the state enjoys prosperity; (g) the times 
 are auspicious for action; (h) "The state cannot be con- 
 strained to make payment, in any manner, at the will of the 
 holders of her bonds, however pressing their necessities 
 may be; they are left to depend entirely for the fulfilment of 
 obligations, upon her own sense of honor and justice." 18 
 This letter was sent by the Governor to the legislature 
 where, according to Butler's own testimony, it was gener- 
 ally favorably received. 19 It showed him at once that there 
 were strong supporters M of an honest settlement. 21 
 
 A joint committee of the legislature was created and 
 before this body Mr. Butler was invited to present his pro- 
 posals. December 19, 1845, he outlined a plan of settle- 
 ment containing proposals which were in the main an 
 elaboration of his Terre Haute suggestions : a payment of 
 the interest in arrears on July 1, 1846, by certificate which 
 should be payable Jan. 1, 1851, or be funded at that time, 
 
 "Letter of Chas. Butler, Dec. II, 1845. Published in pamphlet 
 form, Morrison and Spann, Indianapolis, 1845. 
 "Letters of Chas. Butler, Dec. 11, 1845, p. 461. 
 
 19 Tippecanoe Journal and Free Press, Dec. 18, 1845 ; Letters of 
 Chas. Butler, Dec. 12, 1845, p. 464. 
 
 20 Letters of Chas. Butler, Dec. 7, 1845, p. 456. 
 
 21 It was about this time that General Joseph Lane, in the State 
 Senate, said that he would cut cord wood to pay his portion of the 
 public debt, rather than see Indiana dishonored. Nathaniel Bolton, 
 Early History of Indianapolis and Central Indiana, Pamphlet, Ind. 
 His. Soc, Pubs., 1853, p. 27.
 
 68 
 
 at the pleasure of the state with interest from January i, 
 185 1, at five per cent; during the same period the bonds to 
 bear three per cent, interest; for this two per cent, should 
 be secured by a tax of three mills on the dollar and a poll 
 tax of seventy-five cents, the other one per cent, to come 
 from the revenues of the Wabash and Erie canal ; in case of 
 a deficiency from the revenues of the canal, the shortage 
 should be funded January 1, 1851; the state was obligated 
 to complete the canal to the Ohio river within three or four 
 years; after 1851 the entire three per cent, should come 
 from taxation; for the remaining two per cent., the credi- 
 tors were to rely on the revenues from the entire Wabash 
 and Erie canal. The proposal expressed the confidence 
 that the revenues of the canal when completed would be 
 sufficient to make up the full five per cent, on all bonds, 
 besides leaving a surplus to be annually applied toward the 
 redemption of the principal. 22 His proposals received the 
 support of Governor Whitcomb in a special message to the 
 Senate. 28 At the following conference " of the joint com- 
 mittee, Butler defended his measure in detail. 
 
 His letters indicate that the outlook for his cause in the 
 House during the last weeks of December was more hope- 
 ful. But of the Senators, he says : " They have ever since 
 I came here made a dead set at me and are constantly rais- 
 ing questions. They want to prevent all action, some from 
 one cause and some from another. They wish to stifle the 
 movement, but it will go on by force of its own intrinsic, 
 mighty moral power." " It looks to one canvassing their 
 opposition at the present day very much as though it came 
 from men striving for a better bargain with the state's credi- 
 tors and doubtless often from persons trying to make poli- 
 
 "Doc. Journal, No. 21, Part II, 1845. 
 
 Governor Whitcomb, Dec. 23, 1845, and Letters of Chas. Butler, 
 Dec. 23, 1845, p. 470. 
 
 M Conferences of this committee which was composed of twenty- 
 four members were held daily. See Letters of Chas. Butler, Dec. 
 22, Dec. 23 and Dec. 24. 
 
 * Letters of Chas. Butler, Dec. 24, 1845, P- 47 2 -
 
 69 
 
 tical capital of the whole matter, while the state was look- 
 ing for a liberal proposition. A compromise was desired 
 and expected. 26 
 
 Christmas day, after two sessions of the joint committee, 
 that body reported to Mr. Butler its inability to accede to 
 the terms of his proposition. The committee claimed to 
 regard the payment of three per cent, on the whole debt by 
 taxation after 185 1 as beyond the ability of the tax payers 
 to meet. 27 Accordingly, Mr. Butler submitted on the fol- 
 lowing day his second proposition in the nature of a compro- 
 mise. His plan divided the debt into two parts ; one part 
 to be carried by the tax payers of the state, the other by the 
 revenues of the Wabash and Erie canal. It called for the 
 completion of the canal to the Ohio river and placed the 
 entire work under the management of a board of trustees. 
 The joint committee endorsed the proposal and presented 
 a strong plea for its adoption as most favorable to the 
 state. 28 This action transferred the battle to the halls of the 
 two houses. As the session drew to a close the excitement 
 grew more intense. " It excites such a deep and thrilling 
 interest, they cannot talk or think of anything else," wrote 
 Butler. 29 When a rough Hoosier Senator came in on Sun- 
 day to discuss this subject with him, he declined to talk. 80 
 Thereupon the Senator said he thought the matter was 
 " like lifting the ox out of the gutter, and that it was a work 
 of necessity and mercy." 31 This sentiment seemed to accord 
 with Mr. Butler's views, for the following Sabbath, he him- 
 self records a conference with Governor Whitcomb for an 
 hour on the moral aspects of the situation. He added in 
 
 26 Tippecanoe Journal and Free Press, Dec. 29, 1845. 
 
 27 Report of Joint Committee, Doc. Journ., 1845, Part II, No. 21. 
 !S Ibid. 
 
 28 Letters of Chas. Butler, Dec. 28, 1845, p. 478. 
 
 so Mr. Butler was usually very strict in his Sabbath observance. 
 During the forepart of the proceedings he steadily persisted in his 
 church attendance, at a time when all others were given over to 
 conferences and public business generally. 
 
 31 Letters of Chas Butler, Dec. 28, 1845, p. 478.
 
 70 
 
 a letter, 32 " As in Revolutionary times there are no Sabbaths, 
 so it seems to be here in debt paying times." 33 
 
 Two events controlled the actions of the legislature from 
 this point. The ninth of January was the date set for the 
 meeting of the state party conventions, and the legislators 
 were generally unwilling to take definite action until they 
 could obtain an expression of the attitude of their constit- 
 uents. The fifteenth of January having been set for the 
 final adjournment, all must be done before that time. It 
 seems probable that sentiment was slowly growing favor- 
 able to the bill, 34 though in the debates it was much mysti- 
 fied by various interpretations. By one class the altogether 
 mistaken position was assumed that the proposed $800,000 
 advance by the bondholders was a loan by the state and 
 must ultimately be repaid. 35 This frightened some of the 
 more timid. Dilatory tactics delayed action. Some held 
 that the people would at the conventions express themselves 
 as against present legislation. 36 
 
 The conventions met January 9, 1846. The Whigs 
 promptly took decided ground in favor of paying the state 
 debt as contemplated by the bill before the legislature. The 
 Democrats, on the other hand, were less united as to a 
 course of action on the state debt but finally after a spirited 
 debate committed the party to the support of Butler's pro- 
 position. 37 Four days later, however, the Democratic mem- 
 bers of the legislature held a caucus at which an amendment 
 to refer the bill to the people at the August elections was 
 adopted. 38 The Democratic majority in the House and the 
 Whig majority in the Senate made it impossible to pass the 
 
 "Letters of Chas. Butler, Jan. 11, 1846, p. 486. 
 
 33 Apropos of this phase of the question, on Jan. 4, 1845, Henry 
 Ward Beecher, then a pastor in Indianapolis, preached a strong 
 sermon advocating the cause of payment of the creditor's claims. 
 
 34 Letters of Chas. Butler, Jan. 4, 1846, p. 481. 
 
 35 Tippecanoe Journal and Free Press, Feb. 25, 1847. 
 38 Ibid., Jan. 8, 1846. 
 
 37 Letters of Chas. Butler, Jan. 9, 1846, p. 484. 
 
 38 Ibid., Jan. 10, 1846, p. 485; Tippecanoe Journal and Free Press, 
 Jan. 12, and Jan. 15, 1846.
 
 71 
 
 bill as a strictly party measure. Its success, therefore, be- 
 came dependent upon breaking the caucus agreement, 
 which was done only by the hard work of the Governor 
 and of a few Democratic friends of the bill when it came 
 up in the House on the following morning. 39 The act of set- 
 tlement when finally passed was a strictly non-partisan 
 measure. Old party lines were temporarily broken, and in 
 many cases new political ties were firmly made, four-fold 
 stronger, says one writer, than those which existed under 
 the old party names. 40 
 
 This act has been generally known as the Butler bill. It 
 divided the public debt into two parts. As to the one part, 
 the state agreed to pay the interest and ultimately the prin- 
 cipal out of taxation. For the interest and the principal of 
 the other half, the creditors consented to lpok to the reve- 
 nues of the Wabash and Erie canal. To insure the faithful 
 application of these, the canal was placed under the control 
 of a Board of Trustees, one chosen by the state legislature, 
 and two selected by the bondholders. 11 The state did not 
 surrender the work in fee to the bondholders, but, on the 
 contrary, placed the canal in trust for their benefit. The 
 law contemplated no other course save the ultimate pay- 
 ment of that half of the debt from the revenues of the canal 
 and the final return of the work to the state. 42 " If the in- 
 come," says Mr. Butler, " of the canal turns out to be suffi- 
 cient to make up the other two and a half per cent of inter- 
 est, the bondholders and people of Indiana will equally re- 
 
 setters of Chas. Butler, Jan. 13, 1846, p. 489; Jan. 19, 1846, 
 p. 495; Tippecanoe Journal and Free Press, Jan. 24, 1846. The 
 vote on the final passage was Jan. 16, 1846. 
 
 40 Ibid., Jan. 22, 1846; Jan. 29, 1846; Feb. 5, 1846. O. H. Smith, 
 Early Indiana Trials, p. 70, Cincinnati, 1858. 
 
 41 Two of the trustees were required to be citizens of Indiana. 
 
 42 As late as 1854, a competent observer and writer on economic 
 conditions in the West, says: "It is believed that the canal will 
 again pass into the hands of the state, by the ultimate payment of 
 the whole of her debt." Report on Colonial and Lake Trade, An- 
 drews, p. 314.
 
 . — the ::r~te: :: ; ■ : : -'--■ -~:ere;t an L 
 
 the latter because they pay in full. If the revenues fall 
 short, the bondholders will lose, and if they exceed, die 
 over-phis is to be paid into the state tri ismy, :o be apt: Bed 
 to the redemption of the principal." * Clearly to all parties 
 
 li . c . ! , - . . er. let .'..• . ." r. . • ~. _ "..".. _- — . . _". _ ^ . 
 
 in place of each $1,000 two certificates one for S500 drawing 
 five per cent, interest to be paid by taxation and anc 
 certificate for $500 drawing five per cent, in: hich 
 
 payable, principal and interest, out of the canal, its 
 lands and tolls. The former became a state stock and the 
 fatter a canal stock.* The law gave the bondholders no 
 more co ntr ol over the canal and its revenues than the 1 
 rttairte i 7.7 :-.:•:■: e_ ; vert rv-'ert the Mtti'. :: '..:'.: ::r the 
 mutual security of the state and its creditors. The s 
 reserved to itself the right of regulating the tolls, and at 
 any <™» in its pleasure to redeem the canal and close the 
 trust bv paying the balance on the debt. The unpaid in- 
 terest from 184J to 1847 ^^s hmded and certificates issued 
 i- tit : r. t.te :r.r*.r.i. :r.r.:.:i. 
 
 fiber the passage of the Butler bill it remained to be 
 seen whether the creditors would surrender their bonds 
 ir. : i::e:t the rerhertter.t rr.iie ':; :r.t:r irer.t. A:t:r. 
 was necessarily slow, for a majority of the stock was in 
 England. To gather this and to authorize agents in Amer- 
 
 :i t: ti.-:e i:t::r. :r. thtse 12; 5 ::' «'.:v.- ::rr.~ur.::£.t:ori _ e- 
 
 • F«piamtinn of the Bill by Ctas. Butler, p. 86. Morrison and 
 
 "" ~ :.z .!••:- :\-: - zzr.~ : 1: ::.t \uZjl. ■z.: ..i : ~' r \z-z.y :■-.'. 
 -:: z.-.:i— ■-'.-i.-.-zi :;• t.:.-t- iirry :: .:.z nr^i:- :r. : i^t . >.:- rr.:;: 
 :t : •:— ,z .-'. -.-. : - "t". :: :e:: — 1= r.-:- ;: i-y :: ::r.5::~r :'r.t :'.-=.:—« 
 :: --t :.:-iii:::tr: irvrr -_-.t r__.t ir.tr :r.t rV.'.jrt ::' --it 11 -3.'. 
 
