Louisville and Portland Canal
Encyclopedia
The Louisville and Portland Canal was a 2 miles (3.2 km) canal bypassing the Falls of the Ohio
in the Ohio River
near Louisville, Kentucky
. It opened in 1830, and was operated by the Louisville and Portland Canal Company until 1874, and became the McAlpine Locks and Dam
in 1962 after heavy modernization.
Although initially a private company, construction of the canal required heavy investment from the federal government, which gradually came to own the canal through an unusual buyout plan. The canal represented the first major improvement to be successfully completed on a
major river of the United States.
The Falls of the Ohio are the only natural obstruction in the Ohio River. Both Louisville and other early towns later absorbed by Louisville, Portland
and Shippingport
, were founded before a canal was available. These towns based much of their early growth on portage
from ships traveling down the river, which were unable to navigate the falls fully loaded except for a few weeks in spring when water was very high. Although this source of income was popular with locals, shippers and boatmen disliked the expense and hassle. The situation caused wide fluctuations in price for farmers upstream and merchants in the river's eventual destination, New Orleans
, as there was a glut of shipments during the few weeks of high water each year.
in 1783 for a land grant at the falls, with a promise to start a canal company. They declined. As early as 1805 there were serious plans for a canal to bypass the falls, with rival sides supporting a canal either on the Kentucky (south) or Indiana
(north) side of the river. Proponents of an Indiana-side canal included Cincinnati
businessmen, who feared economic competition from Louisville. Both Kentucky and Indiana chartered canal companies in 1805, although nothing came of either effort. Indiana chartered a second company
in 1818, which made preliminary excavations, work was halted after the possible sabotage of a dam, and all efforts were halted by the Panic of 1819
.
In 1808 Secretary of the Treasury Albert Gallatin
suggested federal backing of a Kentucky-side canal. The United States Senate
passed bills to this effect in 1810 and 1811, but both died in the House
. Although little materialized politically, the subject of the canal and federal funding for it was widely debated in Kentucky, Indiana, Ohio
, and Washington, D.C.
in the 1820s.
The Louisville and Portland Canal Company was chartered as a private company in 1825 by the Kentucky Legislature, after it had proven impossible for the body to approve a state-funded project. The bill was introduced by Charles Mynn Thruston
of Louisville. The charter established an initial toll of 20 cents per ton. There no limits on the amount of time the company would be allowed to operate the canal. $350,000 was raised from the initial sale of stock in March 1826, and $150,000 soon after. Much of this capital came from Philadelphia
investors. This private, out of state ownership was praised at the time by Louisville's leading newspaper, the Public Advertiser
, which said "no one is now apprehensive of any imprudent or unjust action on the part of the Legislature".
In 1824, it was estimated that the canal could be completed in a year for $300,000. As it became evident the canal would have to be dug through solid rock, the cost rose past $375,000 with two years of construction required, and some local investors, who were first to learn of the difficulties, defaulted on their investments. In May 1826 the United States Congress
voted to invest about $100,000 to shore up the company and make it a mixed corporation, but financial difficulties continued as the course of the canal had to be changed, and Congress invested an additional $133,500 in 1829.
The company was still due to run out of funds by the end of 1829, and a third influx of funds from Congress was vetoed by Andrew Jackson
, who denounced the practice of giving federal funds to private corporations which would be able to profit from the infrastructure the government partially financed. This ended federal stock purchases related to the canal. Thus, the company was forced to borrow $154,000 in 1830, and the partially completed canal was opened in December of that year. The first steamboat to pass through was the Uncas. By this time, the stock was valued at over $1,000,000 of which the federal government held $290,000.
An interesting anecdote is that Abraham Lincoln is said to have worked on the construction of the canal in 1827.
