USA > Indiana > Centennial history and handbook of Indiana : the story of the state from its beginning to the close of the civil war, and a general survey of progress to the present time > Part 16
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The National and Michigan Roads .- In the road history of Indiana these two thoroughfares stand distinct from the system of State roads, though the one last named was constructed by the State. The National road, as the name im- plies, was the work of the Federal government, designed as a great highway to connect the west with the east. It began at Cumberland, Md. (from which fact it at first bore the name of the "Cumberland road"), and was to reach St. Louis after traversing parts of Pennsylvania and West Virginia and the central portions of Ohio, Indi- ana and Illinois. As originally planned it would have passed south of Indianapolis and near Co- lumbus, in Bartholomew county, but through the efforts of Oliver H. Smith, when a congressman, the route was changed. The first Federal legis- lation regarding this road dates back to 1806 and its extension toward and into the western coun- try was a matter of lively interest for many years. It reached the Indiana line in 1827, the first work in this State being in Wayne county that year. In 1831 there was an appropriation of $75,000 for work that included the bridge over White river at Indianapolis. Throughout the thirties, as before, its completion and improvement was an ever-recurring theme for the newspapers, but the improvement in the west was comparatively inferior, the expenditure on it here being but about $3,000 per mile as against $6,000 on the eastern end. The money for this road was de- rived from the sale of lands in the public do- main, two per cent. being reserved for internal improvements under the direction of Congress .*
The Michigan road, from Madison on the Ohio river to the mouth of Trail creek on Lake Michi- gan, was a work of the thirties. It traversed the central portion of the State from south to north as the National road did from east to west, the two forming a pair of trunk lines that gave en- trance to the different sections of the State. The southern terminus was determined, as the south- ern terminus of the first railroad was a little later, by the political influence then existing at Madi- son. The northern terminus was determined by the chance of a good lake harbor at the mouth of Trail creek, and this also determined the loca- tion of Michigan City. It ran from Madison "al-
* For long paper on National road, and additional matter re- lating to the road in Indiana, see Ind. Quar. Mag. Hist., vol. iii. "The Old Pike," by T. B. Searight, is the fullest work on the road as a whole.
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CENTENNIAL HISTORY AND HANDBOOK OF INDIANA
most due north through Jefferson and Ripley counties to Greensburg in Decatur. Thence, by a direct line, it led across Shelby county to the capital. The important sections of the road were those from Indianapolis across Hamilton, Boone, Clinton and Carroll counties to Logansport, and from that place due north again across Cass, Fulton and Marshall to South Bend, and thence west to Michigan City. During eight months of the year it was an open, passable highway, but during the winter it was an endless stream of
makers, was, of course, largely farcical. The value of the lands about balanced the cost of the road, which, up to 1840, was something like $242,000.
CANALS
Ohio Falls Canal .- The first canal agitation in Indiana was for a waterway around the falls of the Ohio river, which were a serious impedi- ment to navigation. This concerned Kentucky and Ohio quite as much as Indiana, and one of
FIVEDOLLARS FT
Old National Road Bridge Over White River, Indianapolis .- Sketch by Alois E. Sinks.
black mud and almost useless. Its importance may be estimated from the fact that one-half of the pioneers of the northwest quarter of Indiana reached their homes over it" (Esarey). The funds for this work were derived from lands that were given by the Potawatomie Indians through what is known as the Mississinewa treaty, made in October, 1826. These donated lands con- sisted of one section for each mile of the pro- posed highway, granted to the State "as an evi- dence of the attachment which the Potawatomie tribe feel toward the American people, and par- ticularly to the soil of Indiana"-which fine sen- timent, evolved and framed by the white treaty-
the propositions in the twenties was a joint work by Ohio and Indiana, but nothing came of it.
As early as 1805 a company was formed in this State, composed largely of Clark county citizens. and $120,000 subscribed for the canal in question (Esarey). Soon after the admission of the State the Legislature chartered "The Ohio Canal Com- pany," which aimed to raise a capital of $1.000 .- 000, but failed to do so. A reorganized company with a new charter was authorized in 1818 to raise money by lottery, the State itself to be a stockholder, and the following year work was begun. Like much of the subsequent canal work. however, the capital and labor expended were
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CENTENNIAL HISTORY AND HANDBOOK OF INDIANA
a sheer loss Support was inadequate and prog- ress slow. In 1825 Kentucky took up the work on its side. The cut could be made much cheaper there. The Kentucky enterprise had the back- ing of the Federal government, and the Indiana effort, that had persisted stubbornly for twenty years or more, received its death-blow. That Louisville became a metropolis and Jeffersonville and New Albany sank into desnetude was no doubt largely determined by the canal as a com- mercial factor. The Indiana scheme seems to have died hard, for as late as 1836 there was a ficker of revival when a company obtained an- other charter for the renewal of work on our side. This, however, never got farther than the first movement.