 'There was die option with the state oi replacing each bond 
 ■«:*" 1 S : to: :tr:.".^".t ir.~ :i ' . " . :t" :tr." :~'t~t : : j:: _ . ".r.:5 
 •'--- ±- -i i: 1- : i-:-.'-tr : : - r.tr :tr.: '- : ~. :'r.t re.t-.-~ : :' lie 
 :i-i I-. :-■: i::-i. :-r;.:h:;: - : :re v..: ::: 5:i:e A,-: 
 i::::ti :..t : •-. ::' v : ;eti-i:e :er.:£:i.e:
 
 73 
 
 quired time. Before the terms were accepted a few minor 
 modifications were demanded. Accordingly, upon the 
 assembling of the legislature in December of 1846, Mr. 
 Butler was present to ask for amendments altering the 
 terms of subscription for the extension of the canal to the 
 Ohio river. The earlier act required a subscription of not 
 less than $2,250,000 to complete the canal. The amend- 
 ment stipulated that the bill should become effective 
 when bonds to the amount of $4,000,000 had been sur- 
 rendered and a subscription equal to 20 per cent of this or 
 $800,000 for the completion of the canal should have been 
 made. The bondholders demanded furthermore a priority 
 in payment to them of all their bonds surrendered under the 
 new law. 
 
 The presentation of these amendments reopened for a 
 brief time the whole question of the payment of the debt. 
 The weakness of the opposition is shown by the tactics 
 resorted to on this occasion.* 8 The bill as amended passed 
 without serious opposition January ij, i847, 4T and nothing 
 further stood in the way of a final consummation of the 
 plan. Mr. Dowling wrote from New York on May 7 that 
 the mails from England which had just arrived contained 
 the acceptance of the terms of the act. By May 11 the 
 bondholders elected their trustees, 48 and before the close 
 of that month $6,353,000 in bonds had been surrendered.* 9 
 
 The action of the legislature in enacting the Butler bill 
 was generally very popular at the time, 50 though certain 
 opponents adverted to the bonds fraudulently obtained 
 
 48 " British brokers," " British lawyers," " Tory agent," " lobby 
 influence " were epithets flung at the supporters of the measure. 
 Tippecanoe Journal and Free Press, Jan. 21, 1847; Jan. 28, 1847. 
 
 47 General Laws, 1846-7, Ch. I, p. 3. 
 
 48 Chas. Butler, of New York, and Mr. Thomas H. Blake, of In- 
 diana. 
 
 49 Tippecanoe Journal and Free Press, June 17, 1847. 
 
 50 " The cannon fired, the bells rang, the city was illuminated, and 
 all was joy and hilarity at the capital for weeks afterward." Early 
 Indiana Trials, O. H. Smith. The Senate of the United States en- 
 dorsed it as the best that could be adopted under the circumstances. 
 Senate Report, No. 86, p. 3, 1847-8.
 
 74 
 
 by the Morris Canal and Banking Company and contended 
 that these ought to be repudiated. In reply, it was held 
 that the state's authorized agent had placed the bonds in 
 circulation; that these had passed to other hands than the 
 original purchaser's; that they had been recognized as 
 binding and such compensation as a bankrupt company 
 could give had been accepted from the Morris Canal and 
 Banking Company; and that the question at issue was to 
 regain the credit of the state. 51 The situation was so simi- 
 lar to the one which called forth Hamilton's famous argu- 
 ments for the payment of the domestic debts by the Federal 
 Government as to lead to frequent comparisons. In the 
 compromise with the creditors all the conditions of a fair 
 settlement were apparently met. Somewhat more liberal 
 terms for the payment of interest being granted to the 
 state, and its responsibility for one-half the debt, principal 
 and interest, shifted for the time to the canal trustees, while 
 the creditors expected the ultimate payment of the debt in 
 full. As a result business interests profited as quickly and 
 completely as possible from any other plan of apparently 
 complete satisfaction to the creditors. State credit was im- 
 mediately strengthened. The value of its lands and tax- 
 able property increased. The stigma of repudiation and 
 financial dishonor was removed." 
 
 The Administration of the Trust 
 
 The Butler bill created a Board of Trustees to adminis- 
 ter the trust, 1 and when it met in May for organi- 
 zation, Mr. Charles Butler was chosen its first president. 2 
 
 51 Tippecanoe Journal and Free Press, Feb. 26, 1846. 
 "Memorial of Holders of Certificates of Stock, Doc. Journal, 
 Part II, No. 23, 1856. 
 
 1 Sec. 14, Act of Jan. 29, 1847. 
 
 2 Other officers of the board were Jesse L. Williams, of Fort 
 Wayne, Chief Engineer, and J. Ball, of Terre Haute, Resident En- 
 gineer. In addition, there were two superintendents to correspond 
 to the two general divisions east and west of Lafayette. Some 
 years later the canal was divided for convenience of superintend-
 
 75 
 
 The newly organized board of trustees was then author- 
 ized by the Governor to take possession of the canal and 
 after due formalities received charge of its trust July I, 
 
 1847.; 
 
 While the public attention was directed largely to 
 methods of settling the debt, the canal commissioners had 
 been slowly pushing the southern terminus forward. Con- 
 gress accepted the course taken by the state and each time 
 an extension was authorized permitted the state to select 
 lands as granted by the original act of 1827. 4 One of the 
 more popular features of the Butler bill was the clause pro- 
 viding a definite method of accomplishing the completion 
 of the waterway from the lakes to the Ohio river. Both 
 bondholders and citizens seemed to agree on the advisabil- 
 ity of the extension from a business standpoint. 5 
 
 Such was the status when the trustees took charge of 
 the canal. 6 They reported at the end of the canal season, 
 in their first annual report, that there still remained unfin- 
 ished 36 miles between Coal creek and Terre Haute with 
 little work done beyond that section; that the finished parts 
 were already in need of extensive repairs and renewals ; and 
 that they were obliged to begin these at a large cost. While 
 the canal was navigable to Coal creek, yet from Lafayette 
 south boats were unable to carry more than two-thirds of 
 
 ence into nine divisions with a superintendent in direct charge of 
 each. The general offices of the Board of Trustees were at Terre 
 Haute. See Annual Report of Trustees, Doc. J., Part II, No. 6, 
 1847; Dec, 1851, Doc. J., No. 7, Part I, p. 243; Tippecanoe Journal 
 and Free Press, July 1, 1847. 
 
 3 Report of General Superintendent, Doc. J., Part II, No. 1 1, 1847. 
 
 * Revised Statutes U. S., Vol. V, pp. 414, 731. 
 
 s Chas. Butler, Letter to the legislature, Dec. 19, 1845; Tippe- 
 canoe Journal and Free Press, March 23, 1842 ; Aug. 7, 1845 ; U. S. 
 Senate Docs. No. 202, 28th Congress; No. 78, 28th Cong., 1st Sess. ; 
 Ex. Docs., No. 83, 2d Sess. 28th Cong.; Cp. petitions to Congress, 
 Jan. 21, 1843, Jan. 25, 1844, Jan. 13, 1845. 
 
 6 The state still retained the following parts of its internal im- 
 provement system of 1836; New Albany and Vincennes turnpike; 
 Northern division of the Central canal ; Erie and Michigan canal. 
 All were controlled by a board consisting of the Secretary of State, 
 Treasurer, and Auditor. Auditor's Report, Doc. Journ. No. 2, 
 1847, p. 78.
 
 76 
 
 a load on account of the poor construction of that section. 7 
 The work of extension proceeded slowly and the canal was 
 not opened to its final terminus, Evansville, on the Ohio 
 river, until the spring of 1853. 8 When completed it was 
 458^ miles in length. 8 
 
 The period from 1847 to J 856 may be regarded as the 
 hey-day of the canal. Until 1853, there was a steady in- 
 crease in the income from tolls and water rents and a 
 decreasing annual average cost of repairs and maintenance. 
 The tolls and rents reached $193,400.18 in 1852. This was 
 the highest amount received from this source. From that 
 date the income steadily decreased. 10 
 
 Several factors contributed to a decided falling off in the 
 tolls for 1853. In 1852 the trustees arranged in conjunction 
 with the Ohio Board of Public Works for a 40 per cent. 
 
 7 Annual Report of Trustees, Doc. Journ., Part II, No. 5, 1847. 
 
 8 Ibid., Dec. 28, 1853. 
 
 9 Late in 1852 the citizens of Williamsport constructed a side-cut 
 and forcibly let the water in this, thus lowering the supply in the 
 main canal. This action was the culmination of an effort to compel 
 the trustees to construct side cuts in accordance with the original 
 plans. The trustees had successfully resisted mandamus proceed- 
 ings and the citizens then took forcible action. The effect was to 
 seriously and permanently impair the canal south of Lafayette. 
 Cp. Annual Report of Trustees, Doc. Journ. No. 7, part II, 1853. 
 
 10 Summary of tolls and rents during the continuance of the trust 
 and a comparison with the expectations as shown by an estimate of 
 the engineer in 1846: 
 
 Received. Estimated Income. 
 
 1846 $105,233-33 $150,000 
 
 1847 125,982.00 175,000 
 
 1848 146,148.90 225,000 
 
 1849 134,659.00 330,000 
 
 1850 I57J58.38 390.000 
 
 1851 179,282.76 425,000 
 
 1852 193,400.18 450,000 
 
 1853 181,206.98 475,000 
 
 1854 180,535.33 500,000 
 
 1855 140,399.53 500,000 
 
 1856 113,423.47 500,000 
 
 i860 65,073.83 500,000 
 
 1864 51,921.32 500,000 
 
 1868 47,529.69 500,000 
 
 1871 50,227.26 500,000 
 
 1873 17,086.94 500,000 
 
 1874 7,179.61 500,000
 
 77 
 
 reduction in the tariff of tolls. 11 This action was taken to 
 accord with the policy of the trustees to reduce the cost of 
 transportation to the lowest possible figure and thus increase 
 the popularity of the canal and discourage the tendency to- 
 wards railroad construction. The year 1853 was one of 
 inferior crops along the canal. In addition to these two 
 factors the following statement in the trustees' report is 
 significant of a more permanent source of loss, "A small 
 portion of the produce and merchandise hitherto taking the 
 canal as its natural channel has this year been drawn off 
 by newly opened railroads." 12 And again, " The antici- 
 pated addition to the revenue from the extension of the 
 canal to the Ohio river has not yet been realized." 1S Such 
 was the condition at this critical point. Causes over which 
 the administrative board had no control reduced the reve- 
 nues by nearly seven per cent, and increased the cost of 
 repairs and maintenance by five per cent. 
 