The canal's dimensions, 50 feet (15.2 m) wide, other than overall length, were huge in comparison with projects like the Erie Canal
, in order to accommodate the growing boats that carried goods on the western rivers of the United States. Nevertheless, the canal became practically obsolete soon after opening as steamboat
technology evolved. This, combined with rapid increase of tolls, decreased the economic impact of the canal. Although the canal decreased the freight rate along the river, it did not appear to significantly lower the prices of commodities, which fell at a faster rate in the 25 years before the canal opened than they did in the 25 years afterwards.
Business was slow for the company until the canal was completed in 1833. The initial toll of 20 cents per ton proved insufficient, and the company had to increase it to 40 cents in 1834 and 60 cents in 1837. By 1834 the canal carried 1,585 boats and 170,000 tons. An economic boom in the late 1830s brought profits to the shareholders, as the canal moved over 300,000 tons of traffic at its peak in 1839. The tolls, and the obsoleteness of the canal, proved unpopular, and Congress began urging the government to buy out private shareholders and reduce the tolls. The government buyout, although at times passed by the Senate, met with heavy opposition, especially from Indiana representatives, which was still attempting to build its own canal as late as 1842. Other opponents believed the move would be a violation of states' rights
.
To solve the problem, the company's stockholders chose to buy themselves out—with the Congress's money. In lieu of receiving dividends, investors elected to use company profits to redeem their private shares at a substantial premium, until the government owned all remaining shares. The private shareholders would make a tidy profit, and the government would wind up owning the canal. Stockholders approved this policy in 1842 and the government took no part in the decision. The canal remained heavily profitable as the buyout continued, despite an economic depression, allowing the toll to be decreased to 50 cents per ton from 1842 to 1855, when the buyout plan was completed. The deal proved to be a windfall to investors.
, as a step that would further erode States' rights.
Although the government owned all meaningful stock in the company by 1855, it proved difficult for Congress to approve a bill formally taking control. Bills failed from 1854 to 1860 on the grounds of constitutionality, economy and efficiency. Senator Lazarus Powell of Kentucky said in 1860 "the only reason why the government of the United States has not long taken charge of the canal, is the fear that there would be demand on the national treasury to Enlarge it". Congress eventually passed on taking over the canal, but allowed the company to make major improvements at its own expense starting in 1860.
During the American Civil War
, Confederate forces had intended to capture the canal in order to hamper the Union war effort. One officer in the Confederacy suggested destroying it so "future travelers would hardly know where it was".
, and the company was $1.6 million in debt by 1866. In 1867, Congress, now largely free of opposition to the plan, allowed the Army Corps of Engineers to take over improvements to the canal. The two new locks, each 390 feet (118.9 m) long and 90 feet (27.4 m) wide, opened in February 1872. By 1877 canal traffic had tripled from any previous level.
However, by the 1870s, more goods were being shipped by railroad and the river was no longer the primary means of transportation, an economic change to which the failures to improve the canal contributed. The river had become most useful for transporting heavy, low-value industrial supplies such as coal, salt and iron ore. In May 1874 Congress passed a bill allowing the Army Corps of Engineers to take over the canal, and authorizing the treasury to pay off the bonds remaining from the recent improvements, and the Louisville and Portland Canal Company faded out of existence. In 1880 Congress made the canal free of toll, and began paying its expenses from the treasury.
A new lock was built in 1921 as a part of Congress's plan for the "canalization" of the Ohio River. As a part of radical enlargements in 1962 to build a new dam and expand the width to 500 feet (152.4 m), the canal became known the McAlpine Locks and Dam
.
Falls of the Ohio National Wildlife Conservation Area
The Falls of the Ohio National Wildlife Conservation Area is a national, bi-state area on the Ohio River near Louisville, Kentucky in the United States, administered by the U.S. Army Corps of Engineers. Federal status was awarded in 1981.- Overview :...
in the Ohio River
Ohio River
The Ohio River is the largest tributary, by volume, of the Mississippi River. At the confluence, the Ohio is even bigger than the Mississippi and, thus, is hydrologically the main stream of the whole river system, including the Allegheny River further upstream...
near Louisville, Kentucky
Louisville, Kentucky
Louisville is the largest city in the U.S. state of Kentucky, and the county seat of Jefferson County. Since 2003, the city's borders have been coterminous with those of the county because of a city-county merger. The city's population at the 2010 census was 741,096...