Whitewater Canals; East and West Forks. --- The Whitewater canal that traversed the val- ley of the West Fork as far north as Hagers- town, Wayne county, connecting it with the Ohio river at Lawrenceburg and Cincinnati, was part of the State internal improvement scheme of 1836, but as early as 1822 the question of a canal through that important region was agi- tated. It need be only mentioned here. For "Completion of the Whitewater Canal" see chap- ter xii.
The work up the east fork, known in its day as the Richmond and Brookville canal, was never finished, but it was begun and from 1834 to the close of that decade it was a lively hope, consid- erable energy and money being spent on it.
The Wabash and Erie Canal .- The question of a canal to connect the waters of the Wabash and Maumee rivers, which ultimately became the famous Wabash and Erie, began to be agitated in the carly twenties. This, Governor Hen- dricks urged, would open an inland navigation from New York to New Orleans (via the Erie canal of New York) and would be the great agent in enhancing the value of vast quantities
of public lands. Indiana alone was too poor tu attempt the work, and after repeated appeals for Federal aid and much debating of the subject, Congress, in 1827, made liberal grants of land along the proposed route amounting to three thousand two hundred acres for each lineal mile. Construction was begun in 1832 and in 1836 the work was merged in the State's plans for gen- eral improvement .*
Other canal propositions that never got beyond talk, claimed public attention during these earlier years, and by the early thirties the agitation of railroads became pronounced. In a word, the fermentation that resulted in the famous internal improvement law was for ten years or more gath- ering form and becoming a part of public thought. It became a factor in politics and the men rode into popular favor who mounted the hobby of State improvements by the paternalistic plan. Governor Ray was an example of this. His ad- vocacy of the growing sentiment made his politi- cal fortune, and an excerpt from his message of 1826, couched in his characteristic swelling style, indicates that he made the most of it. "The whole country," he says, "as if by one impulse, is moved by the master spirit that is abroad. On the construction of roads and canals we must rely as the safest and most certain State policy, to relieve our situation, place us among the first in the Union, and change the cry of hard times into an open acknowledgment of content- edness." In 1829 we find him arguing for a gen- eral system of State improvements, including a railway, canals and turnpikes-a scheme not un- like the one that the State adopted in 1836. In view of all this it is perhaps safe to say that the great paternalistic experiment, however ill-ad- vised it may seem in the light of history, was inevitable, being but a logical sequence.
* For "Wabash and Erie Canal and Commercial Development" see chap. xii.
CHAPTER X
AN EXPERIMENT IN PATERNALISM
The Problem .- At this point the question of progress as determined by the internal im- provement movement becomes secondary to an interesting and profitable study of influences and conditions that made for retrogression, and which resulted in the most disastrous financial set-back in the State's history.
To understand the great paternalistic experi- ment that distinguished the fourth decade of In- diana's history we must consider it as a part of a much wider movement. The conditions in the interior of America with its vast distances and its isolated inland centers made the problem of transportation particularly acute and particularly difficult because of the enormous cost and the in- adequate wealth of a thinly scattered population.
Federal Aid .- Nothing short of State aid, it seemed, could help the people to the facili- ties they needed. Federal aid (as in the building of the National road) was early invoked, but all that could be hoped for from that source was trivial as compared with the relief demanded by the various sections of many States. The most substantial help afforded by the general govern- ment was the gift of three per cent. out of the sales of public lands. This yielded in Indiana, altogether, $575,547.75, which was applied to the opening of numerous "State" roads. By the mid- dle thirties these roads pretty well covered the State, but were the rudest of thoroughfares, and owing to the nature of most of the country, were virtually untravelable in the bad seasons.