 Again, certain fundamental defects in the canal as a 
 means of transportation turned the tide against it. The 
 season of navigation was limited to less than eight 
 months; 1 * storm and flood interfered still further, and in- 
 terruptions of a fortnight or a month or even two months 
 were common events. Thus the products of the farm and 
 factory were too often forced to lie for weeks tied up in 
 shallow water or stopped by a broken embankment. The 
 canal had in the first place stimulated business enterprises, 
 and now as these grew stronger they demanded better 
 facilities. As a result, dissatisfaction with the canal in- 
 creased because it was inadequate to business needs. The 
 newspapers abounded in complaints of this character, and 
 with items describing " boats which scraped through," 
 and " boats aground." " 
 
 11 Annual Report of Trustees, p. 5, 1853. 
 
 11 Ibid., Dec. 28, 1853, p. 5. 
 
 "Ibid., p. 6; Cp. reports for 1849 and 1850, Doc. Journ. No. 11, 
 Part II, and No. 3, Part II. 
 
 14 Average for period 1846- 1858. 
 
 "Evansville Enquirer, May 28, 1856; Tippecanoe Journal and 
 Free Press, June 1, 1843; Aug. 21, 1845; Sept. 4, 1845.
 
 78 
 
 At this juncture when the canal was failing to meet the 
 business demands of the Wabash valley, capitalists from 
 the East began to construct a railroad from Toledo west- 
 ward, parallel to the canal. 16 Even earlier than this a rail- 
 road 17 had been begun from Evansville to Vincennes and 
 built northward toward Crawfordsville and Lafayette. 18 
 The result was that business men everywhere hesitated to 
 invest money in canal boats; new ones were not built to 
 take the place of those worn out and decayed, and men who 
 had made investments in canal property now got out of the 
 trade. The trustees were helpless, being prohibited by law 
 from all participation in the business of transportation. 
 They could neither own boats nor be concerned in their 
 ownership. This compelled them to rely solely on the enter- 
 prise of such private citizens as might choose to embark in 
 this traffic. 1 ' 
 
 The embarrassment of the trustees was greatly increased 
 by a decision of the state Supreme Court compelling them 
 to use the net revenues of the portion of the canal between 
 Lafayette and the Ohio state line to pay the interest on the 
 certificates of canal stock issued in place of the original 
 Wabash and Erie canal bonds. These certificates now 
 claimed a priority over the other bonds issued under the 
 Butler bill. The more serious feature of the decision was 
 that it deprived the board of funds greatly needed for re- 
 pairs." As a source of revenue, the rental of water power 
 along the line proved a failure. 21 
 
 18 The Wabash Valley railroad was completed to Lafayette, June 
 20, 1856. 
 
 "Annual Report of Trustees, Jan., 1853, Doc. Journ. No. 7, 
 Part II. 
 
 18 The canal south of Terre Haute was never fairly tested, as the 
 railroad was in course of construction almost at the time of com- 
 pletion of the canal. There were never more than 33 boats used in 
 the navigation of this portion. 
 
 18 Annual Report of Trustees, Jan., 1859. 
 
 20 The more valuable portion of the canal was east of Lafayette 
 and the effect upon the funds for ordinary repairs was disastrous. 
 Ibid., 1853, p. 8; 1856, p. 277. 
 
 21 Ibid., 1850, p. 144.
 
 79 
 
 The trustees' report for 1854 brought the same record 
 of disappointment. A slight increase in the gross tonnage 
 east of Lafayette told in a still more significant manner the 
 effect of railroad competition. Bulky goods like corn, iron, 
 and lumber — articles which paid light tolls — constituted its 
 main traffic. Goods which paid the highest tolls had been 
 diverted to the railroads to save time. " It is in the diver- 
 sion of this class of business that the revenues are likely to 
 be impaired by the railroad system," the trustees wrote. 21 
 Another consequence of railroad competition appeared 
 almost at once. Since 1843, when packet lines of boats had 
 been placed on the canal to take care of the passenger traffic, 
 this had grown to be a popular and valuable part of its 
 business. The railroads now did this so much more satis- 
 factorily to the traveling public that the packet lines were 
 entirely withdrawn. 
 
 For 1855, the canal tolls decreased 50 per cent from the 
 preceding year. Year by year recorded in rapid succes- 
 sion the passing of one product after another from the con- 
 trol of the canal. Hitherto, hogs dressed and packed along 
 the route had sought eastern markets, but with rapid 
 transit appeared at once the centralization of this industry. 
 Dressed hogs were sent in large quantities from Lafayette, 
 Terre Haute, and Evansville to Cleveland by railroad, there 
 to be cut and packed. In turn, pork in barrels and tierces 
 were returned by the packers to the various starting points, 
 destroying the business of local packers. 23 
 
 In spite of an effort to retain business by a still further 
 reduction of tolls the total tonnage rapidly declined more 
 than one-half in four years. 24 As the trustees put the mat- 
 
 22 Annual Report of Trustees, 1854, p. 807. 
 
 23 Ibid., 1856, p. 120. 
 
 24 1855 total tonnage, 252,152 
 
 1856 " " 308,667 
 
 1857 " " 149,473 
 
 1858 " " 200,472 
 
 1859 " " 137,819 
 
 Ibid., 1855, p. 120.
 
 80 
 
 ter, " The results of the year's business show too plainly 
 that the canal cannot successfully compete with the rail- 
 ways for that class of traffic, which from its greater value 
 in small bulk and weight can afford to pay a greater charge 
 for transportation." " 
 
 Public interest in the canal rapidly waned. The mer- 
 chants had come to realize that the railroads afforded them 
 a quicker, cheaper, and more certain communication with 
 the eastern cities. Of a particular consignment by railroad 
 it was said, " The time consumed in the carriage was mar- 
 velously short and comparison of freight bills quite satis- 
 factory to a due sense of economy." ! For weeks before 
 the railroad was completed to Lafayette, drovers held back 
 their stock for the new transportation. 27 In the month of 
 August, 1856, during one period of 24 hours, the Wabash 
 railroad carried into Toledo one hundred carloads of farm 
 products. 28 Corresponding losses resulted for the canal. 
 A further decline of fifty per cent in tonnage came in 1857. 28 
 The clearances at Fort Wayne and Lafayette scarcely 
 amounted to one-fourth of those issued at the same points 
 in 1854. 
 
 South of Terre Haute the disparity between the receipts 
 and expenditures was so great as to force the inquiry 
 whether the work could be longer maintained. 80 The fol- 
 lowing year, 1858, the holders of the canal certificates joined 
 in the recommendation that the canal be suspended south 
 of Terre Haute and petitioned for legislative relief giving 
 the trustees the right to sell the canal lands and receive for 
 them the certificates issued for the $800,000 advance." 1 The 
 
 25 Annual Report of Trustees, 1856, p. 276. 
 "Lafayette Daily American, June 12, 1856. 
 " Ibid., May 17, 1856. 
 
 28 Ibid.., August 23, 1856. 
 
 29 Report of Engineer, 1857-8, No. 3, Pt. I, p. 350. 
 
 '"South of Terre Haute — Expenditures, $40,556.86; revenues, 
 $7,998.35. North of Terre Haute — Expenditures, $5,694.46; reve- 
 nues, $60,165.08. See Annual Report of Trustees, 1857, p. 175. 
 
 " There were 135,000 acres of unsold land in this section, valued 
 at $276,713.30. Annual Report of Trustees, 1858, pp. 286, 289.
 
 81 
 
 trustees asserted that the canal as a whole could no longer 
 operate as a security for the bondholders nor could they 
 have any interest in it as such. 31 
 
 The worst phase of the canal's decline in business arose 
 from the loss of the return cargo. Boats from canal points 
 to Toledo found an abundance of bulky products with 
 which to load but they were forced to return empty because 
 the more valuable merchandise bound westward had been 
 diverted to the railroads. 
 
 The canal creditors held the state responsible for the 
 destruction of the trust. " Caused by the authority given 
 to private individuals to compete for the business of trans- 
 portation " was their indictment." They held that by the 
 statute authorizing private companies to construct railroads 
 the state had deliberately destroyed the very trust it had 
 pledged its faith to maintain inviolate; that this act obli- 
 gated Indiana to pay the bonds. This claim was a bitterly 
 controverted one. The creditors argued in a memorial 
 dated March 6, 1857, that the state had induced their accept- 
 ance of the terms of the act of 1847 under representations 
 that this was to remain the channel of transportation for 
 the Wabash valley, subject only to the competition of the 
 Wabash river. That the failure of the canal had not been 
 due to natural causes as extravagance, failure to complete 
 the canal, nor to a less rapid increase of population than 
 was expected, nor competition with the river; but to the 
 state's action in authorizing railroads. " Neither natural 
 causes nor depreciation arising from the creditors' own acts 
 but deliberate acts and authorization by charter to railroads 
 had ruined the creditors' security." The memorialists did 
 not question the right or spirit of the legislature's action, 
 but held that the state in choosing such a course did so at 
 its own cost and not at the cost of others ; that it could not 
 ignore interests which it had already created nor impair 
 securities which it had guaranteed from molestation and 
 
 "Annual Report of Trustees, 1858, p. 282. "Ibid. 
 
 6
 
 82 
 
 wrong; that in cases of this kind the state was bound to 
 make reparation." 
 
 In the consideration of this question it must not be for- 
 gotten, on the other hand, that the creditors took the canal 
 with the usual trade risks. As Mr. Butler, in seeking to 
 induce the legislature to accept his proposals, had said, 
 " If the revenues fall short the bondholders will lose." To 
 be sure, if the canal had been a successful enterprise, the 
 state would have realized all the benefits, while the bond- 
 holders could have received no more than the principal 
 and interest of the debt. Still both parties were satisfied 
 with the settlement of 1847 at the time it was made and 
 regarded it as final. Nothing in that agreement could 
 bind the state to neglect to provide for the development 
 of its own resources and to open new channels of communi- 
 cation absolutely essential to the welfare of its people in 
 order to preserve an antiquated public work. That there 
 was no legal obligation of the state under such circum- 
 stances there can be no doubt. That question has been 
 thoroughly considered by the Supreme Court in the case 
 of the Charles River Bridge Co. vs. Warren Bridge Co. 85 
 As to the moral obligation of the state to reimburse the 
 creditors because it had destroyed their security in order 
 to profit by a new system of transportation, there may be 
 a difference of opinion, but the prevailing practice to-day 
 is against recognizing such an obligation. At all events, 
 the state completely ignored the claims of the bondholders, 
 and took prompt action to make it more difficult for future 
 legislatures to recognize any obligation. 
 
 At the time of the debt settlement in 1847 one hundred 
 and ninety-one old Internal Improvement bonds, issued 
 between 1832 and 1842 for the construction of the Wabash 
 and Erie canal, were not surrendered and canal certificates 
 taken in their stead. That is, these had not accepted the 
 terms of the Butler act. Representatives of these now 
 
 "Annual Report of Trustees, Doc. Journ., 1857, Part II, No. 3. 
 80 Cp. the opinions of Taney, McLean, and Story in the famous 
 case of Charles River Bridge vs. Warren Bridge, 11 Peters, 420.
 
 83 
 
 brought suit in the Circuit court of Carroll county to enforce 
 a lien against the canal. 30 To allow the enforcement of the 
 lien was to deprive the canal stock holders of their trust by 
 state action and consequently force the state to a settlement 
 with them. That is, so far as the half of the debt resting 
 on the canal was concerned, to go back to the status of 
 1846. This was just what the state authorities desired 
 most to ward off. The legislature hastily assembled and 
 made provision for the payment of the old unsurrendered 
 bonds. 87 The whole matter caused considerable alarm, in 
 view of the inevitable failure of the trust, lest by some 
 means the state might be forced to assume again the canal 
 certificates as a part of its debt. To forestall such an action 
 an amendment to the constitution was ratified in 1873. 
 This forbade the passage by the legislature of any law or 
 resolution which should recognize any liability of the state 
 to pay or redeem any of the canal certificates. 38 
 
 In 1858 the trustees were called upon to meet a large 
 deficit, which was done by using the proceeds of lands be- 
 longing to the trust. 38 But, at best, this was only a tempor- 
 ary expedient. 40 As a climax an injunction was sued for in 
 the following year to restrain the trustees from using any 
 funds but tolls and water rents for repairs. The granting 
 of the injunction forced the trustees to use the proceeds 
 of the lands to the payment of the bondholders' advance 
 for the extension to the Ohio river. 41 
 
 38 Forty-one of these were held by John W. Garrett, of Baltimore, 
 who brought the suit. Doc. Jour. Ind., 1870, Part II, No. 10. 
 
