Ohio Canal Era

Chapter 1: Toward a Canal Policy, 1820-1825

++-+--=r>--}++++-~» r ~~?+ roo)' - -~~~~-- ---~-~ ~~~-~-~-~~~~~~~~CHAPTER I Toward a Canal Policy 1820-1825 "1: X THEN the 1819 panic first struck, many in Ohio blamed V V the banks for the crisis, and they were taken by surprise when the depression continued into 1821 and then 18n. But the crucial problem of the West was in fact not banking but trons" porlation. For only improved transport facilities could provide what one Cincinnati editor correctly perceived as the solution: "a steady and adequate market for produce.'" Two decades of inflated wartime prices had obscured the more fundamental diffi" cuJties which threatcned to retard longn term economic growth in the West. As Ohio's political leadership came to recognize this fact, men like Ethan Allen Brown gave more sustained attention to the prospects of improving transportation, and especially to the project for a canal between Lake Erie and the Ohio River.O It came naturally enough to seek government action in a crisis of this kind. Much as iaisser"iaire ideas may have been debated and occasionally exalted in the early nineteenth century, Americans were well accustomed to using their state governments to remove bottlenecks that hindered economic growth.3. Ohio was no exception, and evidence of a positive attitude toward state inter~ vention in the economy abounded in the statute books. Even before Ohio's admission to the Union in 1803, the territerial legislature of the Old ~orthwest had asserted commonwealth interests in important areaS of economic life. Some territorial laws had been designed to regulate enterprises deemed essential to the prosperity of agriculture, as for instance a statute of 1799 that required millers to keep on hand standard measures of volume 8 ) 01110 CANAL ERA and specified the rates a miller might charge. After 1803 the state's legislature set bounties on the hides of wolves, to aid in protecting livestock; it permitted munic;pal governments to regulate local markets and required them to oversee the fencing of livestock; it required construction of locks at private dam sites on navigable streams; and it brought order into the terms of COmmerce by instituting standard weights and measures. Perhaps the most larreaching measure of early economic policy was a banking lawaI 1816, designed both to aSsert state power over bank operations and to enhance the public revenues. The law required newly chartered banks to issue a portion of their capital stock to the state, and thereby assured the state a proportion of any profits.' But the most sustained attention was given to tbe problem of transportation: the Ohio legislature provided for financing of local roads, regulated bridges and ferries, issued charters to private companies for turnpikes and other facilities, permitted river-improvement and bridge companies '0 run lotteries, granted local governments the right to exercise eminent domain for road construction . and required two days of labor on the public roads from able-bodied males over age 2 I, or else commutation of the road service at one dollar per day. Nevertheless, this wide range of polkies did not yield much in tangible benefits. The key problem was lack of capital. The total tax revenues of the state government itself amounted to $200,000 annually during the decade before r820; and since most of this was required to support general -purpose government, little was left to finance roads and other transport improvements. Moreover, the private companies that were granted charters to build turnpikes, bridges, and other facilities faced the problem of deficient capitaL As a result, few of them built at all, and those that did could seldom maintain their works in good repair. Nearly all the money expended on public road construction came from the Three Per Cent Fund---obtained from the Federal government under terms of the statehood compact, which had provided for 3 pef cent of the proceeds of public land sales in Ohio to be paid to the state-and in all this fund amounted to only $170,000 up to 1815." Even the Three Per Cent Fund did not lead to the construction of major highways. For eaeh year the legislature parceled out the TOl'/urd (1 C(1lwi Policy ( 9 money to each county. never concentrating funds on a few major highways, never adopting an overall statewide road plan. never establishing priorities. Thus the fund was dissipated. And the process whereby this had occurred gave vivid evidence of the power of localism in Ohio state politics: in...