The Seeming Solution .- The only solution of the transportation question was in expensive im- proved turnpikes or yet more extensive canals or railroads; the construction of such works by private enterprise at that day was out of the question, and thus the tide turned to the notion of the one agency big enough to accomplish the desired results-the State. This idea prevailed and bore fruit in a number of states, Indiana be- ing but one of these to project and attempt a system of public works for the purpose of trans- portation. The sentiment in Indiana for such a scheme was a growth of several years, as has already been shown. It had its opponents, who
saw the dangers ahead, but the advocates in- creased till they took possession of the day. The politicians who championed the idea were the ones who rode into power ; arguments grew by what they fed upon, and these plentifully bol- stered up by figures convinced the people that roads and canals, at whatever cost, were a colos- sal money-making proposition. The increase of commerce and the tolls from canals would not only pay for the canals but return a surplus that would relieve the citizen from tax-paying.
Difficulties of Fixing on a System .- The detriment to final legislation was the difficulty of elaborating a system that would benefit every- body. Of course no taxpayer wanted to con- tribute to improvements that would give his neighbors all the benefit and leave him still in the woods, and a system that could touch every county in the State was manifestly impossible. Also, there was a division of opinions as to the values and practicability of different kinds of improvements-turnpikes, canals and railroads.
The Internal Improvement Bill .- These dif- ferences kept the Legislature jockeying for two or three sessions, but finally, in January of 1836, the internal improvement bill, famous in our an- nals, was passed, to the great joy of the people, who made bonfires and jubilated wildly in honor of the event. The bill provided for eight differ- ent works, including turnpikes, canals, railroads, and the improvement of the lower Wabash, the scheme as it originally stood, together with the separate appropriations, being :
1. A canal down the valley of the Whitewater from the National road to the Ohio, and a canal or railroad to connect the upper Whitewater with the Central canal at some point in Madison or Delaware county, if possible. Appropriation, $1,400,000.
2. A canal, to be known as the "Central." from some point on the upper Wabash to Indian- apolis via Muncie, and down White river to the forks; thence to Evansville. Appropriation. $3,500,000.
3. An extension of the Wabash and Erie canal from Tippecanoe river to Terre Haute.
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CENTENNIAL HISTORY AND HANDBOOK OF INDIANA
thence by del river to the Central, or to the mouth of Black creek at the Central, in Knox county. Appropriation, $1,300,00 ).
1 \ railroad from Madison, via Columbus and Indianapolis, to Lafayette. Appropriation, $1,300,000.
5. A macadamized turnpike from New _ Al- bany, by way of Greenville. Fredericksburg. Paoli, Mt. Pleasant and Washington to Vin- Celles. Appropriation, $1.150,000.
6. A macadamized road or railroad from Jef- ;orsonville to Crawfordsville, by way of New Al- Dany, Salem, Bedford, Bloomington and Green- castle. AAppropriation, $1.300,000.
7. The improvement of the Wabash river from Vincennes to its mouth. Appropriation. $50,000.
8. A survey of a canal or railroad from the Wabash and Eric canal at or near Fort Wayne to the lake at Michigan City, by way of Goshen, South Bend and Laporte.
These various works, all of which the State pledged itself to build as expeditiously as pos- sible. totaled about one thousand two hundred miles and the total estimated cost was $20,000,- 000 (W. 11. Smith), $10,000,000 of which was borrowed at once for twenty-five years at six per cent .. with the works themselves and all grounds, rents, tolls and profits given as security.
First Effect of the Bill : Speculation .- One of the first effects of the passage of this bill was a universal boom. In the conditions that were to follow everybody foresaw a chance to get rich quick. To quote one writer, "a period of wild speculation ensued. Those who owned farms bought others, and those who owned none went into debt and purchased them." Old towns be- gan to swell and to advertise lots for sale at in- flated prices, and new towns began to spring up on paper. This craze soon got its setback, but it lasted long enough to ruin many a plunger and In be followed by a wake of hardship and dis-
State Control and How It Worked .- The writer who has searched most fully into the de- tails of this subject ( Logan Esarey ) makes some interesting statements as to the workings of the State's great enterprise. \ "Board of Internal Improvements," the members of which, sepa- ratel. were put in charge of the various works to be placed under contract, met in Indianapolis,
March 7, 1836, and, says Mr. Esarey, "the scram- ble for the lion's share of the money began as soon as the first meeting was called to order. Each commissioner seemed to be interested alone in getting his work completed as soon as pos- sible." Then came jealousy and chicanery after the contracts were let, between the sections to be benefited. Some of the works did not pro- gress as rapidly as others, and none of them fast enough to suit the citizen who was eager for re- turns. Labor was scarce, and the contractors were pitted against each other, one trying to lure away another's workmen. Some of the improve- ments that were not definitely settled on by the law still remained unsettled. When the State borrowed money, it is stated, it made no provi- sion for interest, as, according to the "System orators," the tolls were to take care of all that, so when interest fell due it was paid out of bor- rowed money instead of taxes, as the people had been assured there would be no increase in tax- ation.