 " Act approved Dtc. 12, 1872. 
 
 38 Ind. Doc. Jour., 1872, No. 7; Annual Report of Trustees, 1870, 
 Part II, No. 6; ibid., 1874, p. 6; Poore, Charters and Constitutions, 
 Part I, p. 527. 
 
 38 Tolls and water rents for 1858 were $63,996.44; expenditures 
 were $143,824.56; deficit amounted to $79,828.19. Annual Report of 
 Trustees, 1859, p. 287. 
 
 40 There remained unsold in the Vincennes district 135,000 
 acres of land valued at $276,713.30, and in addition $66,457.48 was 
 expected from principal, interest and unsold lands belonging to the 
 districts east and west of Lafayette. Annual Report of Trustees, 
 1859, P- 286. 
 
 u Ibid., 1858, p. 294.
 
 84 
 
 Strenuous efforts were made to curtail the expenses of 
 administering the trust. Employees whose services could 
 possibly be dispensed with were dismissed and other sal- 
 aries were lowered, but without the means to make the 
 needed repairs in the spring, the canal was useless. Only 
 the enterprise of a few citizens advancing money for repairs 
 made it possible to operate the canal during 1859. These 
 took contracts to make repairs, accepting the tolls and 
 rents as their security. 43 This policy was extended in 
 i860 by granting these citizen-contracts by sections for a 
 term of four years. It was hoped that in this way there 
 would be formed such a league of business men interested 
 in the canal as would make possible successful competition 
 with the railroads. The eastern section paid the con- 
 tractors very well but before the end of the first year those 
 on the southern section applied for release." An attempt 
 was made to keep open the portion from Newberry to 
 Terre Haute but in 1862 it became necessary to abandon 
 the entire canal south of Terre Haute. 44 The rapid de- 
 cline in its traffic is partly illustrated by the falling off 
 in the number of boats employed. Two-thirds of those 
 employed in earlier years were now decaying in the docks 
 or entirely destroyed. 45 
 
 Other attempts were made to sustain navigation on the 
 canal. In 1862 a contract was made with a company 40 
 to maintain the portion from Terre Haute to the Ohio state 
 line until 1873 on the same terms as the earlier contracts. 47 
 
 " Annual Report of Trustees, 1859, pp. 294-5. 
 "Ibid., i860, p. 273. 
 
 44 One year the city of Terre Haute gave a firm $1000 and the tolls 
 to maintain a short section between that city and the Eel river as 
 a municipal enterprise. An effort was made in 1862 to keep up the 
 40 miles of canal to Washington for the benefit of local merchants 
 by means of voluntary contributions. Annual Report of Trustees, 
 1862, p. 457. 
 
 45 The number of boats employed in 1854 was 300 ; for 1858, 175, 
 and for 1861, 100. Annual Report of Trustees, 1861, p. 385. 
 
 48 Hugh McCulloch, Alfred P. Edgerton and Pliny Hoagland con- 
 stituted this company. 
 
 4 ' That is, for the tolls and water rents.
 
 85 
 
 Financially this could no more succeed than the earlier at- 
 tempts. Repairs not immediately required were neglected, 
 and the canal gradually deteriorated. In the spring of 1866 
 these gentlemen admitted their inability longer to maintain 
 the canal without increased capital and extended repairs 
 beyond their ability. Accordingly, a stock company was 
 at once formed, composed of business men willing to sub- 
 scribe stock. The capital stock was $200,ooo. 48 The com- 
 pany agreed to maintain the canal until July 1, 1878. Such 
 a contract was for all practical purposes a surrender of the 
 trust to this company for a term of years. It collected 
 the tolls and rents and disbursed them. The trustees re- 
 served merely a control over the tariff of through traffic 
 tolls. So far as the creditors were concerned there was 
 no longer any object in the existence of the trust, unless 
 the arrangement should be successful enough to make the 
 canal profitable after the expiration of the contract in 1878. 
 The immediate result of interesting so many in the suc- 
 cess of the canal was to greatly stimulate its activity for 
 three or four years, but no business man would long sacri- 
 fice his need for more rapid shipping facilities to sustain 
 artificially an unpopular enterprise. 48 After 1869 the com- 
 pany lost money each year that it attempted to keep the 
 canal open. 50 By 1873 through traffic was impossible. 
 " The canal," the trustees wrote, " has been less productive 
 of revenues, and conferred less benefit upon the country 
 and its shipping interests than during any preceding 
 year." n The disconnected sections could not have been 
 kept open during 1873 except for aid given along the line. 
 
 48 Three hundred and seventy-nine individuals subscribed $158,525 
 capital stock. The company was represented by a board of man- 
 agers of one for each $10,000 of stock. From this board an inner 
 executive committee was selected and a general superintendent 
 chosen. 
 
 "Report of Trustees, 1867-8, p. 3; 1869-70, p. 5. 
 
 80 The status of a canal having no deep water connections at both 
 ends is quite different in competition with railroads from one like 
 the Erie or the Sault Ste. Marie. 
 
 81 Report of Trustees, 1873, P- 6.
 
 86 
 
 The legislature at its session in 1873 authorized counties 
 along the route to subscribe funds to its aid. Under this 
 law a sum sufficient to keep the canal open for the year was 
 secured, 82 yet even this relief was but temporary. The canal 
 company had lost so heavily BS that it intimated at the end of 
 1873 the intention of abandoning its contract, and, accord- 
 ingly, did not reopen the canal in 1874. 54 
 
 During 1874 the trustees, on their part, made no at- 
 tempt to do more than protect the property and maintain 
 navigation as far as the tolls and rents would allow." The 
 canal was in a bad state of repair. Locks everywhere 
 needed rebuilding, and the entire canal required a thorough 
 dredging. 58 The engineer estimated that $500,000 would 
 be necessary to put it in shape for further use." Traf- 
 fic had become purely local. 58 It was clearly recognized 
 that the trust must fail and the canal be abandoned entirely. 
 
 The bondholders, hopeless of securing any recognition 
 from the state, with a bankrupt canal on their hands, 
 brought suit in the United States Circuit court to secure 
 the sale of the canal for the benefit of the stockholders. 
 This did not, of course, apply to the portion of the canal in 
 Ohio which had, since its construction, become a part of 
 the Miami and Erie canal system. That is, the Ohio 
 portion of the Wabash and Erie canal, a strip twenty miles 
 in length, was for administrative purposes a part of the 
 Miami canal, and until 1861 was under the management 
 of the Board of Public Works, when, in conjunction with 
 
 M The counties subscribed $50,000, and $40,216.15 was expended 
 on the canal. Report of Trustees, 1873, p. 3. 
 
 53 The Canal Company expended, 1866-1874, $436,345.52 for main- 
 tenar~~; it received in tolls and rents $274,019.41, together with 
 $40,216.13 from county donations. There was a loss of $122,109.98. 
 Report of Trustees, 1874, p. 4. 
 
 "Engineer's Report, Ex. Doc. No. 14, Part II, 1874, p. 16. 
 
 "Annual Report of Trustees, 1874, p. 3. 
 
 M Ibid., p. 22. 
 
 "Report of Engineer, 1874, p. 10. 
 
 58 Ibid., pp. 10-15.
 
 8? 
 
 Ohio's other canals, it was leased to a company for ten 
 years. When the Wabash and Erie canal was abandoned 
 in 1874 the Ohio section was in good condition and repair, 
 but the abandonment in Indiana practically destroyed that 
 in Ohio as far as the junction and depreciated greatly the 
 value of the canal from that point to Toledo. For some 
 years a short spur westward from the junction to Antwerp, 
 Ohio, was operated. That state complained bitterly of 
 Indiana's failure to maintain her part of the canal as a 
 breach of the compact made with the United States and 
 with Ohio itself.™ The suit of the Indiana bondholders, 
 just referred to, took the form of enforcing a lien against 
 the property pledged for the payment of the certificates. 90 
 As a result the court ordered the sale of the canal. The ac- 
 counts were transferred to the court and a receiver was 
 appointed. The property with the right of way and lands 
 was sold to speculators, 81 but no attempt was made to re- 
 pair and maintain the canal. The water-power at several 
 points continued for some years to furnish a small income 
 to its purchasers. The canal rapidly fell into complete 
 ruin. The bondholders received from the sale about 9^2 
 per cent, of their investment. 62 Various suits over land 
 title made the process of closing the receivership a tedious 
 matter. 83 As a money-making institution the canal had 
 
 s 'Ohio Ex. Docs., 1857, Pt. I, p. 467; ibid., 1858, Pt. II, p. 112; 
 ibid., 1862, Pt. II, p. 575; ibid., 1874, Pt. I, pp. 574-575 ; ibid., 1875, 
 Pt. II, p. 689; ibid., 1881, Pt. I, p. 1083; and Cp. Annals of the Am. 
 Acad., IV, Part II, p. 34. 
 
 80 Gapen vs. Trustees, filed Nov., 1874. 
 
 "Canal sold, Feb. 12, 1877. 
 
 82 1854 — Trustees paid bondholders 20 per cent instalment on 
 $800,000 subscribed to complete the canal. 
 
 1855 — Trustees paid 10 per cent instalment. 
 
 Received from sale of canal $96,260.00 
 
 May .23, 1878, first dividend, 8 4-10 per cent 66,033.25 
 
 Second dividend, 1 1-8 per cent 8,174.08 
 
 03 Receiver's petition for discharge accepted Oct. 2, 1897.
 
 88 
 
 failed." Its economic, social, and political influence re- 
 mains to be considered. 
 
 84 Fiscal Summary, Wabash and Erie canal, 
 
 Expenditures: 
 
 For construction to July I, 1847 $4,062,573.14 
 
 For construction, July 1, 1847-Dec. 1, 1874 2,375,236.62 
 
 Paid in interest 605,370.93 
 
 Ordinary repairs 631,000.05 
 
 Extraordinary repairs 211,411.11 
 
 Salaries and office expenses 373,652.18 
 
 $8,259,244.03 
 Receipts : 
 
 From lands and revenues to 1847 $i,573. I o6.33 
 
 From lands and revenues, 1847-1874 3,904,132.08 
 
 $5,477,238.41
 
 CHAPTER III 
 
 INFLUENCE ON THE DEVELOPMENT OF THE OLD 
 NORTHWEST 
 
 It is only within recent years that historical writers 
 have given proper consideration to the influence of 
 physical geography upon national history. The general 
 relation between natural routes of trade and travel, and 
 national expansion is now quite fully recognized. Writers 
 have repeatedly emphasized the basic principle underly- 
 ing the territorial growth of the United States: that mi- 
 gration, settlement, and the succeeding commercial and 
 social communication have taken place along those lines 
 which offered the least resistance to such movements ; that 
 these physical factors have not only determined the loca- 
 tion and course of the westward movement, but by facilitat- 
 ing communication they have bound section to section and 
 have hastened the assimilation of inflowing foreign popula- 
 tion. But very little has been done to present adequately 
 the influence of individual highways like the Erie canal, 1 the 
 Pennsylvania State canals and inclined tramways between 
 Philadelphia and Pittsburg, the National road,' and the 
 Chesapeake and Ohio canal," or rather the earlier routes 
 which suggested these later artificial works. Moreover, 
 almost nothing has been written of the western connec- 
 tions of these highways. 
 
