Canals and the Mammoth Internal Improvement Act of 1836

27 January 1836. The state of Indiana was eleven months shy of celebrating 20 years of statehood. On that day, Governor Noah Noble signed what was to turn out to be one of the biggest disasters in state history: the “Mammoth Internal Improvement Bill.”

But this law didn’t come out of the blue. It actually had its roots following the War of 1812. Transportation throughout the United States needed improvement. Major improvement. Due to the expenditures, the federal debt over twenty years after the war amounted to $225 Million,

In Indiana, the history of the canal system started with an act of Congress approved on 2 March 1827. That act granted money to the states of Ohio and Indiana to build a canal to connect the Maumee River to the Wabash River. There were many political fights and alternatives recommended. So many, in fact, that it took until 3 October 1829 for an agreement between Ohio and Indiana to build the sections of the canal in their respective states. Work finally started in Indiana on 22 February 1832 on what would become the 459 mile long Wabash and Erie Canal. This canal would connect Toledo, Fort Wayne, Peru, Delphi, Logansport, Lafayette and Terre Haute. When completed, it was actually possible to travel by water from New York to points inland, and even to New Orleans, without going around Florida.

In an effort to further improve transportation to the center of the state, the subject law was passed. The Mammoth Internal Improvements Act allowed the state of Indiana to issue bonds up to $13 million at 5 percent. While $13 million is a lot of money today, it made up one sixth of the entire wealth of the state of Indiana at the time. This was a massive undertaking.

The law provided for several projects: canals, roads and railroads. At the time, the most “wow” projects were canals. While relatively expensive, canals could move more freight faster than other types of projects. For instance, it was reported that the Wabash and Erie Canal could move freight at 8 miles per hour. That’s lightning fast at that time.

And canals would be the major focus of the bill, much to the chagrin of Governor Ray of Indiana. He preferred railroads. At the time of passage, two canals were completed in Indiana: the Wabash and Erie and the Whitewater. Canal projects included in this law would connect these two canals. The Fort Wayne & Lake Michigan Canal was planned to connect Fort Wayne with Michigan City on Lake Michigan. A Whitewater extension was planned to connect Cambridge City, on the Whitewater Canal to a point in western Madison County west of Anderson. There it would connect to the Central Canal, connecting the W&E at Peru to near Marion, west of Anderson, Noblesville, Indianapolis, Martinsville, and Spencer. It would then connect back to the W&E near Bloomfield in Greene County.

The Central Canal started building in several places. One section near Anderson, the section from Broad Ripple to downtown Indianapolis, and one section through souther Marion County to the Bluffs of the White River at Waverly. Only the Indianapolis section was opened. It ended up being used for water power for mills and factories. Eventually, it came under the ownership of the Indianapolis Waterworks, later the Indianapolis Water Company.

The Wabash and Erie Canal ended up being quite the success…for about two decades. It then started falling into disuse. With not using the canal, it fell into disrepair. With neglect, and outright sabotage, most of the canal path today is gone.

And in the end, the Mammoth Internal Improvements Act ended up putting the state of Indiana almost into bankruptcy. The credit of the state was ruined. It also led to Article 10, Section 5 of a new Constitution adopted in 1851. That section states “no law shall authorize any debt to be contracted, on behalf of the State, except in the following cases: to meet casual deficits in the revenue; to pay the interest on the State debt; to repel invasion, suppress insurrection, or, if hostilities be threatened, provide for the public defense.” This, later, would affect the original State Highway Commission law enacted in 1917.