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Where the Indiana Canal would have been built

The Indiana Canal Company was a business started in 1805. Its main goal was to build a canal around the Falls of the Ohio on the Indiana side of the Ohio River. After several tries, and possibly some tricks by people who supported a rival canal, the project was stopped.

Why a Canal Was Needed

As more American settlers moved into the Midwest, they started farming. They would send their crops down the Ohio River to the Mississippi River and then to New Orleans to sell them. On this long journey, there was one big problem: the Falls of the Ohio. These were a series of fast-moving rapids between Clarksville, Indiana, and Louisville, Kentucky.

At the falls, boats had to be unloaded. The goods were then carried over land for about three-mile (4.8 km) and reloaded onto other boats below the rapids. This caused big delays and cost a lot of money. For example, goods from Cincinnati alone faced extra costs of over $50,000 each year!

People started suggesting a canal around the falls as early as 1790. This would let ships easily pass the rapids. Both Indiana and Kentucky wanted to build the canal first. They knew that whichever side built it would get a huge boost to its economy. Early supporters like Josiah Stephens and Benjamin Hovey believed a canal would bring lots of wealth to Indiana.

The First Company

Indiana started making official plans for a canal before Kentucky did. The first Indiana Canal Company was approved on August 24, 1805. The company's rules seemed fair, setting fees for using the canal between two and five dollars.

Many of the company's leaders were from Clarksville. Famous people like Aaron Burr, Davis Floyd, and George Rogers Clark were on the board. The Indiana Territory gave the company $120,000 to start. The company also raised more than $1.2 million from private investors.

The company planned a route around the falls. It would go through a deep, downhill valley that started near the Cane Run creek. The idea was to build a dam near the creek's mouth at the Ohio River. This would force the creek's water into the valley, washing it out and creating a natural canal. This new canal would then connect to the Ohio River using a lock. Surveyors thought this path would be much easier and cheaper than digging on the other side of the river.

However, this first company failed before construction even began. It completely fell apart after the Aaron Burr plot became known. Floyd was briefly put in jail for his part, and Burr was accused of treason. Many thought the company was just a way to gather money for Burr's failed plan. But it was never proven that any money was misused, and the treason charges against Burr were dropped.

Second and Third Companies

In 1817, Indiana tried again, creating a second canal company called the Ohio Canal Company. Governor Jonathan Jennings wanted to make Indiana's economy stronger. He saw the canal as a quick way to do this. This time, the company's rules provided $1 million in starting funds. The board members were chosen from more parts of Indiana to prevent any possible cheating by local members. The company also didn't have to pay taxes and could buy private land if needed for the project.

Still, the company couldn't get enough investments. So, in 1818, a third company, the Jeffersonville Ohio Canal Company, was created. This new company had even more power. It could set its own tolls and raise up to $100,000 through a lottery.

By 1819, the company had made enough progress to start building. The Cane Run creek was dammed and directed into the valley, just as the first company had planned. The canal was expected to be about 2.75 miles (4.43 km) long. It would be about 45 feet (14 m) deep and would narrow from 100 feet (30 m) wide at the top to 500 feet (150 m) wide at the bottom.

Work was going well until the dam broke. Some people, like Maurice Thompson, believed that someone from the rival canal company in Louisville had sabotaged the dam. Newspapers in Portland (a town near Louisville) had been criticizing the Indiana canal. Many Portland residents were against any canal being built. They knew that if boats could pass the falls easily, Portland's businesses, which relied on moving goods overland, would no longer be needed. It's also possible that small animals like muskrats, known for digging tunnels, damaged the earthen dam.

After the dam failed, a financial crisis called the Panic of 1819 made it very hard to raise more money. Without funds to continue building, the company had to close down.

What Happened Next

Without money to fix the dam and restart construction, the project was left unfinished. The Indiana General Assembly (Indiana's government) talked about the canal again in 1824. They formed a group, including Christopher Harrison, to study if the project could be restarted. After their report, the group was disbanded. The General Assembly discussed restarting the company, but no more action was taken to build a canal on the Indiana side of the river.

The debate finally ended in 1825. That's when the Louisville and Portland Canal in Kentucky received money from the federal government. This funding almost guaranteed its success. The Louisville canal was finished in 1831 and quickly became very profitable. It was still in use in 2008 as part of the McAlpine Locks and Dam.

The failure of the Indiana canal was a big setback for Clarksville. Local businesses had grown, expecting Clarksville to become a major trading center. The state had focused on improving the area for the canal, and now many of those plans were ruined. For example, the state prison had been built in Jeffersonville so prisoners could work on the canal. Other helpful projects had also been given to the area to support the canal.

The loss left Clarksville struggling, and its population declined. Meanwhile, Jeffersonville began to grow quickly. Seeing how successful the Louisville and Portland Canal was, Indiana decided to build other canals across the northern part of the state, including the Wabash and Erie Canal.

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