 In any attempt to write the history of the Old North- 
 
 1 Poor's Railroad Manual, 1876-7 and 1881. The Canal System of 
 New York, McElroy, 1881. Mervin S. Hawley, Origin of the Erie 
 Canal, Pamphlet, Buffalo, 1866. 
 
 2 T B. Seabright, The Old Pike, 1894. 
 
 ' Ward, The Chesapeake and Ohio Canal, Johns Hopkins Uni- 
 versity Studies, 17th Series, 1899.
 
 90 
 
 west or indeed of the larger middle West, 4 it does not 
 suffice to trace the inflow of the immigrants through the 
 great Appalachian gateways. The story is but half told 
 when the population is carried across the great eastern 
 mountain barrier separating the Atlantic coast settlements 
 from the broad expanses of the interior plains. There are 
 certain distributing forces which must be taken into ac- 
 count. The tide of westward movement flowed now 
 faster now slower, now hither and now thither for very 
 definite reasons. At one time the flow is far around into 
 the interior by circuitous routes, 8 again it sets directly 
 across the mountains into the Ohio valley by central 
 routes," and finally it pours steadily into the north of this 
 territory by the Erie canal and the lakes. From which- 
 ever gateway the settler entered, he always found some 
 valley or some navigable waterway to invite him to push 
 onward. 
 
 The Wabash route formed one of these natural highways. 
 To the French colonial system which involved magnifi- 
 cent distances it was of the utmost importance, offering 
 a direct course for travel and trade between its empire on 
 the Mississippi and New France. The French colonies 
 never became vigorous, self sustaining, and economically 
 independent settlements; but the degree of stability at- 
 tained and the marvelous rapidity with which French in- 
 stitutions swept over the great valleys of the West were 
 only possible where interlacing water-courses made com- 
 munication from post to post both easy and speedy. It 
 is not too much to assert that the physical geography of 
 North America was the greatest factor in determining the 
 history of French colonization in the new world. 7 It is, 
 
 *The valleys of the Mississippi, the Missouri and the Arkansas 
 invite the same consideration of the influence of individual natural 
 and artificial highways, with this difference, that coming late in the 
 era of expansion the emphasis should be placed almost wholly on 
 great interstate lines of railroad. 
 
 8 By the Ottawa river and the upper lakes. 
 
 "The Potomac route or the Pennsylvania overland trail. 
 
 T N. Y. Col. Docs. V, pp. 726-7.
 
 91 
 
 however, to be noted that all the interior waterways were 
 to the French only canoe courses and as such never came 
 to carry any considerable volume of trade. It is not the 
 volume, but the fact of any trade and communication at 
 all that is significant. The movement of merchandise for 
 Indian barter and of the inhabitants between trading posts 
 and missions was obviously essential to any economic pro- 
 gress or to any centralized political system. 
 
 Such routes were immensely more important in the era 
 that preceded the construction of railroads than in the 
 years since these have, in a measure, overcome the in- 
 fluence of physical barriers. A century or more ago, a 
 river or a sea coast was a boon of great value to a country, 
 far beyond their present significance. The physical geo- 
 graphy of the great valleys is the key to the French method 
 of occupation in America. Its great interlacing water- 
 ways drew the hardy adventurous voyagers ever farther in- 
 land until a great empire was held under an attenuated 
 colonial system. These nature-made canoe paths invited 
 the settler to the less arduous, more romantic life of the 
 trader instead of the planter. The sturdy husbandman of 
 the English colonies became with the French the coureur 
 de bois. 
 
 When the English came to possess the great interior ter- 
 ritory and to plant homes in the place of the trader's post 
 and the priest's mission, the value of the commercial routes 
 increased rapidly. Elsewhere it has been shown 8 that the 
 Wabash and Maumee rivers connecting a chain of trading 
 posts and settlements * were in continuous use by the Eng- 
 lish in the brief period in which they possessed that terri- 
 tory. The British occupation of the frontier posts for 
 many years after the Revolution and the hostility of the 
 neighboring Indians, doubtless due in part to the insti- 
 gation of emissaries from the English posts, turned the 
 
 See ante p. 31. 
 
 Detroit, Fort Miami, Ouiatanon and Vincennes.
 
 92 
 
 western immigrant away from the lake region for many 
 years. 10 Indeed, with the American Revolution the Wa- 
 bash route ceased for a long period to exert any con- 
 siderable influence in a political sense, limited as the 
 trade must have been to the trapper and fur dealer. 
 Other channels took its place in directing the course of 
 immigration and the rising commerce. The bulk of traffic 
 moved by Pittsburg to the Ohio valley until the construc- 
 tion of the Wabash canal gave this route once more its 
 former prominence. 
 
 The Old Northwest territory is peculiarly adapted to the 
 development of a system of canals. The broad strip 
 stretching between the Ohio river on the south and the 
 lakes in the north is to a remarkable degree void of eleva- 
 tions deserving the name of mountains or even, with 
 some exceptions near the border to the east and south, of 
 prominent hills. Throughout it is a vast plain with slug- 
 gish streams. Broad alluvial valleys follow the larger 
 streams and invite the construction of canals and railroads. 
 Over a large portion the inclination is so slight as to 
 necessitate drainage to make agriculture profitable. 
 Through such a country canal construction was naturally 
 economical. Few locks were necessary. Material like 
 timber and stone was close at hand." 
 
 The friends and promoters of the Wabash and Erie 
 canal understood clearly the influence such a work would 
 have on the development of the Northwest. Prophecies 
 were abundant. 12 Everywhere the same high expectations 
 for the future of the region, if the canal should be con- 
 structed, were expressed. The messages of governors 
 became almost panegyrics in their recommendations 
 to the legislatures. Legislative committees issued long 
 reports on the subject. Aspiring politicians and members 
 
 10 Justin Winsor, The Westward Movement, p. 412. 
 
 11 H. S. Tanner, A Description of the Canals and Railroads of 
 the United States, New York, 1840. 
 
 12 Tippecanoe Journal, July 28, 1842 ; Toledo Blade, June 17, 1842.
 
 93 
 
 of Congress alike indulged in wild and extravagant as- 
 sertions of the inevitable benefits to accrue to the com- 
 monwealth from the construction of the canal. Such was 
 the general enthusiasm at the start. 
 
 It was not long after its construction, before the Senate 
 Committee on Public Lands bore testimony to the fact that 
 the building of the canal had enhanced the value of real 
 estate, increased greatly and rapidly the population, pro- 
 moted agricultural industry because it was now better 
 rewarded, and facilitated and fostered commerce between 
 the states. 13 But better than the assertion of the Federal 
 Senate committee are the records of the United States 
 Census and Public Land Office for the district of Indiana. 
 The rapid increase of the value of real and personal prop- 
 erty in the state during the years marked by the rise of 
 canal traffic is clearly shown by these documents. 14 A 
 period of twenty years, 1840 to i860, marked an increased 
 valuation of more than five-fold. Again, the average an- 
 nual public land sales in Indiana point to the same rapid 
 development." During one year, 1836, when popular en- 
 thusiasm was at its highest more than three million acres 
 of land were sold. 16 Perhaps these facts can be taken as 
 indicating economic influences in a general way. Natur- 
 ally the land sales reached a maximum at an early period, 
 while the wealth of the state became more conspicuous in 
 
 13 Senate Document, No. 202, 28th Cong., 1 Sess., Vol. IV, March 
 iS, 1844- 
 
 14 Real and personal valuation in state : 
 
 For 1840 $100,000,000.00 
 
 For 1845 120,000,000.00 
 
 For 1850 202,650,264.00 
 
 For i860 528,835,371.00 
 
 See Preliminary Report, Eighth Census, p. 195; Niles' Register, 
 March 20, 1841, Vol. X, p. 40. 
 
 15 Average annual land sales by periods of five years : 
 
 1820-24 i99,93i-35 acres. 
 
 1825-29 233,898.59 acres. 
 
 1829-34 561,194.22 acres. 
 
 T834-39 1,441,354-33 acres. 
 
 See Ex. Doc. U. S., 1 Sess., 26th Cong., Vol. Ill, No. 120, p. 8. 
 "3,016,960 acres. See Tenth Census, Vol. VII, p. 618.
 
 94 
 
 the years when the canal trade had had an opportunity to 
 develop. The fact must not be ignored that these statis- 
 tics are for the entire state, though the greater proportion 
 of the land sales were in the Wabash valley. 17 Other 
 states have developed as rapidly, but not without natural 
 or the equivalent artificial aids for travel and trade. 
 
 It would be a mistake to attribute this rapid growth 
 wholly to the Wabash and Erie canal, or to the system 
 of improvements in Indiana. The completion of the Erie 
 canal opened the West to the East, doing more than any 
 other one factor to stimulate such a movement of the pop- 
 ulation. The Wabash canal like the Ohio canals was 
 merely a branch of a great trunk system of which the 
 Erie canal and the lakes were the main stem, turning 
 home-seekers and business into Indiana instead of else- 
 where. The Ohio canals did as much for Ohio. 18 This re- 
 lation between the Erie canal and the western canals is 
 illustrated in Governor Clinton's correspondence with 
 Major Stickney. The latter had communicated to Clinton 
 in 1818 his project for the Wabash canal. Governor Clin- 
 ton replied with considerable enthusiasm, " I have found 
 the way to get into Lake Erie and you have shown me how 
 
 to get out of it You have extended my project 
 
 six hundred miles." 1B 
 
 When the first work of construction was begun the up- 
 per Wabash valley was a wilderness, 20 but within a decade 
 following it was peopled with industrious and enterpris- 
 
 17 Ex. Doc. U. S. 1 Sess., 20th Cong., No. 120, p. 4. 
 
 1S The Miami canal connected Cincinnati with Toledo ; the Ohio 
 joined the Ohio river at Portsmouth with Lake Erie at Cleveland. 
 Shorter branches completed the network. These two main lines 
 crossing the state distributed business and population more evenly. 
 
 18 H. L. Hosmer, Early History of the Maumee Valley, p. 23. 
 The portion quoted is from MS. autobiography of Major Stickney. 
 
 20 Lafayette Free Press and Commercial Advertiser, Feb. 6, 1835; 
 Committee on Canals and Internal Improvements, House Journals, 
 1835; Statistical Atlas, Ninth Census, U. S., Plate XVI; Knapp, 
 History of the Maumee Valley, p. Z2>2-
 
 95 
 
 ing citizens from various localities. 21 The counties bor- 
 dering on the canal route, having a total of scarcely 12,000 
 inhabitants at the time the canal was first opened," con- 
 tained at the close of a decade a population of 60,000 and 
 grew within the next ten years to have 150,000 people. 23 
 While the broader belt including all the region served 
 by the canal had by 1840 a population, according to an 
 estimate from the official reports of the state, of 270,000 
 persons, averaging I2>4 to the square mile. 24 In the three 
 years which followed the completion of the first section 
 from Ft. Wayne to Huntington 25 five new counties were 
 organized along the route. 28 
 
 The canal counties show the same relative increase, 
 whereas counties well away from it, though showing the 
 natural increase incident to new countries and to such 
 facilities of trade as were offered, did not increase in nearly 
 so high a ratio. Taking Noble and Huntington counties 
 as typical cases, the difference in the rapidity of devel- 
 opment is noteworthy. Huntington county was a canal 
 county. Noble, on the other hand, was well outside of 
 the canal district but offered far better natural advantages. 
 For the years 1840 to 1850 the rate of increase in Noble 
 county was 190 per cent, as opposed to 397 per cent, in 
 Huntington county; and this is to be regarded as an ex- 
 tremely conservative case. Comparison can fairly be made 
 with only such counties as were at the same stage in their 
 development. The entire state was benefited more or 
 less directly by the Wabash and Erie canal, and so general 
 was the system of internal improvements in the Northwest 
 that it is impossible to find a county with average natural 
 
 21 George W. Ogden, Letters from the West, pp. 80, 81 ; Steele, 
 Western Guide Book and Emigrant's Directory, pp. 1-26; Steele, 
 A Summer Journey in the West, pp. 78-84. 
 
