Louisville and Portland Canal

The modern canal after many enlargements

The Louisville and Portland Canal was a 2-mile (3.2 km) canal bypassing the Falls of the Ohio River near Louisville, Kentucky. The Falls form the only barrier to navigation between the origin of the Ohio at Pittsburgh and the port of New Orleans on the Gulf of Mexico; circumventing it was a priority for Pennsylvanian and Cincinnatian merchants from the founding of Louisville. It opened in 1830 as the private Louisville and Portland Canal Company but was gradually bought out during the 19th century by the federal government, which had invested heavily in its construction, maintenance, and improvement. The Louisville and Portland Canal became the McAlpine Locks and Dam in 1962 after extensive modernization.

The canal represented the first major improvement to be successfully completed on a major river of the United States.

Background

File:TownsitestheFalls.jpg

Townsites along the Falls of the Ohio.

See also: History of U.S. canals

The Falls of the Ohio are the only natural obstruction to riverine traffic from the source of the Ohio at Pittsburgh, Pennsylvania, to the Gulf of Mexico. Some of the earliest cities in Kentucky – Louisville, Portland, and Shippingport – developed from the need for portage of cargo around the rapids, except during a few weeks each spring when water on the river was very high. Although this source of income was popular with locals, merchants invested upriver – particularly those in Philadelphia and Cincinnati – disliked the expense and hassle. The situation caused wide fluctuations in prices up- and downstream, as there was always a glut of shipments during the few weeks of high water each year.

Thomas Hutchins’s 1778 map of the rapids

The first meeting of the trustees of the Town of Louisville on February 7, 1781, adopted a petition to the Virginia General Assembly for the right to construct a canal around the falls. Two years later, engineer and canal advocate Christopher Colles petitioned the Congress of the Confederation, promising to start a canal company in exchange for a grant comprising the necessary land. They declined.

Serious plans for a canal circulated throughout the early 1800s, with Cincinnatians in particular advocating a northern route through Indiana in order to blunt competition from Louisville. Canal companies were chartered by the state legislatures of both Kentucky and Indiana in 1805, but nothing came of either effort. In 1808, the Federalist Secretary of the Treasury Albert Gallatin suggested national funding for a Kentucky-side canal. The United States Senate passed bills to this effect in 1810 and 1811, but both died from Democratic opposition in the House. The Indiana Canal Company, that state's second effort, was chartered in 1818 and made preliminary excavations using private and state funds. The failure of a dam and the Panic of 1819 ended the attempt. Rumors that the Indianan dam had been sabotaged arose from the risk a canal posed to much of Louisville's economy, including not only forwarding, storage, drayage, and shipping but also provisioning, financing, hotels, and entertainment. Against this, however, some locals argued for the benefit a canal would provide to local manufacturing.

Canal Company

The route of the Louisville and Portland Canal in the 1850s.

Despite the completion of the federally-funded National Road in the 1810s and the state-funded Erie Canal in the 1820s (the latter of which cut transportation costs across New York by around 95%), continuing Democratic and Louisvillian opposition crippled attempts to fund a public canal in the Kentucky General Assembly. Instead, Charles Thurston of Louisville sponsored a bill to charter the private Louisville and Portland Canal Company. The charter established an initial toll of 20¢ per ton, permitted the company to operate the canal in perpetuity, and granted it powers of eminent domain over land necessary to the canal's construction. The initial estimates in 1824 called for one year of construction at a cost of $300,000.

The company was chartered in 1825. Its initial members included James Guthrie, John J. Jacob, Nicholas Berthoud, John Colmesnil, James Hughes, Robert Breckinridge, Isaac Thom, Simeon Goodwin, Charles Thurston, Worden Pope, William Vernon, Samuel Churchill, James Brown, and James Overstreet. Guthrie was elected president. The canal was authorized by its charter to sell up to 6000 shares of stock at a cost of $100 each, but the company required only $10 down and an additional $10 quarterly. In this way, $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 May 1826, the United States Congress voted to purchase 1,000 shares as well.

Construction began in 1826. As it became evident that the canal would have to be dug through solid rock, the cost estimate rose past $375,000 with two years of construction required. Local investors were the first to learn of the difficulties; several defaulted on further payment towards their shares, reducing the company's available capital. Abraham Lincoln is said to have worked on the construction of the canal in 1827. The course was found to require adjustment 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 the newly-elected Pres. Andrew Jackson, who denounced the practice of giving federal funds to private corporations. The company was forced to borrow $154,000 in 1830. By this time, the stock was valued at over $1,000,000, of which the federal government held $290,000.

The first ship – the SS Uncas – passed through the partially-completed locks in December of 1830. The canal was fully completed in 1833, six years behind schedule. Its 50-foot (15 m) wide dimensions were huge in comparison with projects like the Erie Canal and intended to permit full-sized ships to pass from one side of the falls to the other. Nevertheless, the growing power and size of steamboats left the canal nearly obsolete soon after opening at the same time that the Alabama Fever and booming Black Belt cotton plantations increased demand for produce and goods from the north. The canal increased its prices to 40¢ per ton in 1834 and to 60¢ per ton in 1837 and still saw traffic increase from 170,000 tons in 1834 to 300,000 in 1839. At the same time, Louisville's "carrying trade" also increased to a greater volume than before and a line of the Lexington and Ohio Railroad was constructed beside the canal from Louisville to Portland in 1838.

The company's high tolls and disinterest in improving the canal either to enlarge it or to correct the lower end, which opened into a narrow part of the river with a swift current, provoked dissatisfaction among its customers. Ohioan and Pennsylvanian opposition in Congress sometimes passed bills in the Senate approving a full buyout of the company, but such bills were consistently defeated in the House by Kentuckians, Southern proponents of states' rights, and Indianan representatives, who still hoped to build their own canal as late as 1842. The company's management opted to solve the problem on their own: instead of funding expansions, improvements, or dividends, profits from the canal were used to purchase privately-held shares at a premium, gradually increasing the government's ownership stake. Despite the succession of long depressions set off in 1837 and 1843 and a reduction of the toll to 50¢ per ton in 1842, the company remained highly profitable and the buyout was completed in 1855.

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 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

The high toll and insufficient capacity of the canal 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.

Nonetheless, 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.

File:Picture 1661.jpg

The 1863 home of a canal superintendent, commanding a direct view of the works.

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".

Improvements

Union Troops arrive at Louisville, 1862

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 War, 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 (120 m) long and 90 feet (27 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 (150 m), the canal became known the McAlpine Locks and Dam.

The east entrance to the Portland Canal.

See also

• Indiana Canal Company
• McAlpine Locks and Dam
• steamboats of the Mississippi