The building of the Erie Canal was one of the transforming events of the nineteenth century in the United States. It was certainly the most important American public-works project of the century. The transcontinental railroads were also built with significant governmental assistance. But the Erie Canal was owned and operated by the state. The fact that the canal was built, when it was built, by the state government of New York left a lasting mark on the nation’s economic development. New Yorkers remembered government intervention in the economy, sectional politics, social attitudes, and cultural values. Many of these changes were the very ones hoped for by the canal’s progenitors. But the effects of the canal exceeded all expectations.
America’s economy was as weak as its transportation links to Europe. Only with the first stirrings of industrial development in the cotton mills of New England in the 1820s, as well as the revolution in the young nation’s transportation system, which connected the Atlantic coast with the hinterlands through the development of canals, could a mass migration from Europe to America take place. Indeed, it was the 1825 completion of the Erie Canal, linking New York with the Great Lakes and the Midwest, that helped make America the most coveted overseas destination for Europeans (Sheriff 123).
In New York State, it was the canal’s physical presence that was easiest to understand. The Erie Canal was, in essence, a trench forty feet wide, four feet deep, and 363 miles long. The engineers in charge of work had limited experience, and their need for more trained help was one of the motives that led to the founding of Rensselaer Polytechnic Institute in 1824, the nation’s first school dedicated to civil engineering (Sheriff 36). In The Artificial River: The Erie Canal and the Paradox of Progress, Sheriff writes about the work of the laborers who built the canal. Many of those people were recent immigrants without qualification. At the end of canal completion, sponsors celebrated with toasts and speeches praising each other but forgot the real builders. The laborers were not part of their republican vision; “they tried to convince themselves, and others, that the class of degraded workers they had come to scorn was a necessary – but temporary – evil” (Sheriff 50).
No individual reaped greater immediate benefits from the canal than DeWitt Clinton, although the question of who could claim paternity for the canal was a heated one in his day. The popularity of the canal helped return Clinton to the governor’s office in 1824. Beyond the realm of personalities, the Erie Canal was reshaping the political landscape and the common conception of the proper role of government. In fact, it did so twice. The first time, beginning with its clear success in the early I820s, its example greatly increased support for government -backed improvements at the state level, and not just in New York. The second was when many of the projects inspired by the success of the Erie Canal met with failure and led some states into insolvency following the Panic of 1837.
New York, said Clinton, must build additional canals and establish a mechanism by which government could continue to lay open arteries of commerce and multiply markets. To achieve this, he would begin by uniting “the waters of the Seneca, Cayuga and Canandaigua lakes, and … secondary lakes … with the Erie Canal.” These tasks made clear “the expediency of constituting a board with general powers in relation to internal improvements.” (Lincoln 3:54).
The canal boom led all to expect a better, more prosperous life, but some were disappointed. New Yorkers left out of the original scheme wanted in on the canal bonanza or to be granted transportation projects that would benefit them. Residents of the southern tier petitioned for a road from the Hudson to Lake Erie running through their lands. Turned down by the legislature in 1827, they soon were back seeking state support for a railroad. Other districts wanted canals to link them with the Erie. By the time some of these projects were finished—for example, the Black River Canal, completed in I850—railroads had begun to replace canals as the main artery of commerce, and the expense of the newer projects was often never recouped.
The Erie Canal had to help give birth to a national market. The availability of staple crops from inland would have allowed specialization of agriculture in other areas, and the growth of a cash economy facilitated exchange among individuals in different trades, as well as between different regions. The government believed that it would foster economic growth along its route, in the states of the Old Northwest, and in New York City. Reduced freight rates on the Erie Canal could enable the farmers of the Genesee and the Great Lakes plain to sell in the State’s chief urban markets, and eastern capital was drawn from agriculture to industry by the western demand for manufactured goods. The canal added its own demand for industrial products, especially boats and rope. Traditional economic relations dissolved in the Erie’s waters, and those left adrift sought new islands of stability. For women, the separation of the home from the workplace and the decline of household manufactures necessitated new arrangements and new concepts of the “woman’s sphere.” The conjunction of revivalism and reform made the region home to various perfectionist movements and to rising abolitionist sentiment.
The New Yorkers had been told that their plan would have a better chance if it was linked to a national program of improvements, but efforts in that direction were scuttled both by jealousy of New York and by the threat of approaching war, which provided an easy excuse for inaction. The same arguments that helped win friends for the canal within New York—that it would greatly stimulate the growth of the state and of the City of New York—created opposition elsewhere. New York State was already leaving its competition behind.
When New Yorkers enjoyed both freedom and harmony, their community proved capable of great creative energy that could feed on itself. In the canals, New Yorkers promised to redeem themselves, perfect themselves. The canals promised to generate enough income not only to meet New York’s fiscal needs but to realize a vast fund, applicable to all the objects of human improvement. Money, abundant money, would enable the state to foster the moral and social order on which the republic must rest.
The Erie Canal could open the New York for development. Before, it was prohibitively expensive to produce crops there for sale in coastal cities or for export. The cost of transporting wheat from Buffalo to New York City, for example, was three times the value of the wheat at New York City. But, with the canal, the coastal cities and Europe could be supplied. Accordingly, the canal could give New York City an advantage in its competition with Boston, Philadelphia, Baltimore, and other port cities as the commercial and financial center of the new country.
The Erie Canal was intended to help push settlement west to Buffalo and beyond. It would foster economic growth along its route, in the states of the Old Northwest, and in New York City. If New York City was the center of the market for products traveling along the canal, cities like Rochester, Buffalo, and Cleveland, which grew explosively because of the canal boom, soon became major markets in themselves. Access to markets meant more to farmers than just an outlet for their surpluses. With New York City merchants offering cash for wheat, western farmers had a reason to increase the amount of land they worked, so that they quickly converted from subsistence farming to cash crops. The conversion to cash crops also would solve a traditional problem of frontier life—a shortage of cash. With cash, farmers could more easily purchase the supplies, as well as the luxuries, that were produced in canal towns or shipped west from New York City. The greater demand for shoes, furniture, printed matter, and other manufactures of eastern cities could lead to greater investment in productive capacity in New York, fueling the growth of the city and thereby insuring an expanding market for western commodities.
What had seemed like a terrible risk turned into a tremendous bonanza by 1825, as revenues from the Erie Canal poured into the New York State treasury, financing an extensive network of additional canals and relieving other tax burdens (Sheriff 96). It helped secure for New York City the preeminent position in the national economy it retains to this day. It hastened the development of a truly national market, and directly contributed to the growth of capital markets in the United States. That others conceived the canal and nurtured it in its early years as a private project, and that thousands of people worked to bring it to completion are all fair points. But it was Clinton who revived the canal when it seemed dead, pushed it forward when federal aid was denied, and championed it in public and private forums until it was completed.
Lincoln, Messages, 3:54
Sheriff, Carol. The Artificial River: The Erie Canal and the Paradox of Progress, New York: Hill & Wang, 1996.