 22 1835. " U. S. Census, 1830, 1840, 1850. 
 
 24 H. S. Tanner, A Description of the Canals and Railroads of the 
 United States. 2B 1835- 1838. 
 
 28 Whitely, Adams, Wells, Wabash and Howard. Four others, 
 Clinton, Miami, Huntington and Grant, had been organized since 
 the act of 1828 had determined the location of the canal.
 
 96 
 
 advantages entirely uninfluenced in its development by 
 such works. 
 
 To a certain extent, the canal, making possible the in- 
 crease of the population in the region it traversed, then 
 supplied the increase. An examination of the immigra- 
 tion statistics shows beyond a doubt that certain influen- 
 ces stimulated immigration to the United States during 
 certain years and inferentially these were, in part at least, 
 the opportunities in America — opportunities enhanced in 
 their value by the increased facilities of transportation. 
 Of the latter the Erie canal is the most important single 
 work, but its western connections were proportionately 
 valuable and may be regarded as of importance in the ratio 
 of a part to the whole. During the year 182 1, 42 per cent, 
 of the immigrants entering the United States passed in 
 through New York. Seven years later when the Erie 
 canal had begun to exert an influence on the course of 
 migration the proportion for the various ports shows a 
 marked change." Boston, Baltimore, and Charleston had 
 slightly fallen off. New Orleans, while yet having a small 
 absolute number had increased threefold, Philadelphia 
 had doubled its number and stood second, while New 
 York had increased its numbers almost five times in seven 
 years and received 68 per cent, of the total. 28 In the sub- 
 sequent years, though the total immigration fluctuated 
 much with varying causes checking or increasing emigra- 
 tion from Europe, yet the proportion entering New York 
 continued to hold its own." 
 
 27 Annual Report of the U. S. Superintendent of Immigration, 
 Washington, D. C, 1892, p. 34. 
 
 28 This does not include the scattered immigration entering the 
 lesser ports. 
 
 B The percentage passing into the various ports was as follows : 
 1830 1835 1840 1845 1851. 
 
 New York 58 73 69 67 74 per cent. 
 
 Boston 6 7 6 9 6 " 
 
 Philadelphia 8 4 5 5 5" 
 
 Baltimore 17 8 8 6 2 " 
 
 New Orleans 10 8 12 13 13 "
 
 97 
 
 On further examining the distribution of the immigrants 
 entering New York, it is found that 30 per cent, passed 
 into the group of states served by the Erie canal and its 
 western connections. 80 The various routes aided in the 
 distribution of this continual inflow. Foreign immigrants, 
 unlike interstate movers, do not have their teams and wag- 
 ons for overland travel but must take the means at hand. 
 This is particularly true in the case of European immi- 
 grants coming as laborers without families. 
 
 There is further evidence that this movement of popu- 
 lation took place. The census atlas of 1870 shows a for- 
 eign born population from 1 to 4 persons to the square 
 mile. In parts, as around Ft. Wayne, the number in- 
 creases to 8 and 10, and along the canal route eastward 
 continues the same. Plate XXV further represents graph- 
 ically that the course of settlement by foreigners was along 
 this and other trade routes. 31 Back from this particular 
 canal the density of the foreign born population is consid- 
 erably less, being in fact less than one person to the square 
 mile. Among the immigrants to the Wabash and Maumee 
 valleys, the Irish and Germans predominated; the former 
 came to a large extent as laborers on the canal during the 
 period of construction." From Ft. Wayne to Toledo from 
 8 to 15 per cent, of the total population were Germans. 
 Around Lafayette from 4 to 8 per cent, of the population 
 were Irish. Elsewhere along the route the proportion 
 was less, being for both German and Irish from 1 to 4 
 per cent.* 3 
 
 30 This estimate is from the records for 1855. It is certain that 
 earlier statistics would be more favorable for the purpose of this 
 study, for then the field of distribution was smaller. Ohio, Indiana 
 and Michigan were the main states receiving immigrants in the years 
 from 1820-1840, whereas now the field has broadened to include Ohio, 
 Indiana, Michigan, Illinois, Wisconsin, Minnesota and Iowa. The 
 following year the proportion was 28 per cent. See Annual Report of 
 the Commissioners of Immigration, New York, 1870, p. 146. 
 
 31 Census Atlas, 1870, Plate XXV. 
 
 " Report of Chief Engineer, Doc. Journal, Indiana, 1835, No. 18. 
 33 Census Atlas, 1870, plates.
 
 98 
 
 In perfect accord with the conclusions above are the 
 assertions of numerous early settlers whose presence and 
 business connections with the canal make them compe- 
 tent witnesses. One writes, " Nearly all immigration from 
 the East came in by the canal. It was the thoroughfare 
 to the West." Another, " All the immigrants from the 
 East came in by the canal; the boats would take grain to 
 Toledo and bring immigrants and their goods by the hun- 
 dred." 
 
 The canal's influence in inducing an interstate migra- 
 tion was greater than it was as a carrier of foreigners. 
 The larger part of the population of the region are Amer- 
 ican born. Many came from the southern part of the state 
 attracted by the opening of the northern part. In addi- 
 tion, the north-eastern states and Pennsylvania, southern 
 Ohio, Kentucky, Tennessee, Virginia, Maryland, and the 
 Carolinas, all contributed in large numbers to the popula- 
 tion. 84 
 
 The canal made possible the increase of the population 
 by enabling the settlers to find markets for their surplus 
 products. Where one family could formerly eke out a 
 bare and irregular subsistence by the self-sufficing methods 
 of frontier economic conditions, under the regime of easy 
 communication with markets and the consequent multipli- 
 cation of activities and the subdivision of labor several 
 families now found space for a far better livelihood. With- 
 out the canal the development of the interior portions of 
 the Northwest must have waited the era of railroads. 
 
 Obviously by this rapid increase of a rural population 
 agricultural conditions were vitally affected. It has been 
 asserted that there was no agriculture in the country 
 before the construction of the canal. All evidence shows 
 that it was, at least, conducted on a small scale. Where 
 formerly production was limited to supplying home con- 
 sumption it now began to send its products to eastern 
 
 ** Cox, Recollections of Early Settlements of Wabash Valley.
 
 99 
 
 states. Larger farms took the place of the small clearings. 
 Lands that before were not considered worth cultivation 
 were now cleared, drained, and brought into use. The 
 increased area included in a single farm and the ready 
 sale at the enhanced prices of its products led to the in- 
 troduction of improved machinery.** 
 
 Whereas before it was necessary for the farmer to pro- 
 duce a greater variety of products in order to supply by 
 domestic manufacture his family's wants, it now became 
 possible for him to limit his attention to a less number of 
 products and to make these such as his climatic condi- 
 tions and soil made most profitable. The Indiana farmer 
 now began to regard wheat and corn as his staple pro- 
 ducts. In 1844 there was shipped out of Toledo, coming 
 from the Maumee and Wabash valleys, 5262 bushels of 
 corn. Two years later this out-put increased a hundred- 
 fold and in 5 years more it amounted to 2,775,149 bushels. 36 
 
 Various industries aside from agriculture were promoted 
 to a marked degree. Industrial activities at the beginning 
 of this period sufficed for scarcely more than to supply the 
 settler's own necessities in food and clothing. One of the 
 first plans of the projectors of the canal was to furnish 
 industries with the surplus water power at various points 
 along the route. And immediately after its construction 
 took steps to rent this water power. The result was to en- 
 able numerous private individuals to build mills dependent 
 on the canal for power. Some idea of the variety and 
 extent of this impetus to pioneer manufacturing may be 
 obtained from a statement made by the trustees concerning 
 this phase of the canal's service: 
 
 " This year water power was used by nine flouring mills, 
 eight saw mills, three paper mills, eight carding and full- 
 ing mills, two oil mills, one iron blowery and forge 
 
 85 Based on statements by those participating in this development. 
 
 **That is, 555,250 bushels of corn in 1846 and 2, 775,149 bushels in 
 1851. See James L. Barton, A Brief Sketch of the Commerce of the 
 Lakes, p. 80; Andrews, Report on Colonial and Lake Trade, pp. 
 56 ff.
 
 100 
 
 the improvement of which will tend to develop the re- 
 sources and advance the wealth of this portion of the 
 State. It is in this light, chiefly, that the leasing of water 
 power on any portion of the canal is sanctioned. As a 
 source of direct revenue, it is of but little consequence." 37 
 
 Everywhere the canal, while not always furnishing the 
 sole source of water power, made trade conditions such as 
 to support varied industries. The flouring mills at Lo- 
 gansport, Delphi, Wabash, Lafayette, Huntington, and Ft. 
 Wayne are especially noteworthy in this connection. At 
 Delphi two paper mills were run by water power. Pitts- 
 burg 38 contained grain elevators, foundries, and woolen 
 mills. Every town had its warehouses for grain and pork. 8 ' 
 
 Large warehouses, long since abandoned are not an un- 
 common sight along the old canal bed to this day. Build- 
 ings, once standing on the bank of the canal where now 
 no trace of such a work is to be found, still proclaim by 
 half obliterated signs that here were received imports of 
 teas, coffees and spices, cloth of domestic and foreign 
 manufacture. 40 
 
 By the very cheapness of canal transportation certain 
 industries dependent on bulky raw materials were devel- 
 oped. The canal ran through a heavily forested tract and 
 at once became the highway for handling fire-wood. Sim- 
 ilarly the manufacture and shipping of lumber was begun 
 and maintained for a long time on an enormous scale, 
 while the quarrying of stone and the manufacture of lime 
 became prominent sources of wealth. 41 
 
 Along the north line of the canal a strip of country 
 from fifty to one hundred miles in breadth was tributary to 
 this trade route. On the south the belt extended forty to 
 sixty miles. " Thirty-eight counties in Indiana and nearly 
 
 " Annual Report of Trustees, 1851, p. 144. 
 88 Not even a way station on Wabash railroad to-day. 
 88 Stated on authority of residents of the various localities who were 
 eye-witnesses. Cp. Lafayette Morning Journal, Sept. 10, 1899. 
 10 Notably in Fort Wayne. 
 41 Stated on the authority of numerous early settlers.
 
 101 
 
 nine counties in Illinois including an average area of 22,000 
 square miles " were directly affected by the canal. 42 The 
 farm produce of southern Michigan found its way to the 
 canal at Ft. Wayne over a plank road sixty miles in 
 length.* 3 All northwestern Ohio benefited from the canal. 
 
 At the various centers along the route were erected 
 large store-houses for the reception of the agricultural pro- 
 ducts which were brought to the markets. Grain was 
 bought and handled through the channels, shipped as fast 
 as it accumulated until winter froze the canal over; then 
 the merchants bought and stored in the ware-houses the 
 accumulating purchases of wheat, corn, oats, and pork 
 which were packed during the winter, all to be shipped from 
 the filled up store-houses as soon as navigation opened in 
 the spring. This kept the canal boats busy until well 
 up to the new harvest. From remote counties grain was 
 hauled by wagons to the canal. The farmers of Grant, 
 Madison, and Delaware counties found an outlet for their 
 wheat at Wabash after a long wagon haul. Similarly, the 
 entire northeastern part of the state and even the lower 
 counties in Michigan hauled to Ft. Wayne." Old settlers 
 tell of long trains of wagons waiting by the hour at these 
 rising commercial centers for their turns to unload the 
 products of their farms, bound to the eastern markets. 
 Four hundred wagons unloading in Lafayette during a 
 single day of 1844 were counted by one of the pioneers. 
 Another, speaking of the business at Wabash, says it 
 was a common occurrence to see as many as four or five 
 hundred teams in that place in a single day unloading 
 grain to the canal. 
 