. It opened in 1830, and was operated by the Louisville and Portland Canal Company until 1874, and became the McAlpine Locks and Dam
McAlpine Locks and Dam
The McAlpine Locks and Dam refers to the series of locks and the hydroelectric dam in Louisville, Kentucky at the Falls of the Ohio. They are located at mile point 606.8 and control a 72.9 mile long navigation pool...
in 1962 after heavy modernization.
Although initially a private company, construction of the canal required heavy investment from the federal government, which gradually came to own the canal through an unusual buyout plan. The canal represented the first major improvement to be successfully completed on a
major river of the United States.
Background
Portland, Louisville
Portland is a neighborhood and former independent town two miles northwest of downtown Louisville, Kentucky. In its early days it was the largest of the six major settlements at the Falls of the Ohio River, the others being Shippingport and Louisville in Kentucky and New Albany, Clarksville, and...
and Shippingport
Shippingport, Kentucky
Shippingport, Kentucky is an industrial site and former settlement near Louisville, Kentucky on a peninsula near the Falls of the Ohio. It was incorporated without a name on October 10, 1785, then became Campbell Town after Revolutionary War soldier John Campbell, who had been granted the land for...
, were founded before a canal was available. These towns based much of their early growth on portage
Portage
Portage or portaging refers to the practice of carrying watercraft or cargo over land to avoid river obstacles, or between two bodies of water. A place where this carrying occurs is also called a portage; a person doing the carrying is called a porter.The English word portage is derived from the...
from ships traveling down the river, which were unable to navigate the falls fully loaded except for a few weeks in spring when water was very high. Although this source of income was popular with locals, shippers and boatmen disliked the expense and hassle. The situation caused wide fluctuations in price for farmers upstream and merchants in the river's eventual destination, New Orleans
New Orleans, Louisiana
New Orleans is a major United States port and the largest city and metropolitan area in the state of Louisiana. The New Orleans metropolitan area has a population of 1,235,650 as of 2009, the 46th largest in the USA. The New Orleans – Metairie – Bogalusa combined statistical area has a population...
, as there was a glut of shipments during the few weeks of high water each year.
Precursors
Engineer and canal advocate Christopher Colles petitioned the Congress of the ConfederationCongress of the Confederation
The Congress of the Confederation or the United States in Congress Assembled was the governing body of the United States of America that existed from March 1, 1781, to March 4, 1789. It comprised delegates appointed by the legislatures of the states. It was the immediate successor to the Second...
in 1783 for a land grant at the falls, with a promise to start a canal company. They declined. As early as 1805 there were serious plans for a canal to bypass the falls, with rival sides supporting a canal either on the Kentucky (south) or Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
(north) side of the river. Proponents of an Indiana-side canal included Cincinnati
Cincinnati, Ohio
Cincinnati is a city in the U.S. state of Ohio. Cincinnati is the county seat of Hamilton County. Settled in 1788, the city is located to north of the Ohio River at the Ohio-Kentucky border, near Indiana. The population within city limits is 296,943 according to the 2010 census, making it Ohio's...
businessmen, who feared economic competition from Louisville. Both Kentucky and Indiana chartered canal companies in 1805, although nothing came of either effort. Indiana chartered a second company
Indiana Canal Company
The Indiana Canal Company was a corporation first established in 1805 for the purpose of building a canal around the Falls of the Ohio on the Indiana side of the Ohio River...
in 1818, which made preliminary excavations, work was halted after the possible sabotage of a dam, and all efforts were halted by the Panic of 1819
Panic of 1819
The Panic of 1819 was the first major financial crisis in the United States, and had occurred during the political calm of the Era of Good Feelings. The new nation previously had faced a depression following the war of independence in the late 1780s and led directly to the establishment of the...
.
