pennsylvania’s failed canals -- 4/10/23
Today's selection -- from Over the Alleghenies: Early Canals and Railroads of Pennsylvania by Robert J. Kapsch. Built in the mania that followed the overwhelming success of New York’s Erie Canal, the state bonds issued to build Pennsylvania’s canals ended up in default:
"In New York, the trunk line of the Erie Canal was built first and then the branch canals were built, elms advancing the completion date of the most profitable portion of the New York canal system -- the east-west connection -- and delaying expenditures on less profitable branches. In Pennsylvania, the Main Line was built at the same time as the branches. In some cases, the canal commissioners built canals, like the French Creek Feeder, that would not be used for a decade.
"Yet another factor leading to eventual failure was the lack of a single leader with the stature of New York's De Witt Clinton or the Chesapeake and Ohio Canal's Benjamin Wright who could develop and guide the Pennsylvania program.
"Organizationally, Pennsylvania's canals and railroads construction program was vulnerable to political pressure and was in little position to resist these pressures. The most dramatic examples were the building of the French Creek Feeder and the Gettysburg Extension Railway. Thus, Pennsylvania built canals and railroads that should not have been constructed or, at the very least, should have been delayed. In addition, the program was so large that it tended to bid up prices for men and material -- in effect, the various divisions were bidding against each other. This inability to achieve cost control, partially because of the lack of competent engineers and partially because of large engineering failures, was accompanied with project delays and slowed revenues.
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| Map of historic canals and connecting railroads in Pennsylvania |
"Not all the faults of Pennsylvania's canals and railroads construction program were the result of poor management, however. This massive construction program was undertaken when the American economy was undergoing a major speculative expansion. 'Canal mania' was one aspect of this expansion.
"The Panic of 1837 was the game changer, though. Beginning in 1837, predicted revenues were no longer realized, and it was no longer possible for the proponents of Pennsylvania's canals and railroads to argue that the financial corner would soon be turned. By 1840, it was readily apparent that continued borrowing to cover costs was no longer a viable option. Increased taxation to cover the mounting debt was proposed but not implemented. Thus, by 1842, the state defaulted on its loans. The history of Pennsylvania's canals and railroads construction program was one of building necessary, but also unnecessary, canals and railroads, accompanied by massive cost overruns, projects delays, and limited revenues. Almost from the beginning, the increasing costs of this program were met by borrowing new funds to pay the interest on old debts. This could not continue, and the day of reckoning came.
"While this process unfolded, the legislature's and public's confidence in the program declined steadily, beginning when dams and bridges failed and corruption on the projects became evident. Later, it was further eroded through unnecessary projects like the Gettysburg Extension Railroad or by the building of canals not used for a decade, like the French Creek Feeder. Still later, it further disintegrated when the state defaulted on its debt. By 1843, most of the state legislators and the majority of the public wanted to get rid of the program, and at almost any cost.
"Pennsylvania's canals and railroads construction program was undoubredly a failure. But it was also magnificent in its way. For example, the Philadelphia and Columbia Railroad and the Allegheny Portage Railroad ushered in the modern railroad of the nineteenth century. The state built almost 11000 miles of canals. Individual canals helped establish new industries, such as the Delaware Division and the anthracite coal industry. These canals and railroads greatly reduced time required for travel throughout the state, and freight cost plummeted. Before the building of Pennsylvania's canals and railroads, travel throughout the state was crude, primitive, and slow. After, all parts of the state were linked through an extensive system of new canals and railroads."
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