 Many towns that suddenly sprang into existence as 
 promising centers have passed with the canal. Lagro, 
 Lewisburg, Georgetown, Carrolton, Americus, Lockport, 
 
 42 Letter of Jesse L. Williams to Governor Shannon, of Ohio, Jan. 
 30, 1840; H. S. Tanner, Canals and Railroads of the United States, 
 p. 199. 
 
 43 This plank road ran from Fort Wayne to Sturgis, Mich. Cp. F. 
 Fenwick Coleridge in Indianapolis Press, April 8, 1901. 
 
 44 Stated on the authority of early settlers.
 
 102 
 
 and Pittsburg, once towns of great promise with their 
 prosperous warehouses, are almost forgotten relics of its 
 former influence. Save Lagro, all went down with the 
 ruin of the canal. Other cities, more fortunate, grew 
 up with it and with the coming of the railroads have 
 continued to control the traffic of their respective local- 
 ities. Ft. Wayne, Huntington, Wabash, Peru, Logans- 
 port, Delphi, Lafayette, Covington, and Attica are con- 
 spicuous. These, owing their first impetus to the canal, are 
 no less certain monuments of its economic place than are 
 those that exist to-day only in ruins. 
 
 A brief statistical analysis of the business of the canal 
 may serve to illustrate further this economic influence. 
 During the years from 1841 to 1846 which represent the 
 period when the canal was beginning to operate a through 
 traffic, the Lake Erie commerce nearly doubled in vol- 
 ume, 45 and the rapid development in Indiana and Ohio 
 along the canal contributed its quota to this increase. 
 The business of the canal entering Toledo in 1850 is put 
 down by a traveler over this route as 184,400 tons with 
 an increase to 250,000 tons the following year. 46 Agricult- 
 ural products made a large part of the east bound freight. 
 The canal carried into Toledo during 185 1, 1,639,744 bush- 
 els of wheat, 242,677 barrels of flour, and 2,775,149 bushels 
 of corn, 47 while it carried back as one item 88,191 barrels of 
 salt. 48 The freight traffic continued to increase until it 
 reached its maximum in 1856 of 308,667 tons, from which 
 time it gradually declined during a period of nearly 20 
 years. 48 
 
 45 Andrews, Report on Colonial and Lake Trade, 1854, p. 4. 
 48 John Reynolds, Sketches of the Country on the Northern Route, 
 1854, p. in. 
 
 47 Andrews, Report on Colonial and Lake Trade, pp. 56 ff . 
 
 48 For 1853, see Report of Trustees, 1853, P- 328. 
 
 48 Brief summary of canal traffic for years immediately succeeding 
 1854 follows: 
 
 1855 252,152 tons. 
 
 1856 308,667 " 
 
 1857 149,473 " 
 
 1858 200,472 " 
 
 1859 I37,8i9 "
 
 103 
 
 At the same time the shipping on the Erie canal from 
 Canada and the western states increased enormously, show- 
 ing the unmistakable influence of the western canals. In 
 1840 the Erie canal carried 157,801 tons of western pro- 
 ducts out of Buffalo. Eighty-five per cent, of this was 
 from agricultural products and 13 per cent, from the 
 forests. By 1846 this total amount had increased more 
 than threefold, being 506,830 tons. Six years later when 
 the western canal commerce was at its highest, the total 
 western traffic of the Erie canal was 1,151,958 tons. 50 Six- 
 ty-eight per cent, of this or 778,818 tons were agricultural 
 products while 29 per cent, or 336,893 tons came from the 
 forests. 61 
 
 Again, by tracing the interior east-bound commerce of 
 the Erie canal farther inland, it becomes easy to make com- 
 plete the chain of transportation that prevailed in this 
 period. Toledo sent to Buffalo annually 19 per cent, of 
 the flour, 22 per cent, of the wheat and 32 per cent, of the 
 corn which that port received from all western ports." 
 Toledo, in turn, received the greater part of its agricul- 
 tural trade from the Wabash and Erie canal and from the 
 lower part of the Maumee canal which together formed one 
 system. The region which it traversed was regarded at 
 that time as the best grain belt of the Northwest. 83 The re- 
 
 80 During 1852, the western trade of the Erie canal was 70 per cent 
 of its total tonnage to tidewater. 
 
 51 The change in the proportion of these products in 12 years is sig- 
 nificant of the fact that the railroads were beginning to divert from 
 the canal the more valuable products of the farm, leaving bulky 
 forest products for the canal. See Statistics of Erie Canal, pp. 412- 
 413, U. S. Ex. Doc, 2d Sess., 48th Cong., Vol. 20; Poor's Railroad 
 Manual, 1875-6, p. 810. 
 
 "Table showing the chief ports contributing to the trade of the 
 Erie canal, with amount in some leading products for each, during 
 1851: 
 
 Flour in bMs. Wheat in bus. Corn in bus. 
 
 Cleveland 360,059 673,403 458,502 
 
 Toledo 218,219 802,564 1,828,502 
 
 Detroit 270,551 512,758 223,204 
 
 Chicago 53J5I. 315,598 2,351,888 
 
 "Andrews, Report on Colonial and Lake Trade, p. 319.
 
 104 
 
 lation of the Erie canal as an outlet for Toledo commerce 
 is apparent from the statement that of a total export trade 
 from Toledo of 242,677 barrels of flour, 218,219 barrels 
 were shipped to New York by the Erie canal; of 1,639,744 
 bushels of wheat 802,564 bushels went by the same route; 
 and of 2,775,149 bushels of corn 1,828,502 bushels followed 
 the waterway across New York." Thus a direct channel 
 for the products of the Wabash and Maumee valleys was 
 established." While the canals were immensely stimulat- 
 ing the business of the state and encouraging immigration, 
 this very enlargement of the volume of traffic, in turn, 
 called for a more general and rapid system of transporta- 
 tion. As a direct result there grew up a railroad system 
 which ruined the canals. 69 
 
 The Wabash and Erie canal had another competitor. 
 It has been estimated that from 1200 to 1500 flatboats 
 descended the Wabash and White rivers bound for New 
 Orleans in one year before the canal was constructed." 
 The flatboats gave way in time to the river steamboats 
 able to carry loads on both up and down trips." The early 
 policy of the state had been to make this river trade a 
 part of a great trade route from New York to New Or- 
 leans, 08 but the extension of the canal to Evansville elim- 
 
 M This for 1851 ; see Andrews, Report of Colonial and Lake Trade, 
 p. 56. 
 
 66 The rapid development of the Wabash and Maumee valleys is 
 illustrated by the course of Toledo trade : 
 
 Wheat in bus. Flour in bbls. Corn in bus. 
 
 1840 85,000 5I,000 
 
 1841 127,898 45,78l 
 
 1842 Il6,730 37,28o 
 
 1846 810,063 164,689 1,159,315 
 
 I85I 1,639,744 242,677 2,775,149 
 
 00 Annual Report of Trustees, 1867-8, p. 10. 
 
 67 Niles' Register, May 14, 1831, Vol. 40, p. 183 ; Lafayette Free 
 Press, July 3, 1835. 
 
 88 Henry Ellsworth, Valley of the Upper Wabash, p. 5. 
 
 "Senate Doc, 27th Cong., 2nd Sess., No. 112; Ex. Doc, 1st Sess., 
 27th Cong., Vol. 3, No. 155; Senate Doc, 23rd Cong., 1st Sess., No. 
 76; Session Laws, 1824, Act Jan. 31, 1824; ibid., 1832, Ch. CLXXX- 
 VIII, p. 275; ibid., Act of Feb. 1, 1835.
 
 105 
 
 inated the Wabash river as a part of the route entirely. 
 The canal from Terre Haute to Evansville, however, proved 
 a failure, and its place was speedily taken by the Evans- 
 ville and Terre Haute railroad. Above Terre Haute the 
 river trade was gradually diverted to the canal and carried 
 in the opposite direction. In 1836 the cheapest freight 
 route from New York into southern Indiana was by New 
 Orleans and the rivers. 80 The canal boards adjusted their 
 tolls so as to meet the river rates. Large reductions were 
 made and proportionate through-rates were negotiated with 
 the Ohio and Erie canals. These efforts were successful, 
 and by 1847 tne total receipts at Albany had surpassed 
 those received at New Orleans, and gradually this differ- 
 ence increased. 61 This means that the interior states were 
 seeking their outlet to New York instead of New Orleans, 
 and is significant as one step in turning the business inter- 
 ests of Illinois, Indiana, and Ohio toward the North and 
 East. That is, with the turning of commerce from the 
 Wabash river, the last cord binding Indiana economically 
 to the southwest was severed. Like changes were going 
 on in other states of the Northwest; the canals of Ohio and 
 Illinois reversed the direction of their trade. A careful ob- 
 server and competent authority on routes of transportation 
 stated in 1852 that there was at that time no competition 
 with the routes by the lakes and New York. Most of the 
 business of the central and northern portions of Indiana 
 went northeastward to the lakes, and the effect was to seri- 
 ously impair the Philadelphia and Baltimore trade." The 
 state looked to Toledo, Buffalo, and New York rather than 
 
 M It was found that pork could be shipped from Lafayette, Indiana, 
 to New York via the rivers and ocean for $10.00 per ton, whereas the 
 canal rates were $12.00. Similarly, a Boston merchant shipped dupli- 
 cate orders, one by the canals and the other by the ocean and rivers, 
 and reported the cost of the latter at 50 per cent less. The Lafayette 
 Daily Courier, Jan. 19, 1850; Report of Trustees, 1849, p. 260; ibid., 
 1850, p. 144; ibid., 1853, p. 6; Peck, J. M., Guide for Emigrants, Bos- 
 ton, 1836. 
 
 61 Report of Trustees, 1849, p. 261 ; ibid., 1856, p. 286. 
 
 " Letters of Prof. Ed. D. Mansfield, pamphlet, Phil., 1853.
 
 106 
 
 Cincinnati, Pittsburg, Baltimore, and Philadelphia as in the 
 earlier years of the state's history." " The course of 
 trade for productions of that sort is tending more and more 
 to the northeast " wrote another authority." New York 
 owes its predominance as a trade center to this movement 
 which was going on within the Northwest. 
 
 A similar revolution took place within the individual 
 states of this group, making them face to the north rather 
 than the south in industrial structure as well as in business 
 interests. In 1830 five-sixths of the population of Indiana 
 was in the southern portion along the Ohio valley and on 
 the lower Wabash. By 1840 the frontier had been pushed 
 northward all along the line and particularly up the Wa- 
 bash valley. Ten years later shows a more equal distribu- 
 tion of population over the state, so that the density in the 
 region fed by the canal is about as much as the older 
 south portions. The map of i860 shows a population on 
 the Wabash of 45-90 per square mile while along the 
 Ohio it is but 18-45. This movement in the density of the 
 population to the north is graphically shown in the census 
 atlas of 1870." 
 
 At the outset Virginia and Kentucky immigrants entered 
 the state from the south, and settled along the southern 
 valleys, regarding the northern portion of the state as a 
 sort of " terminating point of habitancy." ' But with 
 
 83 Curiously enough Cincinnati continued to send merchandise into 
 the Wabash valley by the quite indirect route of the Miami canal and 
 from that into the Wabash canal at the junction. Estimating from 
 the tolls paid to the canal in 1851, 69 per cent of the west-bound 
 freight came from Toledo, 19 per cent from Cincinnati and 11 per 
 cent from local trade; for 1852 these proportions are 77, 15, and 8 
 per cent, respectively; for 1853 they continue to show a decrease 
 of the Cincinnati imports, being 83, 11, and 6 per cent. Reports of 
 Engineer, 1851, p. 368; 1853, p. 830. 
 