In 1808 Secretary of the Treasury Albert Gallatin
Albert Gallatin
Abraham Alfonse Albert Gallatin was a Swiss-American ethnologist, linguist, politician, diplomat, congressman, and the longest-serving United States Secretary of the Treasury. In 1831, he founded the University of the City of New York...
suggested federal backing of a Kentucky-side canal. The United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
passed bills to this effect in 1810 and 1811, but both died in the House
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
. Although little materialized politically, the subject of the canal and federal funding for it was widely debated in Kentucky, Indiana, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, and Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
in the 1820s.
Formation
Charles Mynn Thruston
Charles Mynn Thruston was a soldier, farmer, politician, and a brigadier general in the Union Army during the American Civil War. He served as the mayor of Cumberland, Maryland, from 1861 to 1862....
of Louisville. The charter established an initial toll of 20 cents per ton. There no limits on the amount of time the company would be allowed to operate the canal. $350,000 was raised from the initial sale of stock in March 1826, and $150,000 soon after. Much of this capital came from Philadelphia
Philadelphia, Pennsylvania
Philadelphia is the largest city in the Commonwealth of Pennsylvania and the county seat of Philadelphia County, with which it is coterminous. The city is located in the Northeastern United States along the Delaware and Schuylkill rivers. It is the fifth-most-populous city in the United States,...
investors. This private, out of state ownership was praised at the time by Louisville's leading newspaper, the Public Advertiser
Public Advertiser
The Public Advertiser was a London newspaper in the 18th century.The Public Advertiser was originally known as the London Daily Post and General Advertiser, then simply the General Advertiser consisting more or less exclusively of adverts. It was taken over by its printer, Henry Woodfall, and...
, which said "no one is now apprehensive of any imprudent or unjust action on the part of the Legislature".
In 1824, it was estimated that the canal could be completed in a year for $300,000. As it became evident the canal would have to be dug through solid rock, the cost rose past $375,000 with two years of construction required, and some local investors, who were first to learn of the difficulties, defaulted on their investments. In May 1826 the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
voted to invest about $100,000 to shore up the company and make it a mixed corporation, but financial difficulties continued as the course of the canal had to be changed, and Congress invested an additional $133,500 in 1829.
The company was still due to run out of funds by the end of 1829, and a third influx of funds from Congress was vetoed by Andrew Jackson
Andrew Jackson
Andrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...
, who denounced the practice of giving federal funds to private corporations which would be able to profit from the infrastructure the government partially financed. This ended federal stock purchases related to the canal. Thus, the company was forced to borrow $154,000 in 1830, and the partially completed canal was opened in December of that year. The first steamboat to pass through was the Uncas. By this time, the stock was valued at over $1,000,000 of which the federal government held $290,000.
An interesting anecdote is that Abraham Lincoln is said to have worked on the construction of the canal in 1827.
The canal's dimensions, 50 feet (15.2 m) wide, other than overall length, were huge in comparison with projects like the Erie Canal
Erie Canal
The Erie Canal is a waterway in New York that runs about from Albany, New York, on the Hudson River to Buffalo, New York, at Lake Erie, completing a navigable water route from the Atlantic Ocean to the Great Lakes. The canal contains 36 locks and encompasses a total elevation differential of...
, in order to accommodate the growing boats that carried goods on the western rivers of the United States. Nevertheless, the canal became practically obsolete soon after opening as steamboat
Steamboat
A steamboat or steamship, sometimes called a steamer, is a ship in which the primary method of propulsion is steam power, typically driving propellers or paddlewheels...
technology evolved. This, combined with rapid increase of tolls, decreased the economic impact of the canal. Although the canal decreased the freight rate along the river, it did not appear to significantly lower the prices of commodities, which fell at a faster rate in the 25 years before the canal opened than they did in the 25 years afterwards.
Government buyout
States' rights
States' rights in U.S. politics refers to political powers reserved for the U.S. state governments rather than the federal government. It is often considered a loaded term because of its use in opposition to federally mandated racial desegregation...
.