One corollary is that interest on $10,000,000 at six per cent. amounts up appallingly. More- over the $10,000,000 were only part of the sum to be borrowed, according to the original esti- mates of total cost, and in 1838 another estimate by the head engineer ran the sum up to $23,- 000,000.
The Collapse .- By the end of 1837 there was plenty of reason for grumbling and distrust, and the administration at that time was whistling optimistically to keep up its courage, but by an- other year even the governor ( Wallace), who had been elected because of his advocacy of the internal improvement movement, began to ex- press misgivings. The Legislatures tinkered in a helpless way with the situation, making experi- mental changes here and there. Then in 1839 came the collapse and all work was stopped after an expenditure of vast sums, for much of which there was never the least return, to the State, while contractors were bankrupted and thou- sands of laborers thrown out of employment without pay for work they had done. The fin- ished work to show for the millions of dollars expended were a part of the Whitewater canal in operation ; an indefinite amount of work on the Wabash and Erie (the funds for this canal being also derived from the sales of government lands that had been granted for it ) : about twenty-
CENTENNIAL HISTORY AND HANDBOOK OF INDIANA
105
eight miles of the Madison railroad and a neg- ligible amount of turnpike improvement-the to- tal of the completed work, according to Dillon, being two hundred eighty-one miles and the cost for same $8,164,528.21. The returns from the twenty-eight miles of railroad, the partially fin- ished Whitewater canal and the Wabash and Erie barely took care of the upkeep, and all the State got for the $1,820,026 it had put into the Central and crosscut canals was a few miles of completed ditch between Indianapolis and Broad Ripple
far to find the fundamental reasons for this mon- umental fiasco, the legislative warrant for which was characterized as pre-eminently a "people's measure." In the first place the sagacity of the orator-fed people in judging the probabilities of a colossal piece of business that called for busi- ness insight of a high order, was practically nil, as the sequel amply proved. The proposition that the commerce of a thinly populated back- woods State could safely float a twenty-million- dollar enterprise was hardly one to commend
Belle Fountain & Ind. Depot.
Cincinnati, Lawrenceburg & Ind Depot.
情感,山真
in
Lafayette Depot.
Madison & Ind. Depot .
First Railroad Depots in Indianapolis. 1854.
that for a while was utilized for floating cord- wood down to the capital and eventually went into the hands of the Indianapolis Water Com- pany. The Madison railroad and the White- water canal were taken over and completed by private companies. The Wabash was retained for several years, and finally became the State's sal- vation, it being transferred, in 1846, to her cred- itors in liquidation of the disastrous debt that had brought the commonwealth almost to the point of repudiation.
The Elements in the Case .- Accepting the study of this movement made by the authority previously mentioned, one does not have to seek
itself to a shrewd business man. The orators who rode on the rising tide of public sentiment made a business of hypnotizing the masses, and the masses moved by a sort of mob psychology in the direction of their desires.
Again when it came to the actual test of per- forming the business it was the old governmental evil of purely perfunctory administration made worse by innumerable temptations to graft. Millions of dollars at hand with more to easily follow as the demand arose was fatal to all those ideas of economy that the business man weighs when he realizes that the business must make good or he pay the penalty. The public work be-
CENTENNIAL HISTORY AND HANDBOOK OF INDIANA
came a great feeding-erib. and as none of the "higher-ups" had anything at stake the job- hunter, if he had any influence, was apt to fare well. We hear of surveying parties that seemed to be, largely, hunting and fishing parties, and of the "Eating Brigade" which, for services largely unrendered, received annually about $54,000. Besides resident engineers there was an engineer-in-chief for canals and another one for railroads, and so on. The broad-gauge ideas of the men who had nothing financially to lose is illustrated by the work done on the Madison railroad. For this the best was none too good ; the latest improved T rail was imported from England at $80 per ton, and the twenty-eight and a fraction miles were built at a cost of $1,624,- 603, or $58,000 per mile. When a private com- pany finished it later the style of construction was fitted to the probable returns, and the cost was something less than $11,000 per mile.