 "Andrews, Report on Colonial and Lake Trade, p. 146; Cp. 
 James L. Barton, A Brief Sketch of the Commerce of the Lakes, 
 p. 80. 
 
 65 Statistical Atlas U. S. Census, 1870, plates XVI and XVI (a). 
 
 "Timothy Flint, History and Geography of Mississippi Valley, 
 Cincinnati, 1833; Geo. W. Ogden, Letters from the West, pp. 64-5, 
 New Bedford, 1823; Steele's Western Guide Book and Emigrants' 
 Directory, pp. 68-69. Cp. Census Atlas, 1890, plates 25-30.
 
 107 
 
 the opening of the north of the state to settlement by In- 
 dian treaties and under the encouragement offered to agri- 
 culture by the facilities for exportation to the eastern mar- 
 kets, the population had increased so rapidly as to change 
 the character of the state quite radically. With a popula- 
 tion to a large extent from the northeast and with markets 
 in that direction, the business and political interests be- 
 came closely knit with those of the North and East. 
 
 Of more than usual political significance were several 
 attempts to secure a southeastern outlet for the states 
 north of the Ohio river. The Chesapeake and Ohio canal 
 was the eastern section of such work. Never completed 
 beyond Cumberland, Maryland, it failed materially to af- 
 fect the states of the Northwest. Its early extension 
 westward as planned, pushing across the mountains by a 
 railroad and connecting with the Ohio river, as the Bal- 
 timore and Ohio railroad did later, might possibly have 
 retained for Virginia the advantage with which it started." 
 Another plan of less promise was a Cincinnati-Charleston 
 railroad. Citizens of both cities strongly supported the pro- 
 ject, and the governors of three states gave it their formal 
 approval.™ It was advocated as the shortest and most 
 direct route to the seaboard."" The James river canal was 
 also regarded by its projectors as a possible competitor 
 with the Erie canal for western trade, but like the Ches- 
 apeake and Ohio it lacked the connections at the western 
 terminus which the Great Lakes gave to the Erie canal. 
 Such projects have their political significance. Had they 
 been successfully carried out, pouring settlers into the 
 
 " North American Review, Vol. 24, p. 1 ; Ward, Chesapeake and 
 Ohio Canal Project, Johns Hopkins University Studies, Seventeenth 
 Series. 
 
 "" Lafayette Free Press, Dec. 18, 1835 ; Message of Governor Noble, 
 Indiana, Dec. 1835 ; Governor Swain, of South Carolina, Message, 
 Dec, 1835. 
 
 " This movement culminated in 1869 as the Cincinnati Southern 
 Railway, a municipal enterprise of Cincinnati. Dr. J. H. Hollander, 
 The Cincinnati Southern Railway, Johns Hopkins University Studies, 
 Twelfth Series.
 
 108 
 
 Northwest from the southeastern states, men bound by 
 business interests and political and social habits to the 
 South, the course of history in Indiana and Illinois partic- 
 ularly must have been quite different. 70 To make clear the 
 meaning of this statement it is necessary to recall the 
 severe struggle between the pro-slavery and anti-slavery 
 factions immediately preceding the admission of Indiana. 71 
 With a strong slavery party already on the ground, such 
 an economic connection as was contemplated in the south- 
 eastern routes must have done much to revive the earlier 
 issue, and if not to make slavery an issue for Indiana itself, 
 to have made it, at least, a " border state." 
 
 This speculation would be barren were it not for the 
 emphasis which it throws on the influence of the canal as 
 a strong political and economic factor in commonwealth 
 building. In this respect the place of the Wabash and 
 Erie canal in western history was to induce immigration 
 from the northern states and Europe into its territory and 
 give it the sectional population characteristic of other parts 
 of the Northwest. 
 
 The Ohio river and the National road were important 
 routes for southern and central Indiana. Short lines of 
 railroad like the Madison and Indianapolis and the Evans- 
 ville and Terre Haute were also early built to supplement 
 them. The Ohio river drew off most of the trade of south- 
 ern Indiana outside of the Wabash valley, only to let it be 
 diverted away, in large part, to the Ohio canals at Cincin- 
 nati and Portsmouth; though as the railroad became 
 established across Pennsylvania there was a growing tend- 
 ency to ship by the Ohio river as far as Pittsburg. The 
 National road penetrated the state from near the middle of 
 its eastern boundary and running through Indianapolis 
 
 70 As another illustration of the manner in which a single line of 
 transportation can shift the business of a section, compare the re- 
 cent developments of the Chesapeake and Ohio railroad traffic to 
 Newport News, Virginia. 
 
 71 For a discussion of slavery in Indiana, see Dunn, " Indiana : A 
 Redemption from Slavery."
 
 109 
 
 crossed the state. Its greatest service was in facilitating 
 the overland travel of immigrants, serving as a great mail 
 route, and as a great highway for local purposes. The 
 other routes furnished so much cheaper cost for long 
 distance hauls that the road could not be regarded as a 
 competitor." 
 
 For a new country to find markets for its surplus pro- 
 ducts means to improve very greatly conditions of living. 
 Such an event makes possible thrift, progress, and a degree 
 of culture as opposed to indolence, stagnation, and rude 
 frontier civilization. Every pound of lard that the canal 
 carried away brought back increased comforts and luxuries 
 from the east for the settlers. Viewed in this light, a line 
 of transportation becomes a civilizing agent of inestimable 
 value to a community. 
 
 In common with all lines of transportation, the Wabash 
 and Erie canal contributed its part toward the equalization 
 of prices. At Vincennes and Cincinnati during the earli- 
 est years of western occupation, 1816 to 1820, wheat sold 
 for 37 cents and corn for 10 cents per bushel, while im- 
 ported articles were proportionately dear, coffee being 
 rated at 37^2 to 50 cents per pound, sugar 25 to 37^ 
 cents per pound, iron at 16 cents, and salt at $10.00 per 
 barrel." And as late as 1840 the farmers of Delphi, Indi- 
 ana were hauling their wheat to Michigan City and sell- 
 ing it for 45 cents a bushel and paying 9 dollars for a 
 barrel of salt, but in less than two years, when the canal 
 had reached that place, the same farmers obtained 1 dollar 
 a bushel for their wheat and bought salt for less than 4 
 dollars a barrel. 74 Illustrations might readily be multi- 
 plied. 
 
 "Letters of Prof. E. D. Mansfield, pp. 9-10; A Summer Journey- 
 in the West, pp. 78-84; The Central Water Line, Richmond, 1868; 
 Timothy Pitkin, A Statistical View of the Commerce of the United 
 States, p. 534. 
 
 T ' David Thomas, Travel through the Western Country, Auburn, 
 N. Y., 1819; The Central Water Line, Richmond, Va., 1868. 
 
 74 Stated on the authority of old settlers who lived near Delphi 
 at the time.
 
 110 
 
 A canal to-day could scarcely be regarded as a socializ- 
 ing force, yet this is one of the services legitimately attri- 
 buted to that institution. The boats used on the canal 
 were owned entirely by private parties, paying toll for the 
 privilege of using it. Such companies operated daily 
 lines of packet and passenger boats. These packets, judged 
 by our standards, were small and without any equipment 
 for the comfort of the passengers. 75 Yet, in those days 
 they talked of the superior accommodations upon their 
 splendid lines of boats. " The boats are new, fitted up with 
 great neatness and taste, fare low and commanded by the 
 cleverest fellows in the world. What more could a fasti- 
 dious public require? It is well worth while to make a trip 
 to Cincinnati or Toledo just to enjoy the luxury of a pas- 
 sage in these boats." So ran the contemporary accounts of 
 canal travel. 70 Travelers usually provided themselves with 
 books and tobacco. 77 At stopping points they got off and 
 walked on until overtaken. The packet boats ran at the 
 rate of eight miles an hour. In 1844 the trip from Toledo 
 to Lafayette, about 242 miles, was scheduled for 56 hours. 78 
 Such leisurely traveling was so much swifter and more 
 comfortable than the slow going wagons over the rough 
 roads, which was most often the alternative offered to the 
 traveler, that he became jubilant in his descriptions of the 
 canal packet.™ The arrival of a passenger boat in a town 
 was an occasion of great excitement. Everybody who 
 could went to meet the boat. Its passengers were the 
 news bearers. The villagers eagerly inquired the news or 
 chatted sociably with them. 80 
 
 75 J. R. Beste, The Wabash, Vol. II, pp. 191-221 ; Knapp, History 
 of the Maumee Valley, pp. 345-6. 
 
 76 Fort Wayne Times and People's Press, Aug. 30, 1845. 
 
 77 J. R. Beste, The Wabash, Vol. II, pp. 191-221. This is a 
 graphic and entertaining account of a journey of an English gen- 
 tleman's family from Terre Haute to Toledo, and forms one of the 
 best contemporary descriptions of packet boats and canal travel. 
 
 78 Fort Wayne Times and Press, Oct. 21, 1847. 
 
 79 Knapp, History of the Maumee Valley, p. 345 ; Valley of the 
 Upper Maumee, Vol. II, p. 18. 
 
 w A comparison between canal passenger fares and modern rail- 
 road rates shows a close similarity. The advertised fare from
 
 Ill 
 
 Equally has the Wabash trade route promoted the econ- 
 omic development of the Northwest, affected the political 
 life of the people, improved their social conditions, so- 
 cializing the communities through which it ran, and as- 
 sisted in the nationalization of the regions it penetrated. 
 The cosmopolitan character of the population, brought in 
 because of the opportunities made possible by the canal, 
 destroyed the natural tendency to provincialism and 
 enabled the inhabitants to realize the ties which bound 
 them to the other commonwealths of the union; that in- 
 terstate canals, railroads and natural waterways played no 
 small part in creating the American nation instead of an 
 American league is now almost a truism. 
 
 For a period from 1843 to I 856, the canal was recog- 
 nized as a part of the great national military highway 
 between New York and New Orleans. 81 Its completion 
 was the realization of a greatly cherished military plan to 
 connect by water the Gulf of Mexico and the Gulf of St. 
 Lawrence and by the Erie canal to join the former to the 
 Atlantic ocean. 82 In its slightly narrower sphere, though no 
 less important when the smaller scale of all affairs in the 
 earlier period be considered, this waterway must take a 
 place as exerting an influence not dissimilar to that of 
 the Pacific railroad. Both alike promoted the development 
 of a large territory and both strengthened the national 
 spirit. 
 
 In conclusion it may be said that the influence of the 
 Wabash trade route does not end with the fall of the canal. 
 The Wabash railroad is its economic successor and con- 
 tinues to exert a similar influence. More recently steps 
 have been taken to construct an electric railroad along 
 the old tow-path, and at present writing there is a good 
 
 Fort Wayne to Toledo, about 104 miles, was $3.25 ; from Fort 
 Wayne to Lafayette, 138 miles, the fare was $3.75; from Fort 
 Wayne to Cincinnati, 221 miles, it was $6.75. See Fort Wayne 
 Times and People's Press, Oct. 21, 1847. 
 
 81 Ex. Doc, 1 Sess., 28 Cong., Vol. IV, No. 134. 
 
 82 Henry Ellsworth, Valley of the Upper Wabash.
 
 112 
 
 prospect for the early completion of such a road from 
 Toledo to Lafayette. A small portion is already in oper- 
 ation. The great Wabash system and the demand for 
 further facilities as represented by this electric road are an 
 additional justification for the construction of the Wabash 
 and Erie canal, if such a justification were necessary.
 
 \M
 
 PAMPHLET BINDER 
 
 Syracuse, N. Y. 
 Stockton, Calif.
 
 UNIVERSITY OF ILLINOIS-URBANA 
 
 386.48B44W 
 
 C001 
 
 THE WABASH TRADE ROUTE IN THE OEVELOPMEN 
 
 3 0112 025309649