To solve the problem, the company's stockholders chose to buy themselves out—with the Congress's money. In lieu of receiving dividends, investors elected to use company profits to redeem their private shares at a substantial premium, until the government owned all remaining shares. The private shareholders would make a tidy profit, and the government would wind up owning the canal. Stockholders approved this policy in 1842 and the government took no part in the decision. The canal remained heavily profitable as the buyout continued, despite an economic depression, allowing the toll to be decreased to 50 cents per ton from 1842 to 1855, when the buyout plan was completed. The deal proved to be a windfall to investors.
Obsolescence
Even in the early 1830s, many new steamboats were too large to use the canal safely. The lower end of the canal received complaints because it opened into a narrow part of the river with a swift current. The obsolescence of the canal was shown as canal business failed to grow during the 1850s, despite booming growth in river traffic during that decade. The company plead for the federal government to finance improvements, but this was opposed by many, including Jefferson DavisJefferson Davis
Jefferson Finis Davis , also known as Jeff Davis, was an American statesman and leader of the Confederacy during the American Civil War, serving as President for its entire history. He was born in Kentucky to Samuel and Jane Davis...
, as a step that would further erode States' rights.
Although the government owned all meaningful stock in the company by 1855, it proved difficult for Congress to approve a bill formally taking control. Bills failed from 1854 to 1860 on the grounds of constitutionality, economy and efficiency. Senator Lazarus Powell of Kentucky said in 1860 "the only reason why the government of the United States has not long taken charge of the canal, is the fear that there would be demand on the national treasury to Enlarge it". Congress eventually passed on taking over the canal, but allowed the company to make major improvements at its own expense starting in 1860.
Economic impact
Despite complaints from shippers about the high toll and insufficient capacity of the canal, it had a profound impact on the local economy—initially seen as a negative one—due to the loss of traditional portage business from passing boats. An introductory remark in the Louisville Directory of 1844 explained public sentiment towards the canal: "The Louisville and Portland Canal, as constructed and maintained, is precisely one of those improvements for private interests, at the expense of the public good, which is obnoxious to the good of the whole community". Portland and Shippingport, which once rivaled Louisville in economic strength, could not keep pace with it and eventually were annexed by Louisville. Portland became a neighborhood in West Louisville, and Shippingport, made into an island by the canal, would decline slowly for a century before the government bought out the remaining families in 1958.During the American Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
, Confederate forces had intended to capture the canal in order to hamper the Union war effort. One officer in the Confederacy suggested destroying it so "future travelers would hardly know where it was".
Improvements
Congress ignored the canal from 1860 to 1867, freeing up the directors to improve it. A $865,000 plan for improvements began, but work was slowed drastically by the American Civil WarAmerican Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
, and the company was $1.6 million in debt by 1866. In 1867, Congress, now largely free of opposition to the plan, allowed the Army Corps of Engineers to take over improvements to the canal. The two new locks, each 390 feet (118.9 m) long and 90 feet (27.4 m) wide, opened in February 1872. By 1877 canal traffic had tripled from any previous level.
However, by the 1870s, more goods were being shipped by railroad and the river was no longer the primary means of transportation, an economic change to which the failures to improve the canal contributed. The river had become most useful for transporting heavy, low-value industrial supplies such as coal, salt and iron ore. In May 1874 Congress passed a bill allowing the Army Corps of Engineers to take over the canal, and authorizing the treasury to pay off the bonds remaining from the recent improvements, and the Louisville and Portland Canal Company faded out of existence. In 1880 Congress made the canal free of toll, and began paying its expenses from the treasury.
A new lock was built in 1921 as a part of Congress's plan for the "canalization" of the Ohio River. As a part of radical enlargements in 1962 to build a new dam and expand the width to 500 feet (152.4 m), the canal became known the McAlpine Locks and Dam
McAlpine Locks and Dam
The McAlpine Locks and Dam refers to the series of locks and the hydroelectric dam in Louisville, Kentucky at the Falls of the Ohio. They are located at mile point 606.8 and control a 72.9 mile long navigation pool...
.