Nor was this all nor the worst feature of the sorry business. Still drawing upon the above- cited study as authority, the finances of the enter- prise, though in the hands of reputable men, were worse than poorly managed. The State government paid little attention to the financial board : the business was attended to in a careless, slovenly way, and reflection is cast upon the hon- esty of the administration. Transactions. were had with irresponsible "wildcat" institutions by which the State lost outright many thousands of dollars, while it is intimated that those who ma- nipulated the funds came out of it with nests well lined. Of one of them it is said that "he received $103,880 from these people on whom the State lost several millions."
The Panic and Script Issues; "Red Dog" and "Blue Pup."-One factor in the general distress that followed the internal improvement boom was a financial panic that swept the coun-
try in the latter thirties. The enormous running expenses had to be met, but it became impossible to secure the expected loans from the sales of bonds. Contractors could not be paid, and this of course involved the thousands of laborers and the people at large. As an escape from this dilemma the Legislature in January of 1840 au- thorized an issue of State scrip to the amount of $1,200,000 (Esarey. Other writers say $1,500,000). This served the purpose for a while, then depreciated to half its value and even less. It was printed on red paper, and the sense of derisive humor that has always distinguished the Hoosier fastened upon it the name of "Red Dog." This was carried farther when private companies that took over certain of the public works were also authorized to issue scrip to help out their undertakings, and this scrip from be- ing mostly printed on blue paper, became known as "Blue Pup" (W. H. Smith). Elbert Jay Ben- ton, in his "Wabash Trade Route" (p. 60), says "Blue Pup" was a sort of shinplaster currency based on "Blue Dog," and that both these and "White Dog" were land scrips secured by the lands of the Wabash and Erie canal. All the scrip suffered depreciation, but eventually the State's "Red Dog" arose again to par, plus ac- crued interest. During the days of its discredit its greatest value was for the payment of State taxes, and speculators made a business of buying it up cheaply in some sections where it was most plentiful and selling it in other parts still below par, to taxpayers (Smith). The inference is that the State accepted it at face value .*
* For excellent original studies from documentary sources of this subject see "The Wabash Trade Route in the Development of the Old Northwest," by Elbert J. Benton, in the Johns Hop- kins University studies, and "Internal Improvements in Early Indiana," by Logan Esarey, vol. v, No. 2, of Ind. Hist. Soc. publications. The latter in a somewhat modified form reappears in Esarey's History of Indiana. W. H. Smith's History of In- diana also devotes a chapter to this theme.
CHAPTER XI
OTHER DEVELOPMENTS PRIOR TO 1840
Expansion of Territory .- Various treaties with the Indians between 1830 and 1840 added to the area for settlement upward of 3,000,000 acres, exclusive of the final cession of the "Mi- ami reserve" (now partly comprising Grant, Howard and Tipton counties), which was pur- chased in 1840. The erection of twenty-two new counties brought the total number up to eighty- seven, and this meant a multiplication of towns, a growing urban population, and a corresponding development of activities.
Business Expansion .- During this period we find capital, for the first time, virtually, seek- ing investment in business enterprises. That the State bank had considerable to do with this is evidenced by the fact that after its establishment there were numerous incorporations of various kinds, the list including railroad, turnpike, bridge, steam mill and insurance companies. The busi- ness expansion generally is best shown by the Federal census of 1840, according to which the total capital invested in the manufactures of the State at that time amounted to $4,132,040. This does not include eleven commercial houses in foreign trade; twenty-six commission houses, with a total investment of $1,207,400; 1,801 re- tail stores, with a capital of $5,664,687 ; a pelt and fur trade amounting to $220,883 ; the news- papers with their allied printing, representing $58,505, and other industries not classed as man- ufactures. As measured by the capital repre- sented, the saw, grist and oil mills, scattered over the State, led with a total investment of $2,077,- 018. Next in importance came the tanneries and leather industries with $647,176. The meat- packing establishments of fifteen counties, with Jefferson leading, represented $582,165. Next came the distilleries and breweries, 323 of the former and 20 of the latter, with $292,316. The production of bricks and lime, lumber, cotton and . wool manufactures, and the making of wagons and machinery had by 1840 assumed con- siderable importance, New Albany leading in the last-named industry. and Indianapolis in wagons. The making of furniture in forty-eight counties involved an investment of $91,022; that of hats
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