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.

Indiana Highway Laws, 1917 and 1919

When talking about the state highway system of Indiana, there is some confusion about exactly when it was created. There was an initial law in March 1917 that created the Indiana State Highway Commission. This law, containing 31 acts, was very explicit about what the ISHC was, how it was to be organized, and the provisions on how to do its job. And it never really got a chance to work, because, according to newspapers of the time, “under which practically nothing was accomplished because of litigation affecting its constitutionality.”

Part of the potential problems with the constitutionality of the law stems from the fact that the current (not only then, but now) Indiana Constitution was the second such document in the state. The first was written with Indiana statehood in 1816. The second, of 1851, was written, in part, due to the spectacular failure of Indiana transportation projects of the Mammoth Improvement Bill of 1836. It was the debt, and subsequent pending filing of bankruptcy, that was a big factor in the creation of the new constitution.

But the Indiana legislature was not done trying to create a state highway system (and being able to partake in federal aid road money). Two laws were passed in 1919: 1) the state highway commission law, and 2) the county unit road law. Both of these laws were written to help with the then current patchwork of roads in Indiana.

Until 1919, maintenance and control of Indiana roads were handled by three different government authorities: a town or city, one of 92 counties or one of 1,016 governmental townships. (See yesterday’s ITH blog for description of townships.) Originally, townships would improve then maintain roads in their jurisdiction. At some point, with improvement done, the county would take over the maintenance of some of these roads. There was also at the time, as mentioned yesterday, a three mile law, making the county, when properly petitioned, improve and maintain roads while passing the charges to the residents of the township which contained the project.

The County Unit Road Law was, at the time, “something new in road legislation.” The first thing it did was abolish all township control over roads. All roads, at that point, came under the responsibility of the county commissioners. It also allowed the issuing of bonds for the construction of all county roads. It also stated that any road money that the township had not used was to be turned over to the county. The bond restrictions were also listed: not less than $50, terms not less than 10 nor more than 20 years, not more than 5% interest, interest to be payable on 15 May and 15 November, bonds are tax exempt, and shall not sell for less than their face value.

The State Highway Commission law, known as House Enrolled Act #83 (HEA 83), was far more ambitious. HEA 83 provided “for cooperation with the federal government in the construction of rural post roads, repeals the state highway commission law of 1917, and all other laws in conflict.” HEA 83 was approved on 10 March 1919, and became effective that day.

Instead of using bonds to construct and maintain a state highway system, funding was to come from the following sources: inheritance tax receipts, motor vehicle license fees, proceeds of a 10 cent levy on each $100 of property value, and a 50-50 plan of federal aid. Both laws included that the approval of plans and specifications of county road and bridge projects be handled by the State Highway Commission. Materials used in these projects must also be approved by the state commission.

The most important section of HEA 83 was section 12. It states that ISHC commissioners “shall, at the earliest possible moment, proceed to lay out a system of state highways, which shall reach each and every county seat of the state and each and every town of over 5,000 inhabitants.” It also stated that “all roads designated under the old state highway commission law as ‘main market highways’ shall be ‘state highways.'” Those old roads (there were five of them) “shall be improved and maintained as state highways the same as it they had been designated by the new highway commission.”

Another provision in this section was that the commission was to have laid out a system of roads connecting all county seats in the state by 1 April 1920, and to have been approved by the governor by that date. Work on the ISHC projects “may be done by contract or in any other manner deemed by the state highway commission most efficient and economical to the state.” Bridges with a span more than 20 feet are to be contracted separately from the road project leading to and from that bridge.

Two more important sections of HEA 83 are sections 24 and 25. Section 24 gives the ISHC the right of eminent domain. Section 25 concerns the elimination of railroad at grade crossings. “If the commission and a railroad can not agree, the commission may petition the public service commission to settle the matter.” The costs of such a grade separation shall be split 50-50 between the ISHC and the railroad in question.

There are a lot more provisions of this law. I will probably cover more of them at a later date.

Major source for this post: Noblesville Ledger, 05 April 1919, pp6. Source courtesy of